Mon May 12, 2014
Mayors, Unions Spar Over Pension Costs
Towns across Illinois are paying more and more money into their local pension funds for police and firefighters. But many are still seeing the financial health of those pensions worsen. Unions and municipalities fiercely disagree on what caused the crisis - and how state lawmakers should fix it.
A recent state study found the unfunded liability for downstate and suburban public safety pensions grew about eight-fold since the early 90s. This is the problem facing mayors like Gayle Smolinski, of suburban Roselle.
"That doesn’t make any sense. If we’re increasing the amount of money we’re putting in, why are our funding levels going down? And we’ve been able to track it back to what we call pension sweeteners," Smolinski said.
A coalition of nearly one-hundred towns and municipal groups wants the General Assembly to scale back those retirement benefits. They also want to raise the retirement age for public safety workers outside of Chicago - and have them pay more toward their own pensions.
Sean Smoot is with the Police Benevolent and Protective Association of Illinois. The group lobbies for police pensions in Springfield. Smoot says the choice these mayors present, cutting basic services or paying public safety pensions, is a false one.
"These pensions sweeteners that they like to point to. Those didn’t happen without their agreement. So for them to turn around and say, 'General Assembly, you put these unfunded mandates on us' - it’s just simply not true," Smoot said.
Art Tepfer has been a public pension actuary for Illinois police and fire funds for nearly three decades. He says skyrocketing pension costs were actually by design. In 1993, state lawmakers approved a pension funding plan that worked like an adjustable-rate mortgage - low payments at first, but rapidly rising payments in the future.
"Well, we’re in the future now. This is what’s happened. And that’s why we have a pension crisis. We saw it coming," Tepfer said.
Mayors, union reps and state lawmakers are working on a solution - but few think it’ll get done before the General Assembly adjourns for the summer.