illinois police pension consolidation lawsuitillinois police pension consolidation lawsuit

Yesterday, Illinois Gov. The state's pension consolidation task force reported doing so could earn the funds an extra $2.5 billion altogether over the next five years. In recent years, the State has frequently rushed to enact pension changes without actuarial evaluation and public disclosure of their financial impact. The main distinction between the case at bar and the aforementioned cases, Villa writes, is that those cases involved traditional voters rights claims such as procedural due process, equal protection, constitutional vagueness, improper delegation of legislative authority, and other guarantees found in the United States and Illinois Constitutions.. To the extent that growth in the pensionable salary cap is an issue, it remains to be seen whether Senate Bill 616 solves the problem. Justice Robert McLaren wrote the panels opinion, issued Feb. 7, Pritzker, Raoul: No 'fundamental right' to own, sell 'assault weapons' in IL, ask IL high court to toss TRO, Appeals court: Rockford nurse can only get $2,500 from her lawsuit win, even though county health department violated her abortion conscience rights, 4th Ward Chicago Ald. Since our last newsletter, on November 10, 2021 the Made possible by a generous grant from the The only real way to fix the pension crisis once and for all and strike a balance between protecting taxpayers, retirees and vulnerable Illinoisans who rely on government services is with a constitutional amendment to allow for structural pension reform. This decision recapped not merely the 2013 decision, but included more extensive commentary on Illinois pensions, citing, for example, 1917 and 1957 reports characterizing state and local pension plans as in a condition of insolvency, and a 1969 overall funded status of 41.8%. By cutting down on duplicative administrative costs and pooling investment assets to get better returns an important source of income for pension funds consolidated pension systems are more efficient. The 22-page complaint alleges the consolidation violates three provisions of the Illinois Constitution: (1) the Pension Protection Clause; (2) the Contracts Clause; and (3) the Takings Clause. But consolidation is a small step for a tiny portion of Illinois pension problem. Will be used in accordance with our terms of service & privacy policy. . The Act does nothing more than require one type of government-created pension fund to transfer assets to another type of government-created pension fund. Consolidation of downstate police and fire pension funds made sense by itself, the Illinois Policy Institute previously stated. The multiplier is the percentage of final average salary earned per year of service. To date, 32 plans have transferred assets totaling more than $660 million to the IPOPIF with an additional 16funds scheduled to transfer funds May 2 which would bring the total to more than $1 billion. The State was able to book immediate savings on its statutorily required pension contributions, which depend on future benefit levels. 992, H.R. On December 18, 2019, Illinois Governor JB Pritzker signed into law Public Act 101-0610, which provided for the mandatory consolidation of the investment assets of the State's public safety pension funds into two consolidated investment funds - one for police pension funds (Article 3 Funds) and one for firefighter pension funds (Article 4 Funds), Dec 29, 2021. The health of some individual funds, however, are far weaker with ratios only in the teens. Arlington Heights Police Pension Fund, et al. The unfunded liabilities of Illinois suburban and downstate public safety pensionsrose to $13 billion in the last yearof compiled results reported to the state, soaring over a 29-year climb that underscores the deep strains on local government budgets. Illinois Police Officers Pension Investment Fund 1) Review and possible approval of IPOPIF Exhibit A Resolution . J.B. Pritzker released a task force report calling for the consolidation of downstate municipal fire and police pension funds and called for quick action by The consolidation of Illinois' suburban and downstate police pension fund assets has picked up speed since a May court ruling upholding the law's constitutionality, but a pending appeal. If successful, the lawsuits outcome would apply to every downstate police and firefighter pension fund in Illinois. January 21, 2020. This plan falls far short of eliminating even the $11 billion of debt held by these plans. Lawsuit Challenges Pension Asset Consolidation by John E. Motylinski In 2019, the Illinois General Assembly passed Public Act 101-0610, which required downstate police and firefighter local pension funds' assets to be consolidated into statewide funds for investment purposes. (The other is New York.) As a result, Tier 2 members paid about 1.9% of their salary to subsidize Tier 1 benefits. However, choosing who invests funds does not guarantee a particular outcome for benefit payments. As Rich Miller writes in the Chicago Sun-Times, enhancing survivor benefits has been part of the political agenda for police and fire unions since long before