About

Across Illinois, soaring public safety pension costs are at a crisis level and threatening the future of our communities. Pension Fairness for Illinois Communities is a coalition aimed at bringing fairness to the public safety pension system in order to relieve the burden of escalating public safety pension costs on local taxpayers and ensure sustainable retirement benefits for our public safety employees.

News

November 16, 2010
Illinois Mayors, Business Leaders travel to Springfield to demand immediate legislative relief from escalating public safety pension costs. View the full press release (PDF).

November 9, 2010
Police, fire pensions need legislative 911: The Chicago Sun-Times published an editorial calling on the General Assembly to enact meaningful public safety pension reform during veto session this month following last week's referendum results. Visit our Referendum Tracker to see the outcome of the referenda in all 44 Illinois communities - on average 83% of voters said YES to public safety pension reform.

How Public Safety Pension Benefits are Determined
A Breakdown of Public Safety Retirement Benefits
An Example of how Generous Pension Benefits Work

Information About Public Safety Pensions

Police and firefighters perform a valuable service – keeping our communities safe. Their efforts are greatly appreciated. For their service, we recognize that our communities have an obligation to help provide for their retirements.

However, public safety pension benefits should not be overly generous to the point that it places an unfair burden on local taxpayers. A fair solution is urgently needed that protects local taxpayers and secures sustainable retirement benefits for our public safety employees for years to come.

How Public Safety Pension Benefits are Determined

Police and firefighter pension benefits and generous enhancements are determined by the General Assembly, not by local governments. A group of large downstate and suburban municipalities, for instance, saw their public safety pension costs increase by as much as $5 million between 2004 and 2008 as a result of pension sweeteners passed by the General Assembly, according to a recent report by the Commission on Government Forecasting and Accountability.

While the Illinois state legislature controls public safety pension benefits and lavish retirement sweeteners, the state is not obligated to contribute any funding for such enhancements. The burden falls on local taxpayers.

A Breakdown of Public Safety Retirement Benefits

Police and firefighters pension benefits plans are very similar:

Both can retire at age 50 and begin receiving benefits
Benefits accrue at 2.5% of final pay for each year of service credit earned
The maximum benefit is 75% of final pay after 30 years of service
A 50% of final pay benefit begins after 20 years of service
Upon retirement, the pension benefits increases by 3% (compounded) each year beginning at age 55
Police and firefighters contribute 9.91% and 9.455% of their pay respectively toward their pensions

Such generous pension benefits are unheard of anywhere in the private sector.

An Example of how Generous Pension Benefits Work

A firefighter earning $65,000 who began his career at age 22 decides to retire at age 52. With 30 years of service credit, he is eligible for a maximum pension benefit of 75% of his final pay ($48,750 per year). At age 52, he still can begin another career and work the 10 year minimum to qualify for social security benefits, all while collecting full pension benefits from his former firefighter position.

Thanks to the compounding of the annual 3% increases (which begin at age 55), at age 65 his pension benefit equals his final pay. In 15 more years, the retiree is receiving a pension that is more than 150% of his final pay (over $100,000 per year). Plus he is also likely collecting social security on top of any other retirement savings or benefits he may have accumulated.

Remember, the retired firefighter in this example contributed less than 9.5% of his pay toward his pension during his career. Taxpayers are responsible for funding the difference.