Pension Crisis | Pension Fairness for Illinois Communities
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Pension Crisis

Pension Crisis
Taxpayers Bear the Largest Burden
How Public Safety Pensions Are Determined

Pension Crisis:

Most communities across Illinois have more than doubled their public safety pension contributions over the past decade. But during that same time, pension costs skyrocketed because state legislators passed a series of public safety pension benefit increases and higher than average salary increases resulting from state determined arbitration process. Combined with declining investment returns on pension fund assets due to the prolonged economic downturn many Towns are now facing financial ruin as years of unchecked growth in pension contributions rapidly overtake municipal budgets. As a result, TAXPAYERS ARE IRONICALLY PAYING MORE IN EVER INCREASING POLICE AND FIRE PENSION COSTS AT THE EXPENSE OF ACTUAL PUBLIC SAFETY.

The General Assembly set the precedent earlier this year in passing initial pension reform for state employees. The Pension Fairness for Illinois Coalition is calling on state legislators to finish the job this veto session and approve meaningful pension reforms for public safety employees.

Taxpayers Bear the Largest Burden

Taxpayers have unfairly been left to carry the burden of public safety pensions, at a time when many have been laid off or suffered salary cuts and don’t even have money to put into their own retirement funds.

We value our public safety employees and the valuable service they perform, but taxpayers shouldn’t have to pay for people may who retire as early as age 50 with a pension of up to 75% of what they last earned—no matter what, especially in this economic climate when guaranteed benefits of any kind are virtually unheard of.

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 (PDF) 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.