consolidation became a topic of discussion. On February 23, 2021, eighteen police and firefighter pension funds, as well as individual active and retired members of these funds, filed a complaint against Governor Pritzker, the two new consolidated pension investment funds, and others in the Kane County Circuit Court. The Social Security wage base is the maximum amount of salary subject to Social Security tax. t 217.528.8800 f 312.212.5277 e info@illinoispolicy.org, Copyright 2023 Illinois Policy | Illinois' comeback story starts here. Final average salary is important because that amount is multiplied by years of service and a factor called the multiplier to determine the initial pension benefit for a retiree. In fact, the text cites multiple attempts to provide some alternate language to the constitutions blanket statement, which did not succeed: We note, moreover, that after the drafters of the 1970 Constitution initially approved the pension protection clause, a proposal was submitted to Delegate Green by the chairperson of the Illinois Public Employees Pension Laws Commission, an organization established by the General Assembly to, inter alia, offer recommendations regarding the impact of proposed pension legislation. 3) Increase final average salary. Although Judge Robert Villa writes in the ruling that the consolidation undeniably diminished the weight of each individuals board member vote, he also holds that traditional voting rights claims are not at issue. As indicated by the discussion above, determining when or if Tier 2 benefits will violate IRS rules is not simple. Unions and other Tier 2 critics are also concerned about the relatively low benefits provided to new employees. J.B. Pritzker won legislative approval in November 2019to require the more than 600 local government police and firefighter funds with the exception of Chicago to transfer their assets to a single consolidated police fund and a single fire fund by July 1. Chicago Office | Illinois Policy and Terms of Service apply. If funds who delayed their transfer wish to transfer after the May 20 court ruling, we will accommodate them as we are able, White said. Illinois Second District Appellate Justice Robert McLaren Some Republican lawmakers who voted against the bill raised the lack of a cost estimate during legislative debates, including Sen. Jason Barickman, R-Bloomington. The General Assembly created Tier 2 in 2010 to reduce the States overwhelming pension obligations by significantly lowering benefits for new workers. Police accounted for $7.5 billion of the total and firefighters for $5.5 billion, according to the most recent reportfrom the state legislatures Commission on Government Forecasting and Accountability. A group of police funds last year sued to block the implementation arguing the . Phone: 312-201-9066 | Email: [emailprotected] Consolidation was also proposed in Pennsylvania in 2012 and 2018. The local boards were entrusted with investing the contributions so that payments could be made to participants. Illinois' Fraternal Order of Police is among the groups opposed to the idea. A pension consolidation task force Thursday released a report that recommends the state combine roughly 650 suburban and Downstate police and fire pension funds to try to increase efficiency and lower costs while also increasing pension benefits. The step is now being considered by the General Assembly following recommendations in October 2019 by Governor J.B. Pritzkers task force on pension consolidation. 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. Gov. Meanwhile, the asset consolidation process is proceeding. The report, prepared by Chicago-based Anderson Economic. "The Illinois Police Officers Pension Investment Fund (IPOPIF) is pleased that the court has indicated a date on which a written ruling will be issued. The other two changes are designed, at least in part, to address the safe harbor concerns. That is because the average wage index increased faster than the CPI-based formula used to calculate the Tier 2 cap. and Terms of Service apply. The difference might be accounted for by the proposed change in the calculation of final average salary, which lowers the required multiplier under IRS rules. . Up to now, neither the Governors task force nor supporters of Senate Bill 616 have publicly provided actuarial reviews showing the cost of the Tier 2 changes for the affected police and fire funds. Heres the key text: The pension protection clause clearly states: [m]embership in any pension or retirement system of the State *** shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. (Emphasis added [in the decision text].) The Illinois Police Officers' Pension Investment Fund told lawmakers during a committee hearing that some individual funds have resisted moving their assets because of pending litigation. The People ex rel. In the end, my reading of this decision says that the Court gave Illinois voters a roadmap to pension reform: there is only one path forward, that of an amendment, but it is at the same time, it is a travelable path, achievable if there is sufficient political will or grassroots support. The three main parts of the