Local Government

Illinois Municipal League Director makes pitch for pension system reforms

By Herald-Whig
Posted: May. 17, 2019 8:20 am

QUINCY -- Illinois Municipal League Executive Director Brad Cole is hoping that leaders in the Illinois General Assembly in Springfield will heed his words regarding the municipal police and fire pension programs and help uncuff cities like Quincy from what he describes as an unmanageable financial constraint.

"There are a lot of unfunded mandates that the Legislature passes every year," said Cole, who was in Quincy this week for a presentation to the City Council. "There are hundreds that are in place that over a period of time that municipalities have to comply with," Cole said. "Many of those mandates are regulatory, but many of them have a cost to the city. We talked about several mandates tonight, including the pension obligations, which is set by the state but the city has to foot the bill for."

Cole said either the state, a local pension board or a third-party actuary determines the following: benefit levels, investment strategies, employee contributions, pension board composition, a fund's investment authority, the pension ramp or amortization schedule, the hiring of investment managers and fund attorneys and sets the annual employer contribution requirements.

Meanwhile, Cole said taxpayers in Quincy and other Illinois municipalities are trying to pay for it all.

"The pension program is the No. 1 financial concern for a city like Quincy," Cole said. "The pension contributions go up every year, and that is not something that is under the control of the city council. The pension boards and the state are making a lot of decisions, and they just leave the bill for the taxpayers."

Alderman Mike Farha, R-4, equated the increasing pension contributions to a runaway train.

"You just can't ever get ahead of it," Farha said. "It is like a train that is going downhill. You can't stop it or slow it down. It is just out of control."

Cole said the Illinois Municipal League has proposed seven pieces of legislation aimed at addressing various parts of the pension program.

"The common denominator for all of those proposals is that they combine the pension funds for investment purposes," Cole said. "It doesn't change benefits. It doesn't change the local decisions. It just puts the dollars together so that they can earn more."

The Illinois Municipal League said the Illinois Public Safety Pension Funds have realized lower investment returns due to restrictions placed on smaller funds. If downstate public safety pension funds had been consolidated in 1998 with the Illinois Municipal Retirement Fund, public safety pensions would have seen an additional $1.7 billion in investment return, the group claims.

Quincy Mayor Kyle Moore is a member of the Illinois Municipal League and says said he is supportive of the proposals.

"The state has placed a huge burden on every municipality by requiring the cities have their pensions funded at 90% by 2041," Moore said. "It has become so burdensome that every year we have to question ourselves how we are going to make the minimum contributions because that is all we can afford to make. Every year we have to wonder how our pension obligation is going to affect the services we deliver to our residents."

Moore said he is concerned Quincy residents confronted with headlines about aldermen raising property taxes or creating new taxes to fund public safety pensions may divide the community.

"I think this issue is going to pit taxpayers against the very people who have sworn to protect them," Moore said.

Cole said he hoped that his presentation in Quincy would spark a surge in the public's interest in this matter and would cause civic leaders to speak out in favor of the association's proposals.

"A citizen of this community, or any community in Illinois, can -- and I hope they do -- say to their elected officials in Springfield, their state legislator, their state senator, to do something," Cole said. "A local citizen can tell their state officials that their local elected officials know best, and a local citizen can tell their state officials to answer the plea of their mayor and their aldermen and do what they are asking."