Ken Sarni

Ken Sarni

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.

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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

 

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IPPFA President McNamee on Chicago Tonight Discussing Consolidation
Source: IPPFA & Chicago Tonight

James McNamee, president of the Illinois Public Pension Fund Association and a critic of pension consolidation, joins “Chicago Tonight.” We were unable to find a member of the task force available to join the show. We also invited the Pritzker administration to send someone supportive of consolidation. A spokesperson said they, too, were unable to find anyone.

Can Illinois Save $1M a Day by Consolidating Pension Funds? Governor Says Yes.

Consolidating scores of local firefighter and police pension funds could save Illinois taxpayers between $820 million and $2.5 billion in the next five years, according to a report published Thursday by a state task force that’s been studying the issue since January.

Report by the Illinois Pension Consolidation Feasibility Task Force- October 10, 2019: Full Report

The IPPFA supports implementation of enhanced investment authority and a reliable actuarial methodology. Both of these improvements promote fund stability and taxpayer savings.

Video – Chicago Tonight with President McNamee

IPPFA Consolidation of Pension Fund Investment Authority Fact Sheet

 

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Welcome Troy Fire Pension Fund to IPPFA
Source: IPPFA

Welcome Troy Fire Pension Fund to IPPFA.

 

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PTSD Training Event – Saving Blue Lives
Source: NIU and IPPFA

The Illinois Public Pension Fund Association (IPPFA) and Northern Illinois University (NIU) have teamed up to develop a program to assist law enforcement leaders and rank-and-file officers in expanding their knowledge of Post-Traumatic Stress Disorder, as it effects police officers. This program, “Saving Blue Lives through Training on PTSD, Suicide, Resilience and Peer Support,” is offered at no cost to those attending.

First responders are routinely exposed to critical incidents involving exposure to injury or death in others, as well as the risk of injury or death to themselves. Research shows, and those in the profession intuitively know, that individual incidents and accumulated exposure can adversely affect the mental and physical health of those involved.

The NIU – IPPFA seminar will include:

  • Learning the symptoms of PTSD
  • Conditions that often arise with PTSD, such as depression and substance abuse
  • Identifying ways to bolster resistance
  • Suicide and conditions such as PTSD
  • Methods for dealing with PTSD without the help of a mental health professional
  • Effective treatments with the help of a mental health professional

Seminar Dates:

October 9-10, 2019,
Naperville Police Department
1350 Aurora Ave., Naperville, IL

November 6-7, 2019
Illinois Fire Services Institute
11 Gerty Drive, Champaign, IL

Time: 8:00 am – 4:00 pm

Register Here

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Video: Retirement Prep 101
Source: Squared Away Blog

Half of the workers who have an employer retirement plan haven’t saved enough to ensure they can retire comfortably.

This 17-minute video might be just the ticket for them.

Kevin Bracker, a finance professor at Pittsburg State University in Kansas, presents a solid retirement strategy to workers with limited resources who need to get smart about saving and investing.

 

Full Article

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The Implications of Social Security’s ‘Missing Trust Fund
Source: Center for Retirement Research

The brief’s key findings are:

  • As policymakers consider restoring balance to Social Security, understanding the reason for the shortfall is important.
  • Specifically, the program’s “pay-as-you-go” approach, which dates back to the late 1930s, makes it expensive relative to a funded system.
  • Paying full benefits to Depression-era workers meant forgoing the opportunity to accumulate more revenue in the trust fund, along with the interest on that revenue.
  • To make up for the missing interest, costs are higher than in a funded system.
  • Going forward, if revenues are considered as an option for helping to address legacy costs, the income tax is a potential alternative to the payroll tax.

Full Article

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