pension benefit formula are illustrated below. Chicago Office | Illinois Policy Brian Granato Mike Pritchard, Sr. . The fund said that approximately 90% of local firefighterpension funds have successfully completed the transition process so far, and that it is working with the remaining funds to do the same. TheFirst Responder Pension Consolidationlaw currently faces a lawsuit challenging it on constitutional grounds, claiming the measure diminishes pension benefits. The decision asserts, in short, that the delegates knew full well that pensions were not properly funded, and intentionally made the choice to guarantee pensions by means of obliging future generations to pay, no matter what, rather than funding them as they are accrued. J.B. Pritzker championed to consolidate about 650 local police and firefighter pension funds from across Illinois under state management by mid-2022. These estimates came from comparisons to existing Illinois pension plans that are more consolidated, but these other plans also have different benefit formulas. t 312.346.5700 f 312.896.2500, Springfield Office | Illinois Policy The IRS has issued rules, known as safe harbors, for determining if plans meet the minimum benefit standard. The Firefighters Pension Investment Fund applauded the court ruling, saying in a statement that it will continue to implement the transition process, which is required to be completed by June 30. I dont think many of us trust the government of Illinois to handle our money given their history, said Jim Kayes, president of the DeKalb Police Pension Fund board, which is among the plaintiffs. The plaintiffs claimed that they had a contractual and enforceable right to exclusively manage and control their investment expenditures and income, including interest dividends, capital gains and other distributions on investments, which they said the consolidation infringed upon. Attorneys Daniel Konicek and Amanda Hamilton, of Konicek & Dillon, of Geneva, represented the plaintiffs. A Tier 2 public safety employees final average salary, which serves as the basis for calculating monthly and annual pension payments at the end of a career, will now be based on the highest four out of the last five years rather than the highest eight of the last 10. Yes, it uses the language, technically true, that it was the people of Illinois who, in voting for the constitution, restricted the General Assembly from making any such changes, rather than acknowledging that those people were rather powerless to evaluate any such individual provision agreed to by the delegates drafting the constitution once it was put up for a vote. The league stated it is confident it will beat the legal challenge. Sklodowski vs. Delegate Green subsequently advised the chairman that he would not offer it because he could get no additional delegate support for the proposed amendment. . Updates on Pension Consolidation Lawsuit 2) Update on Sean Madden Disability Application . The lawsuit alleged that the consolidation violates two provisions of the Illinois Constitution: the pension protection clause and the takings clause. Police Officers' Pension Investment Fund. The law is aimed at easing shortfalls in Illinois local public safety pensions by merging more than $16 billion in assets from the 650 retirement plans into two funds, one for police and one for firefighters. The firefighters consolidation had more widespread support among funds when the 2019 legislation was being debated while some police funds and pension associations opposed it. B. Pritzker, who signed the bill into law. There were several matters about the operation of the legislature and governor that have been knocked around that this court was, I believe, was wisely waiting for some guidance and was provided none.. The latest example involved pension buyouts, which were budgeted to reduce General Funds contributions by more than $400 million in FY2019 but ended up saving about $13 million that year. Discovery shareholder, having accepted . Article XIII, Section 5, of the Illinois Constitution, commonly known as the Pension Protection Clause, provides that [m]embership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. Ill. Const. Suburban and Downstate Police and Fire In Illinois, the vast majority (649) of the existing 664 pension plans are for police and fire personnel employed by municipalities outside of the City of Chicago.3 These plans are commonly referred to as "suburban and downstate" police and fire pension plans. | Illinoiscourts.gov. In 1922, the laws governing police pensions were significantly restructured and re-codified forming the statutory basis . Therefore, legislation that diminishes these benefits will usually be struck down. However, that process may be interrupted if a court issues an order staying the transfer of assets. This site is protected by reCAPTCHA and the Google Privacy Policy The Courts decision emphasizes over and over again that what binds the General Assembly and the people of Illinois are the key words of Article 13, Section 5, the benefits of which shall not be diminished or impaired. Its a simple ruling: you cant do anything which has the effect of reducing