Excerpts from Pekintimes.com:
Illinois lawmakers are once again revisiting a long-standing debate: the consolidation of the state’s 656 local downstate police and firefighter pension funds into one unified system. While the idea has been discussed for years, it’s gaining new momentum this year thanks to Democratic Governor JB Pritzker, who established a task force in February to examine the issue more closely.
Beyond the task force, the Illinois Municipal League and a group of communities in the northwest suburbs of Chicago have been pushing for reform. They’ve proposed up to seven different models they believe could reduce costs for taxpayers and strengthen the financial health of these retirement systems.
Currently, there is a single pension fund for non-uniformed municipal workers called the Illinois Municipal Retirement Fund (IMRF). However, communities outside of Chicago that operate full-time police and fire departments each maintain their own separate pension funds, with distinct boards and administrative teams.
IMRF is currently in better shape than other pension funds in Illinois, with a funding ratio of about 90%. This is largely due to state law, which requires local governments to make their annual contributions—even if that means increasing property taxes or cutting other public services.
Until recently, police and firefighter pension funds were often underfunded during tough economic times. Plus, officials say these funds face additional challenges because of restrictions on the types of investments they can make. As a result, these downstate public safety pensions are only about 55% funded on average.
Supporters argue that consolidating the funds could save local governments around $21 million annually in administrative costs, or roughly $1,000 per member. That money could be redirected back into the pension pool. A larger, consolidated fund like IMRF would also have more flexibility to diversify its investments, helping protect against economic downturns.
If the 69 public safety funds managed by the Northwest Municipal Conference had earned returns similar to those of IMRF between 2003 and 2015, their assets could have grown by an extra $978 million. That would have reduced their unfunded liability—estimated at $2 billion in 2016—by nearly half, bringing it down to just over $1 billion without raising taxes. The funding level would have increased from 61% to 80%.
The Northwest Municipal Conference and the Illinois Municipal League have put forward several consolidation options. These include merging all funds into IMRF and letting the IMRF board handle both investment and administrative tasks; creating a new statewide system specifically for downstate police and fire pensions; establishing a single fund but allowing local trustees to manage day-to-day operations; or setting up two separate statewide plans—one for police and one for firefighters.
Despite the potential benefits, many local pension fund officials and members remain skeptical. One major concern is the high cost of transitioning from 656 separate funds to a single system, estimated at up to $150 million. The president of the Illinois Public Pension Fund Association said this expense could take as long as 10 years to recover from.
For now, lawmakers seem unlikely to act until the governor’s task force releases its final report and recommendations later this year.
Small Cylinder Magnets,Small Bar Magnets,Neodymium Cylinder Magnets,Rare Earth Cylinder Magnets
Anfeng Industrial Co.,Ltd , https://www.afmagnets.com