Ken Sarni

Ken Sarni

A Meeting of the Illinois Firefighters’ Pension Investment Fund
Source: Associated Fire Fighters of Illinois – AFFI

NOTICE: A MEETING OF THE ILLINOIS FIREFIGHTERS’ PENSION INVESTMENT FUND

To Be Held on Wednesday February 12, 2020 1:00 P.M.

Agenda to be posted as soon as it is available.

Double Tree by Hilton Hotel
3003 Corporate West Drive
Lisle, IL 60532

Governor JB Pritzker named 18 members to two interim boards that will manage the new statewide investment funds.

Read more

The other financial storm threatening to capsize Illinois’ economy
Source: Crain’s Chicago Business

And no, it’s not underfunded pensions.

We’ll soon find out if Illinois lawmakers are serious about easing the state’s unsustainable property tax burden.

As you may know, Illinois has the second-highest property tax rate in the nation, trailing New Jersey by just five one-hundredths of a percentage point. The pain has become so acute for homeowners and landlords across Illinois that Gov. J.B. Pritzker appointed a task force this year to study the causes and recommend solutions. The task force report is due Dec. 31, setting up possible legislative action on the issue when state lawmakers reconvene next month.

Full Article

 

Read more

Public Act 101-0610 Short Summary: Consolidation of Fund’s Investment Assests
Source: Reimer & Dobrovolny PC

Public Act 101-0610 Short Summary: Consolidation of Fund’s Investment Assests

December 18, 2019: Signed by Governor Pritzker

January 1, 2020: Effective Date

Consolidates all Article 3 and 4 Pension Fund’s Investment Assets Only.

Full Article

 

Read more

Spillovers From State and Local Pensions to Social Security
Source: Center for Retirement Research

Federal law allows certain state and local government employees to be excluded from Social Security coverage if they are covered by an employer pension of sufficient generosity.  Public sector retirement systems have grown less generous in recent years, and a couple of plans could exhaust their assets in the next decade, putting benefits at risk.  If pension sponsors are inattentive to federal generosity requirements when cutting benefits, current and future initiatives to curb costs may conflict with their obligations to the U.S. Social Security Administration (SSA).  This project combines data from a variety of sources to assess whether state and local governments are currently satisfying the federal standards and whether the standards continue to provide benefits of equal generosity to Social Security.

The paper found that:

Full Article

 

Read more

Does Public Pension Board Composition Impact Returns?
Source: Center for Retirement Research

U.S. state and local pension funds manage over $4 trillion in retirement assets for 20 million active and retired plan members.1  Given the significance of these funds, proper oversight is vitally important to government officials, plan participants, and taxpayers alike.  The challenges to effective pension fund governance have been well documented, and significant research has demonstrated that the characteristics of pension boards matter.2  This brief summarizes public pension fund governance, discusses key aspects of public pension boards, and presents additional evidence that a well-designed board relates to better plan outcomes.

The brief proceeds as follows.  The first section provides background on the primary responsibilities and authority entrusted to public pension boards.  The second section discusses key factors that influence board effectiveness – structure, composition, size, and member tenure.  The third section builds a “Board Effectiveness Index” by scoring plans across these factors, and demonstrates a positive relationship between the Index and plan 10-year investment returns.  The final section concludes that public pension funds may be best served by taking a holistic view of the many aspects of a board that contribute to its effectiveness, rather than focusing on any single feature.

Full Article

 

Read more

Tax Break for Police and Fire Retiree Medical Insurance Payments
Source: IPPFA

Please be sure your retired members are aware that they may reduce their taxable earnings by up to $3,000 for medical insurance premiums paid during a calendar year. This is allowable under the Healthcare Enhancement for Local Public Safety Retirees Act, or the “HELPS” Retiree Act.

To qualify, the premium must be deducted from the retiree’s pension check and remitted directly to the healthcare provider or insurance company.

Note that the $3,000 reduction does not appear on the annual 1099R form that is sent out by the pension fund. The retiree must claim the reduction on his or her personal 1040 tax form on Line 4B.

Instructions on claiming the reduction are included in IRS Publication 575 (page 6), which is available by clicking on the link (IRS Publication 575 (Page 6), Information on HELPS Act) below. As this is not a simple matter, it is recommended that pensioners consult with their tax preparer to properly claim the reduction. If your pension benefits are administered by a pension administration company, you may obtain additional information by contacting that company.

Let’s do what we can to ensure that our retired members can take advantage of this tax break for retiree medical insurance.

