State lawmakers are now formally considering legislation to pool the resources of nearly 650 local Illinois police and fire department pension funds.
The measure, an amendment to Senate Bill 616, lays out the proposed ground rules and procedures that would take place in order to combine all of those funds. The idea has been championed by Governor J.B. Pritzker and others as a way to generate more money for retirees and reduce the need for local property tax increases.
Earlier this month, a state task force that studied the issue recommended that move and other pension changes, like offering better benefits to recent hires.
Rep. David McSweeney (R, Barrington Hills) agrees with the idea, but says it’s too soon to tell where he and others in his caucus stand.
“I am in favor of consolidating the investment functions and administrative functions of the pensions, but I do not support a Tier 2 benefit increase as the commission recommended,” he said following last week’s veto session.
The consolidation measure would allow local Illinois police and fire departments – all except Chicago – to pool their investments together into two separate funds. Individual police and fire departments would have separate accounts within the larger statewide funds, and wouldn’t have to give up any of the investments they have now.
Rep. Mark Batinick (R, Plainfield) has been a chief negotiator on pension fixes.
“I’m hoping eventually we pound something out,” he said. “I think one of the biggest issues with this whole process is there’s a lot of disinformation and distrust that are really mucking up this process.”
The state’s pension consolidation task force reported doing so could earn the funds an extra $2.5 billion altogether over the next five years. That could be a boost for communities being squeezed by pension costs.
Illinois’ Fraternal Order of Police is among the groups opposed to the idea. It so far disagrees with how a statewide pension board would be set up if the funds were to consolidate.
Rep. Terri Bryant (R, Murphysboro) said she doesn’t want the needs of Chicago suburban emergency departments to overshadow those in her southern Illinois district.
“What might be good for them may not be good for us at all,” she explained. “I think between now and when we come back in November, hopefully we’ll be able to see some resolution to those issues.”