host posted on November 15, 2019 14:42
PBPA of Illinois Member Update:
The Illinois General Assembly passed Senate Bill 1300 during the recent veto session that consolidates downstate police pension investment funds. The Bill will head to the Governor to be signed into law. While the PBPA of Illinois has been a vocal opponent of consolidation every step of the way, we were able to negotiate some key changes to the initial legislative proposal.
Summary of SB 1300:
The bill gives active and retired municipal police officers a majority of the board that controls the consolidated investments. It creates an investment board of police officers and mayors appointed initially and within one year elected by active and retired officers – it would not be controlled by the state and its funds cannot be swept. Each city essentially has its own segregated account - like IMRF. Five board members will be elected by police officers and four members elected by the mayors. Local funds are kept in place to administer benefit determinations, pay benefits, and conduct disability proceedings.
The bill removes restrictions on pension investments to allow the pension fund to have money invested for higher rates of investment return and hopefully at a lower risk.
There are no changes in Tier 1 benefits. Conservation, University, Capitol and Commerce Commission Police, as well as arson investigators, are placed back into the alternative formula for Tier II. Additionally, it increases the total maximum salary for Tier II officers to match Social Security (currently $128,400), improves survivor benefits for Tier II officers who die before earning 10 years, and improves the final average salary calculations for Tier II officers.
The bill also removes the ability for municipalities to use bogus actuarial assumptions to underfund their pensions.
November 15, 2019