IRS Publication 575 (Page 6), Information on HELPS Act

 

Read more

Gov. J.B. Pritzker rules out constitutional change to address Illinois’ $134 billion in unfunded pension liabilities
Source: The Center Square

Gov. J.B. Pritzker said Tuesday that a constitutional amendment voters will decide next year will help save the state’s finances. He also dismissed any proposal to reduce the state’s pension costs through a constitutional amendment to remove the state’s pension protection clause.

During a wide-ranging fireside chat at the Economic Club of Chicago Tuesday, Pritzker promoted his constitutional amendment for a progressive income tax. Voters next year will be asked the binding question that Pritzker ushered through the legislature. Pritzker also campaigned on the issue of changing the state’s existing flat income tax to a progressive system that has higher rates for higher earners.

Full Article

 

Read more

Rep. Chris Miller: Governor’s police and fire pension ‘reform’ not the solution Illinois needs
Source: Illinois Review

OAKLAND – A plan to consolidate 650 downstate pension funds passed the Illinois General Assembly during last week’s veto session, but that plan was met with skepticism from many Republicans that simply don’t trust Illinois Democrat fix-it schemes.

State Representative Chris Miller (R-Oakland) says he voted against the Governor’s scheme to consolidate the 650 downstate police and fire pension funds because giving the state control of local pension funds sounded more like a scam than a reform.

“I have heard from many of my local police and fire departments and the idea of turning the management of their pension funds to the state of Illinois is something they have zero interest in seeing happening,” Miller said. “It may be the greatest reform in the history of reforms, but there is no trust in the state to manage these funds. It is just like what President Reagan said, ‘the nine most terrifying words in the English language are I’m from the government and I’m here to help.’”

Full Article

 

Read more

Legislation Adopted – SB 1300
Source: IPPFA

Article 3 and Article 4 Pension Trustees and IPPFA Sponsors

SB 1300 providing for the consolidation of the Downstate and Suburban Police and Fire Pension assets into two Consolidated Funds has been passed by the General Assembly and is expected to be signed by the Governor.

The bill establishes a police investment fund and a fire investment fund to invest and manage the pension assets that we now manage at the local level. The boards of trustees will consist of five seats representing the active and retired members and four from the municipalities and fire districts. There will be a transition board and interim executive director, moving over to a permanent board and director at the end of a possible 30-month transition period.

The approval of this legislation was not the outcome we had hoped for. IPPFA was against the adoption of the bill, most particularly the mandatory nature of the consolidation. We have always felt that participation in any consolidation should be a voluntary, local decision.  We drafted and distributed a resolution to our local pension boards to assist them in requesting that senators and assembly members not rush this matter through the legislative process.  We appreciate the support of the member funds in this effort.

Note that the legislation does include important improvements for the Tier 2 membership.  The salary used for calculation of pensions will be based on the final four (4) years of earnings instead of the final eight (8) years and the cap on salary that can be included in the pension calculation was improved. Also, benefits for survivors of Tier 2 police and fire actives and retirees were increased, essentially to the Tier 1 level.  IPPFA will provide more detailed information on these improvements in the near future.

In addition to these changes, IPPFA was instrumental in assisting in the passage of SB 1670, another improvement on the Tier 2 structure. Under this improvement, when an officer is transferred from the Illinois Municipal Retirement Fund (IMRF) to an Article 3 police pension fund at the same municipality, the officer will have his or her tier for benefits (Tier 1 or Tier 2) determined based on when the officer entered first entered service as a police officer in that community.

Moving forward, it is the intention of IPPFA to fully support the local pension boards during the transition. The local boards continue to exist for tax collection, setting and paying benefits, contributions and record keeping, disability determination and participant service. We will work with the interim and permanent Consolidated Funds on matters of mutual interest, and promote the reduced but still very important missions of the local pension funds.

Once the Consolidated Fund boards are established, we will initiate a program of training on consolidation issues and provide ongoing information to you as we receive it. There will certainly be “bumps in the road” as many issues are addressed and resolved.  There are a lot of unknowns to come. But the local boards and IPPFA have always ably served the interests of our active and retired police officers and firefighters and will continue to do so.

Read more

2019 Biennial Report (2017 – 2018)
Source: Department of Insurance Public Pension Division

The Division is tasked with the compilation, maintenance, and reporting of the financial, statistical, and actuarial data of the public retirement systems and pension funds in the State of Illinois.

Full Article

 

Read more
Top