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Municipal pension obligations hot legislative topic

Posted February 14, 2008 10:00 pm

Chris Wetterich

Mayor Tim Davlin says he's alarmed by three pension proposals filed in the Illinois General Assembly this year that he believes will create a bigger burden for the city to pay.

The interest groups behind the bills say not to worry.

On the other hand, there are three bills that could ease the firefighter pension burden for Springfield and other downstate cities, if approved.

Two pieces of legislation would improve pension benefits for firefighters - the kind of unfunded mandate Davlin cites for the city's $123 million in debt to its police and fire pension funds.

However, representatives of the Associated Fire Fighters of Illinois said Thursday they will not pursue passage of those bills.

A third proposal would allow municipal electrical workers to retire at age 50.

Davlin said he does not have a problem with either firefighter pension sweetener or the one allowing earlier retirement for electrical workers - with a big caveat.

"I am not opposed to the merits of these bills," Davlin wrote in an e-mail. "I am opposed to them passing the costs on to the taxpayers of the city of Springfield."

While the state sets pension benefits for downstate cops and firefighters, the city pays the governmental share of them.

The mayor may not have much to worry about, though.

"The AFFI has no position on the (firefighter pension sweeteners) and is not going to pursue this legislation," said Pat Devaney, legislative representative for the Associated Fire Fighters of Illinois.

Devaney said the AFFI is focused this session on passing legislation loosening investment restrictions on firefighter pension funds, which would allow them to reap bigger returns and help cities pay down the debt.

Supporters of the legislation affecting electrical workers say it would be funded entirely by a 3.5 percentage point increase in employee contributions to the Illinois Municipal Retirement Fund. Those employees would then contribute 8 percent of their salary.

"I understand his (Davlin's) concerns, and I agree with them completely," said Rick Shereda, a City Water, Light and Power electrician and member of the International Brotherhood of Electrical Workers Local 193. "The entire burden will be on the employees making the contributions."

Shereda, who is helping spearhead the pension change, said IBEW must still meet with cities and the IMRF to ensure the increased contribution completely covers the cost. If not, the formula could be tweaked so that it does.

IBEW wants the change because statistics show that once an electrical worker is past the age of 45, the likelihood he or she could be killed on the job increases substantially, Shereda said.

"There are many risks involved with the job, and it takes a toll on your body," he said. "It's no secret CWLP workers have a lot of worker's comp claims."

Two other bills, sponsored by Rep. David Leitch, R-Peoria, could reduce the amount cities have to kick in annually to pay fire pensions. One would move the date cities have to fully fund fire pensions to 2048, while the other would increase contributions from firefighter salaries to nearly 10 percent. Devaney said the AFFI has no position on those bills.

And Davlin is supporting a third bill that would require a fiscal-impact study for at least 25 of the downstate police and fire pension funds whenever legislation is introduced affecting them.

Leitch said increasing firefighter pension contributions will bring firefighter contributions in line with what police officers contribute. He introduced the bills at the city of Peoria's behest.

"Apparently a lot of cities have the same problems," Leitch said. "We passed some very generous benefits for the firefighters a few years ago. I think they were more expensive than a lot of the communities anticipated."

Chris Wetterich can be reached at (217) 788-1523.

House Bill 4627

Sponsor: Rep. David Leitch, R-Peoria

What it does: Firefighter contributions to local pension funds would go to 9.91 percent.

Status: House Personnel and Pensions Committee

House Bill 4652

Sponsor: Rep. David Leitch, R-Peoria

What it does: Extends the amortization schedule for cities to fund fire pension from 2033 to 2048.

Status: House Rules Committee

House Bill 4855

Sponsor: Rep. Skip Saviano, R-Elmwood Park

What it does: Allows firefighters with 30 years of service to retire at age 48 with a pension equal to 75 percent of their salary. Currently, firefighters cannot retire until age 50.

Status: House Rules Committee

House Bill 4897

Sponsor: Rep. Michael Smith, D-Canton

What it does: Illinois firefighters can currently retire at age 50 after 20 years of service and receive half of their monthly salary as a pension. They can get additional credit for up to 30 years of service. For each additional month worked over 20 years, their pension increases by 1/12th of 2.5 percent to a maximum pension of 75 percent of their monthly salary at retirement.

Smith's bill would allow pension credit for up to 32 years of service and change the maximum pension to 80 percent of final monthly salary.

Status: House Rules Committee

House Bill 4904

Sponsor: Rep. Mark Beaubien, R-Barrington Hills

What it does: Requires a fiscal-impact study for at least 25 of the downstate police and fire pension funds whenever legislation is introduced affecting them.

Status: House Rules Committee

Senate Bill 2003

Sponsor: Sen. Bill Haine, D-Alton

What it does: Allows all Illinois municipal electrical workers to retire at age 50 with 25 years of service based on this formula:

.03 X years of service X final salary / 12 = monthly annuity

Monthly annuities could not exceed 80 percent of a worker's final monthly salary. Workers would also have to contribute an additional 3.5 percent of their earnings.

Status: Senate Rules Committee

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