A budget. Recreational cannabis. Gambling expansion. The Illinois General Assembly passed a sweeping slate of bills in the final days of this year’s legislative session.
But one issue was left on the table: the consolidation of the state’s more than 650 public safety pension funds.
Illinois law requires municipalities with more than five thousand residents and their own fire or police departments to maintain and fund their own pension funds for those retirees.
Recently on WTVP's At Issue, Peoria Mayor Jim Ardis said a public pension liability of seven million dollars ten years ago has ballooned to 20 million this year. In the next ten to fifteen years, he says that is expected to double.
“It’s not sustainable. It’s not realistic to think that we can get there even if Illinois magically turned around and all the sudden started attracting new business into this state. You can’t get there from here. It’s an issue that it’s like that across the state, and it has to be addressed," he said.
The pension issue has been a noted source of frustration for local elected officials across the state for years.
A slate of bills backed by the Illinois Municipal League to consolidate downstate public safety pensions into the Illinois Municipal Retirement Fund in an effort to cut down on administrative costs stalled in committee this session.
Gov. J.B. Pritzker formed a task force to explore the issue earlier this year. The governor said last week in Chicago that consolidation seems to make financial sense.
“When you look at best practice, best practices, to have one pool of assets from which you’re investing collectively, you can get into much better investment vehicles, and do better," he said.
Illinois Municipal League Director Brad Cole says he hopes for action on the issue after the task force delivers its report.
“We see that there’s two different ways to save money through consolidation: one, eliminating the redundant and unnecessary administrative costs, and secondly, by generating additional investment return so it’ll go right back into the funds," said Cole.
But in February, the Illinois Public Pension Fund Association warned that liquidating the more than 600 public safety pension funds and consolidating would create a one-time cost of up to $155 million , which would trump the savings on administrative costs.
The task force’s report is expected later this summer.
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