The Facts on Public Safety Pensions
The current pension payout structure is financially unsustainable for taxpayers
- After contributing approximately $300,000 over 30-year career, a public safety employee beginning their career today and/or their spouse can feasibly draw almost $7.5 million over a 30-year retirement. Taxpayers simply cannot afford this, especially at a time when many are dealing with unemployment and investment losses, and aren’t guaranteed any retirement benefits themselves.
The current public safety pension funding system is inefficient and lacks critical oversight
- There are 636 total police and firefighter pension funds across the state each managed by its own employee controlled board controlling more than $8.2 billion in total assets. It is irresponsible to hand over unlimited amounts of taxpayer money to retirement funds managed by employees. Under these circumstances, the fox is clearly guarding the hen house.
Although taxpayers are shelling out more to pay for public safety employees’ retirements, funding levels continue to drop
- Between 1997 and 2008, taxpayers increased their contributions to police and fire pensions by more than 150% – but funding levels continued to decline due to pension sweeteners and the economic downturn. In just two years (2008-2010), the total combined unfunded liability between the police and firefighter pension funds grew by $985 million.
Public safety pension reform will achieve significant savings for taxpayers
- With sensible legislative changes to the benefit levels offered to employees hired on or after January 1, 2011, taxpayers would be saved at least 50% of the future normal cost of pensions. Examples of such changes include raising the retirement age for future public safety employees, consolidating pension funds into one cost-effective system, and asking current employees to contribute more towards their retirement.
*Data provided by the Illinois Municipal League. The full IML report can be found here (PDF).