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What Rhode Island can teach us about pension plunder
Source: Forward Kentucky

When you look at proposals and bills related to public pensions, there is one thing to keep in mind: we’re talking about an amazing amount of money. In just one fund, the Kentucky Retirement Systems fund, there are assets worth over $12 billion. ($12,250,960,799.44 to be specific.)

And just as Willie Sutton said he robbed banks because “that’s where the money is,” Wall Street firms love to help pension systems manage their money – because if you get the right deal on the right terms, there’s a lot of money to be made.

So, it pays to pay attention to what is happening with public pension systems – including changes to the boards. Shifting the balance of power on a pension board can make it easier for unscrupulous people to get their hands on all that money. And sometimes, they will make it look like they are actually trying to save the pensions. “What we’re doing is for your own good!” they will say, even as they pocket huge fees.

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Illinois lawmakers debate consolidating downstate pensions
Source: KPVI

SPRINGFIELD — For municipal officials, the idea of consolidating 650 downstate police and fire pensions into one will save money in the long run, provide better investment returns and provide more stability to weaker systems.

But representatives of the pension plans said consolidating them will cost money that could take up to 20 years to recover and that there are more pressing issues facing the systems, including Tier 2 benefits that are inadequate.

The goal of consolidating downstate police and fire pension funds has been on the radar of the Illinois Municipal League for several years. This year, it also got the attention of Gov. J.B. Pritzker who appointed a task force in February to look into the feasibility of consolidating local pensions “beginning with downstate police and fire funds.” The group is supposed to deliver recommendations by July 1.

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Video: Pensions on Main Street
Source: National Public Pension Coalition

By now, most people know that public pensions provide a secure and dignified retirement for America’s public employees. But did you know that they’re also powerful engines for local and state economies, as well as the national economy? We’ve created a new video to highlight the impact that pensions have on Main Streets across our country, including their indispensible value in recruiting and retaining qualified public safety officers

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Welcome Winnetka Fire Pension Fund to IPPFA
Source: IPPFA

Welcome Winnetka Fire Pension Fund to IPPFA.

 

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A “Pension Crisis” Mentality Won’t Help: Thinking Differently About Illinois’ Retirement Systems
Source: Government Finance Research Center

The near ubiquitous claim that Illinois is facing a “pension crisis” has rarely been challenged. The failure to examine this customary framing of the fiscal condition of Illinois’ five state pension systems limits how policymakers conceptualize their funding strategy. This white paper, jointly authored by researchers from the Project for Middle Class Renewal at the School of Labor and Employment Relations, the Government Finance Research Center and the Institute of Government and Public Affairs (all at the University of Illinois), argues that the “pension crisis” framework negatively influences discussions of policy options.

Our goal with this paper is to rethink the conversation about pensions and the state’s finances in several ways. First, we argue that the funded ratio and unfunded liabilities, conventional ways of assessing a pension system’s fiscal health, are inadequate metrics that reinforce short-term thinking. We argue that the focus should be on long-term trends and peer comparison. In addition, attention should be paid to identifying what the drivers are of negative trends and carefully assessing whether action is needed.

Second, we argue that a “pension crisis” is a situation in which the pension system is insolvent and unable to make benefit payments to current retirees. This is not the present scenario in Illinois. Nonetheless, we recognize that both the state and the pension systems face significant fiscal challenges. Third, rather than a singular problem, we contend that there are actually two, interrelated and in-conflict issues:

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Illinois pension crisis, time is not on our side
Source: Crain’s Chicago Business

Chicago’s largest employers are recommending the state pay off more than $130 billion in pension debt largely through a series of tax hikes. It’s not a perfect plan. But it gets one thing right: The crisis can’t wait.

It’s not every day that a group of corporate chieftains makes a forceful and concerted argument for a tax increase. And yet, Chicago’s largest employers, members of the Civic Committee of the Commercial Club of Chicago, did just that on Feb. 5, recommending to new Gov. J.B. Pritzker a plan to pay off more than $130 billion in state pension debt largely through a series of significant tax hikes.

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Welcome Wilmette Fire Pension Fund to IPPFA
Source: IPPFA

Welcome Wilmette Fire Pension Fund to IPPFA.

 

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Contact Legislators Today – Oppose All Consolidation Bills
Source: IPPFA

Your Calls, Emails, and Visits Make a Difference – ACT NOW and Oppose All Consolidation bills.

Please call Sen. Steven Landeck (217-782-0054), Rep. Ryan Spain (217-782-8108), and the Governor’s office (217-782-6830 or 217-782-6831) to let them know you are opposed to any and all consolidation for Downstate Police and Fire funds. We need the phones lighting up in the Statehouse!

SB 1106 (Landek)/HB 1566 (Spain): Consolidation into IMRF, with IMRF Formula for New Hires

Consolidates all downstate public safety pension funds into the Illinois Municipal Retirement Fund (IMRF) and requires the regular IMRF pension formula to apply to all newly hired public safety employees after a certain date. Local pension boards would be abolished following consolidation.

SB 1107 (Landek)/HB 1567 (Spain): Consolidation into IMRF, while Retaining Police and Firefighter Benefit Formulas

Consolidates all downstate public safety pension funds into IMRF. This proposal would allow the benefit formulas of these funds to remain the same, but the funds would be under the management and administration of IMRF. Local pension boards would be abolished following consolidation.

SB 1108 (Landek)/HB 1568 (Spain): Consolidation with IMRF, for Investment Funds Only

Consolidates the investments (only) of all local pension funds by the transfer of assets and investment authority into IMRF and maintains local pension boards for each fund to administer pension determinations.

SB 1109 (Landek)/HB 1569 (Spain): Consolidation Creating a Single Downstate Police Pension Fund

Consolidates all downstate police pension funds into a single downstate police pension fund. The fund would have one statewide board that would carry out all aspects of the fund’s management, thereby eliminating the local pension boards.

SB 1110 (Landek)/HB 1570 (Spain): Consolidation Creating a Single Downstate Firefighter Pension Fund

Consolidates all downstate firefighter pension funds into a single downstate firefighter pension fund. The fund would have one statewide board that would carry out all aspects of the fund’s management, thereby eliminating the local pension boards.

 SB 1111 (Landek)/HB 1571 (Spain): Consolidation with IMRF, for Investment Funds Only, By City Council Action, Maintaining Local Pension Boards

Allows municipal officials to direct the local pension fund board to transfer and consolidate its investment funds into a single statewide fund. Allows local pension boards to maintain all other authority, such as pension awards and disability determinations. Participating communities would see their property tax levies for pensions be exempted from the Property Tax Extension Limitation Law (PTELL).

SB 1112 (Landek)/HB 1572 (Spain): Extend the Amortization Period and Reduce the Funded Ratio Target

Maintains all characteristics of each local pension fund (i.e., no consolidation), extends the amortization period from 2040 to 2050 and reduces the required funding ratio target from 90% to 80%, and directs a comprehensive study be done to examine the costs and benefits of full consolidation.

 

Your efforts can make a difference. We need and deserve to continue the dialogue with elected representatives.

A few of the Senate bills have been assigned to committee, so it’s important to call now.

CALL TO ACTION

Please let the Sponsors of these bills, along with the Governor, know that you OPPOSE any and all consolidation of police and fire funds.

Call today!! ACT now and make your voice heard.

 

 

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IPPFA Regional Seminar – Jumer’s Hotel/Casino Rock Island – Registration Now Open
Source: IPPFA

Come join the IPPFA for a regional seminar being held at Jumer’s Hotel/Casino Rock Island, Illinois.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

Register NOW

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