The recent economic downturn has impacted our residents,
businesses and municipal revenues. An unparalleled decline
in pension fund reserves, loss of retirement fund values and
escalating costs have taken a toll on the funding of public
employee pensions. This funding comes from three sources –
employee contributions, employer contributions, and
investment returns. Since employee contributions are set
by the General Assembly, the fiscal burden falls upon the
Lake Forest contributions (local taxpayers) to keep these
funds financially viable. By law, Lake Forest is mandated
to fund the pension benefits of police, firefighters and
other municipal employees.
A comparison of pension
plans(28k
- 1 page) covering Lake Forest employees
illustrates the pension benefits offered by the plans as
well as their structure.
Public Pension Forum
On January 11, 2010 at Gorton Community Center, over 80 individuals attended
special panel discussion on public pensions. This forum
brought together representatives from the Illinois
Legislature, Lake Forest City Council, and police and
fire pension boards to discuss causes of the current
pension problems faced in Illinois. Discussion began
with an overview of the financial impact of pension
funding on The City of Lake Forest and a report on the
status of the public pension funds in Illinois. This was
followed by a presentation on the role of the police and
fire pension boards and the limitations they face. The
panel then engaged in a collaborative discussion of
current pension challenges as well as opportunities for
positive change.
LEGISLATIVE ACTION TAKEN TO DATE
Recognizing the financial impact on taxpayers, the
Illinois Municipal Retirement Fund (IMRF) board took steps
to mitigate its investment loss and offered options to
municipalities to cap their fund contribution for municipal
employees (except police and fire). However, a similar cap
on contributions to police and firefighter funds will
require legislative action by the Illinois General Assembly.
In 2009, the Northwest Municipal Conference
(NWMC) sought a legislative remedy. Working
with Senators Susan Garrett and Pam Althoff, NWMC succeeded
in getting Senate Bill 2011 approved by the Illinois Senate.
Opposition from the state police and firefighter unions
stalled Senate Bill 2011’s advancement in the Illinois
House.
On February 3, 2010, Representative Karen May (58th
District) introduced
HB 5297. This pension reform bill would amend the
Downstate Police and Downstate Firefighter Articles of the
Illinois Pension Code by modifying the way in which the
annual actuarial requirements of the pension funds would be
met. This bill is currently before the Personnel and
Pensions Committee for consideration.
Earlier this year, Senators Susan Garrett (29th
District), Pamela Althoff (32th District) and Dan Cronin
(21st District) also introduced similar legislation to the
Illinois Senate.
SB 2574 is currently before the Pensions and Investments
Committee for consideration.
Pension Fairness for Illinois Communities was established
in 2009 with the goal of bringing fairness to the public
safety pension system in order to relieve the burden of
escalating public safety pension costs on local taxpayers
and ensure sustainable retirement benefits for our public
safety employees. Information of this coalition of municipal
governments and businesses across the state can be found on the
coalition’s web
site.
To voice your opinion or learn more about this issue, please contact your State Senators and
Representatives:
State Senators
Susan Garrett (29th District)
129 Capitol Building, Springfield, IL 62706 217-782-3650
425 Sheridan Road, Highwood, IL 60040 847-433-2002
Terry Link (30th District)
122 Capitol Building, Springfield, IL 62706 217-782-0902
906 Muir Avenue, Lake Bluff, IL 60044 847-735-8181
State Representatives
Karen May (58th District)
255-S Stratton Office Building, Springfield, IL 62706 217-782-0902
427 Sheridan Road, Highwood, IL 60040 847-433-9100
Carol A. Sente (59th District)
240-W Stratton Office Building, Springfield, IL 62706 217-782-0499
50 Lakeview Parkway, Suite 114, Vernon Hills, IL 60061 847-680-5909
RESOURCES FOR ADDITIONAL INFORMATION
Answers to Common Questions
Additional information on public pension funds can be
viewed or downloaded here:
Illinois Municipal League
Information can also be obtained from the
Illinois Municipal League (IML).
Founded in 1914, the IML provides a formal voice for
Illinois municipalities in matters involving common
interests, particularly legislative issues, and promotes
competence and integrity in administration of municipal
government.
A historical summary of
public safety pension changes since 1993 can be viewed
in the IML website, as well as other police and fire pension-related data.
(Please note that the term "Downstate" in the summary of
pension changes refers to all Illinois municipalities except
the City of Chicago.)
During this same time period, two changes were made to the IMRF pension plan for
non-public safety employees. These changes have little
impact on Lake Forest's financial obligations and are as
follows:
1997--employees who had
military service prior to joining IMRF were allowed to buy
up to two years of IMRF time; and
2004--pensions costs
were withheld from contributions to the employees' Retiree
Health Savings Plan.
Illinois Government Finance Officers Association (IGFOA)
Excerpts from the IGFOA Public Pensions Newsletter
(182k - 8 pages)
from
Spring 2006 provides a comparison of public pensions in
Illinois.
(Note: The comparison was prepared by Chris Staron as a
Graduate Intern with IGFOA when working on his Masters
in Public Administration at Northern Illinois
University.)
Northwest Municipal Conference (NWMC) Working with 47 municipalities and one township in the
north and northwest suburbs of Chicago, the NWMC is one of
the premier regional councils of government. The Conference
has prepared a report on
public safety pension increases for 2009
(22k - 2 pages)
based on actuarially required calculations.
(28k
- 1 page) covering Lake Forest employees
illustrates the pension benefits offered by the plans as
well as their structure.