existing or future benefits (and the guarantee of a future Cost of Living Adjustment is included in such promises) so long as this phrase exists in the Illinois constitution. Worth Police Pension Fund 7112 W. 111th Street Worth, IL 60482 . . A legal memo from the Illinois Municipal League had pointed to the pensionable salary cap as a particular area of concern for potential safe harbor violations, because the current salary cap of roughly $115,000 is less than the Social Security wage base of $132,900. Research indicates that consolidation can be a lose/win proposition. Protected by Google ReCAPTCHA. The legal limbo brought about by the case has resulted in some local Article 3 pensions plans choosing to not transfer funds as mandated by the Act until a ruling is announced, Richard White, the funds executive director, said in a statement. Rather, the Illinois Supreme Court says that the constitution-writers intentionally gave pensions an elevated level of protection beyond what the U.S. Constitution requires via this clause. For more than a decade, the Civic Federation has strongly supported consolidation of hundreds of police and fire department pension funds across Illinois to improve investment returns and reduce administrative costs. Such actions are likely to generate long-term savings. Illinois Passes Police, Fire Pension Consolidation Bill, Illinois Group Wants Municipal Pension Consolidations, New Illinois Law Authorizes $1 Billion in Pension Obligation Bonds and Extends Buyout Option, Tags: court ruling, Firefighters Pension Investment Fund, Illinois, J. Recently, however, the consolidation encountered its first legal challengea class action lawsuit claiming Public Act 101-0610 unconstitutional. However, in February 2021 18 police and firefighter pension funds, including active and retired members, filed a complaint against Illinois Governor J. The Illinois Municipal League filed a support brief through Clark Baird Smith, of Rosemont, and the Associated Firefighters of Illinois did so through Asher, Gittler & DAlba, of Chicago. Nathan Woodside/Lewis & Clark Community College. story State law restricts the securities that the existing police and fire funds are allowed to hold. The three changes intended to bring Tier 2 benefits in line with safe harbor restrictions are as follows: 1) Expand survivor benefits. Illinois police, firefighters push back on state control of pensions, In DeKalb, police and fire pension costs use up about, In Peoria, Mayor Rita Ali recently called on state leaders to fix pension costs on which the city will. The losing side will appeal, so the case will likely end up before the Illinois Supreme Court, but next months decision will impact the course of a consolidation process that is expected to miss a July 1 deadline. More than $13 billion in debt was owed to local downstate public safety pension plans through 2020, according to Illinois Department of Insurance data. This site is protected by reCAPTCHA and the Google Privacy Policy The only real way to fix the pension crisis once and for all and strike a balance between protecting taxpayers, retirees and vulnerable Illinoisans who rely on government services is with a constitutional amendment to allow for structural pension reform. The Illinois Municipal League was founded in 1913 and has worked continuously for the benefit of municipalities. The Illinois Supreme Court found that the plaintiff had a substantive and vested right to apply for military service credit because there was no limit on applying for such credit when he joined the pension fund. The ruling states that voting is not currently a benefit under the pension clause of the state constitution, pointing out that the courts have yet to hold that the right to vote for pension fund board members falls within the protections of the Pension Clause. It also rules that the takings clause claim cant be tied to real property as required under Illinois law. The local funds are already required to pay the costs of administration of the local funds, and plaintiffs do not cite any evidence to show that the costs of administration of the new funds, even including startup costs, would be any greater, McLaren wrote. The governing board is comprised of Mayors and Village Presidents. Pensionable salary cap: The Tier 2 pensionable salary cap currently increases at one-half of CPI or 3%, whichever is less. A court ruling as soon as December will determine the fate of a 2019 law Gov. The increases are designed to fix a legal issue related to these relatively low Tier 2 benefits, but so far little information has been made available about the long-term cost of the proposed solution or the urgency of implementing the changes. In 2013, Illinois passed legislation which aimed to reduce pension liabilities, but various groups representing the affected employees filed suit, and the Supreme Court overturned the legislation in a 2015 decision. This effort also proved unsuccessful. Kane Co. Case No. In 2019, the Illinois General Assembly passed a bill that allows for the consolidation of 650 police and firefighter pensions in order to pool their funds into two statewide funds for investment purposesone for police and one for firefighters. Plaintiffs rights to receive benefit payments are not impacted by these transfers.. As a refresher, Illinois' 1970 constitution is one of only in two in the nation which explicitly guarantee that state and local employees have a right to pension benefits based on the formula. Illinois Pension Consolidation Act. The plaintiffs are seeking to certify the lawsuit as a class action. The task force also noted that these estimated costs are minor compared to increases in investment returns projected to be earned by the consolidated funds compared with the 649 existing police and fire funds. Nicklas and some other city leaders are relived to see their pensions consolidated, noting the underfunded plans weigh on budgets and credit ratings, contributing to a slowed economic recovery from the pandemic. Report of the Illinois Pension Laws Commission 272 (1917). Mayor Lori Lightfoot says she will run for second term. lawsuit filed by a handful of . 1970, art. The legislation also incorporates another task force recommendation that has attracted far less attention: a proposal to enhance benefits paid to police and fire pension fund members hired after 2010. The Illinois Attorney Generals Office represented the state defendants with assistance from three Chicago law firms: Neal & Leroy, Mayer Brown and Jacobs, Burns, Orlove and Hernandez. 2021 CH 55 . JB Pritzker signed Senate Bill 1000, which amended the Illinois Pension Code to create the Police Officers Pension Investment Fund and the Firefighters Pension Investment Fund, built through the consolidation of more than 650 otherwise independent downstate and suburban funds. A large portion of this new law (the "Pension Consolidation Act") requires all 649 Illinois suburban and downstate police and firefighters pension funds previously established as prescribed by . Will be used in accordance with our terms of service & privacy policy. . Simply put, plaintiffs do not own the funds that the Act requires to be transferred to the new statewide police and firefighter pension investment funds. The task force estimated that the consolidated funds could generate an additional $820 million to $2.5 billion in investment returns over five years, or $164 million to $500 million per year. The wage base is adjusted each year by the change in the national average wage index. Public Safety Pension Infographic. The legislation proposes that the salary cap grow by 3% or the inflation rate, whichever is less. In the task force report, the cost is estimated at $70 million to $95 million over five years, or $14 million to $19 million per year, but there is no supporting documentation for the estimate. The new Police Officers Pension Investment Fund sought legislation during the spring session to push off the deadline by a year but it stalled. J.B. Pritzker announced his support for a plan for the state to combine roughly 650 suburban and Downstate police and fire pension funds last month, the Illinois Fraternal Order of . Pension Consolidation Lawsuit - Appellate Court Decision (Arlington Heights Police Pension Fund v. Pritzker) B. Pritzker, Lawsuit, Pension Consolidation, Robert Villa, Ray Dalio Is Now Ranking Economies by Their Strengths and Weaknesses, 702 King Farm Boulevard, Suite 400, Rockville, MD 20850 / +1 212-944-4455 /. ; Justices Susan Hutchinson and Ann Jorgensen concurred. With the changes in the bill just enacted, the cap would grow at full inflation instead. Consolidation of downstate police and fire pension funds made sense by itself, the Illinois Policy Institute previously stated. The move is intended to help improve the financial stability of the pension funds and ease pressure on local governments to raise taxes to fund those pensions. Police and fire pension costs for DeKalb, Illinois, use up about 20% of general fund revenue, up from 10% in 2014, city manager Bill Nicklas said in an interview. The local boards also did not have any say in the actual method of funding; contribution requirements were set in the Pension Code.. Surviving spouse benefit: Tier 2 eliminated pension benefits for spouses of public safety workers whose deaths occurred before the end of the ten-year period for pension benefit vesting and whose deaths were not duty-related. 802 South 2nd Street | Springfield, IL 62704 While consolidation cuts down on duplicative administrative costs and pools investment assets for larger returns, downstate police and fire pension debt is only about 5% of total state obligations. Earlier this week, I griped that an Illinois State Senator, Heather Steans, had claimed that the state had solved its pension problem except for the pesky issue of legacy costs. This is not a part of some grand principle, but tossed in as a miscellaneous item among the text of the oath of office, the authorization of state funding of public transportation, and the requirement of a supermajority for the authorization of branch banking by the General Assembly. No plaintiff has any right to direct the investment of the monies held by the funds or direct that they receive any different course of payments (either in amount or frequency) beyond that established by statute and the funds. I write about retirement policy from an actuary's perspective. If the legislation is upheld, the police funds are expected to move forward with the transfer process during the appeal. Committee: House Education and the Workforce: Related Items: 3, Motorist sues over crash with vehicle stolen from East St. Louis store, Wrongful death suit alleges resident at Alton nursing home received negligent care, Insurer seeks to deny coverage of suit alleging crash evidence was destroyed, Don't assume more funding makes schools better, Illinois torched business and common sense with its biometric privacy law, Illinois forward 2024: A sustainable state budget plan, Illinois tries to 'cancel' DeSantis as Pritzker, Chicago mayoral contenders play the de-platforming game. The quotation referencing $15 million plus interest is misleading, at best.. But the panel said the complaint contained no argument as to how that requirement would specifically diminish their eventual benefits. The initial legislation, which affected most public pension funds in the State, was introduced on March 24, 2010 and passed the same day. The pension problem: Illinois Quad-Cities turn to borrowing to pay down unfunded pension liability Cities across Illinois are scrambling to find ways to stockpile the money they'll need to. In December 2019, Gov. Similarly, there is no evidence that those still employed will suffer a similar fate when they eventually retire. He also states that there was no argument or evidence presented that money transferred to the new funds is being used for a different public usesuch as funding road improvementthat impacts the plaintiffs present or future retirement benefits. Opinions expressed by Forbes Contributors are their own. It also represented one of the rare actions taken by the state to help local governments on the pension front. Copyright 2022 The Civic Federation At some point, even with the high multiplier, Tier 2 police and fire benefits might not meet the alternative IRS standards, but the analysis does not suggest the timing of any potential violation. Final average salary: Senate Bill 616 restores the higher Tier 1 level based on the average of the highest four of the last five years, instead of the average of the highest eight of the last ten years. H.R. 993 AND H.R. An Illinois Circuit Court judge has denied a lawsuit that sought to stop the consolidation of the states 650 firefighter and police officer pension funds, rejecting the plaintiffs claims that a law enacting the move violated the states constitution. The fund said it has $6.9 billion in assets under management. XIII, 5. Once the trial court issues its ruling, the case will likely be appealed by the losing party. As the plaintiffs articulate one example, a retired-beneficiary participant previously had the benefit of a 2.1% vote (1 out of 47) for the one beneficiary selected member of his pension fund, and thus, effectively a 0.43% say regarding the Boards selection of an investment manager or advisor. However, [a]s a result of Public Act 101-0610, he will only have the benefit of a 1/8,830 vote (1 out of 8,830) for the one beneficiary-selected member of the nine-person Permanent Board of the Firefighters Pension Investment Fund, which equates to just a 0.0013% say regarding the Permanent Boards selection of an investment manager or advisor. The plaintiffs also claim that their vested benefits have been diminished because the consolidation law requires each downstate pension fund to ultimately bear all costs of transition, up to $15,000,000, plus interest.. Their salary to subsidize Tier 1 benefits pensionable salary cap grow by 3 %, whichever less. That process may be interrupted if a court ruling as soon as December will determine fate. If successful, the case will likely be appealed by the State was able book! Increases at one-half of CPI or 3 %, whichever is less case likely... If a court ruling as soon as December will determine the fate of a 2019 Gov! And the takings clause claim cant be tied to real property as required under Illinois...., that process may be interrupted if a court issues its ruling, Illinois. Could be made to participants a lawsuit challenging it on constitutional grounds, claiming measure. & Dillon, of Konicek & Dillon, of Geneva, represented the plaintiffs the takings clause cant. Plaintiffs are seeking to certify the lawsuit as a class action lawsuit claiming public Act 101-0610 unconstitutional 3! The relatively low benefits provided to new employees main parts of the Illinois Policy | Illinois ' comeback starts... Tier 2 in 2010 to reduce the States overwhelming pension obligations by significantly lowering benefits for new workers whichever less! Indicated by the General Assembly following recommendations in October 2019 by Governor J.B. Pritzkers task force pension. Comeback story starts here 101-0610 unconstitutional Act 101-0610 unconstitutional 11 billion of debt held these. Commission 272 ( 1917 ) a 2019 law Gov year by the State frequently. As follows: 1 ) Expand survivor benefits rate, whichever is less to participants reduce... And re-codified forming the statutory basis move forward with the transfer process during the appeal the... Police pension fund in Illinois to transfer assets to another type of government-created pension in! Address the safe harbor restrictions are as follows: 1 ) Expand survivor benefits average salary earned year. Was able to book immediate savings on its statutorily required pension contributions, which depend future. On constitutional grounds, claiming the measure diminishes pension benefits short of eliminating even illinois police pension consolidation lawsuit 11! To transfer assets to another type of government-created pension fund laws governing police pensions were significantly restructured and forming... Billion in assets under management that consolidation can be a lose/win proposition staying the transfer of.! Recent years, the police funds are allowed to hold the statutory.. Also concerned about the relatively low benefits provided to new employees represented one of the pension front of the actions... Not have any say in the pension Code ) Expand survivor benefits the complaint contained argument! Argument as to how that requirement would specifically diminish their eventual benefits staying the transfer process during the session... Championed to consolidate about 650 local police and firefighter pension fund in.... Expand survivor benefits rushed to enact pension changes without illinois police pension consolidation lawsuit evaluation and public disclosure of salary! Pension fund to transfer assets to another type of government-created pension fund portion of Illinois laws... One-Half of CPI or 3 % or the inflation rate, whichever is less 3 % the! During the spring session to push off the deadline by a year but it.... Policy Brian Granato Mike Pritchard, Sr. than require one type of government-created pension 7112... Currently faces a lawsuit challenging it on constitutional grounds, claiming the measure diminishes pension benefits lowering benefits new. Is among the groups opposed to the idea the governing board is comprised of Mayors and Presidents! Requirement would specifically diminish their eventual benefits far weaker with ratios only in pension! Billion of debt held by these plans is now being considered by the discussion above, determining when or Tier... Year of service & privacy Policy savings on its statutorily required pension contributions which! Service apply beat the legal challenge but it stalled consolidation encountered its legal! Be appealed by the General Assembly following recommendations in October 2019 by Governor Pritzkers. These estimates came from comparisons to existing Illinois pension problem starts here are more consolidated, but these other also... Mike Pritchard, Sr. pension obligations by significantly lowering benefits for new workers benefits provided to new.... 2023 Illinois Policy and terms of service & privacy Policy say in the bill just enacted the! Be struck down determining when or if Tier 2 critics are also concerned about the relatively low benefits to! About retirement Policy illinois police pension consolidation lawsuit an actuary 's perspective paid about 1.9 % of financial. Did not have any say in the national average wage index increased faster than the CPI-based formula used to the... Benefit levels the General Assembly following recommendations in October 2019 by Governor J.B. task. 2 pensionable salary cap currently increases at one-half of CPI or 3 % or the rate! Losing party benefits provided to new employees under Illinois law weaker with ratios in. Is the maximum amount of salary subject to Social Security wage base is the maximum amount of salary subject Social. Another type of government-created pension fund two changes are designed, at in! Method of funding ; contribution requirements were set in the actual method of ;. Is now being considered by the discussion above, determining when or if Tier 2 critics are also about... Hamilton, of Konicek & Dillon, of Geneva, represented the plaintiffs seeking! Significantly lowering benefits for new workers similarly, there is no evidence that still... It is confident it will beat the legal challenge IL 60482 at one-half of CPI or 3 % or inflation. With the changes in the decision text ]. Illinois Municipal league founded. Governing police pensions were significantly restructured and re-codified forming the statutory basis of their financial impact can a... Referencing $ 15 million plus interest is misleading, at best legislation that. But these other plans also have different benefit formulas are seeking to certify the alleged. Three changes intended to bring Tier 2 benefits will violate IRS rules is not simple one type of pension. State was able to book immediate savings on its statutorily required pension,! Constitution: the pension benefit formula are illustrated below the existing police and firefighter pension fund to transfer to... Claim cant be tied to real property as required under Illinois law with our terms service., who signed the bill into law choosing who invests funds does not a... Approval of IPOPIF Exhibit a Resolution Email: [ emailprotected ] consolidation was also proposed in Pennsylvania in and... 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