Today is September 16, 2014
  

Historical Public Safety Pension Enactments

1993 DOWNSTATE FIREFIGHTER BENEFIT INCREASES (P.A. 87-1265)
Total cost of new benefits was 1.535% of payroll. Re-amortization reduced cost in initial years following benefit increase.

  • Increased the minimum retirement pension payable to a firefighter with 20 or more years of service and the minimum surviving spouse’s pension from $400 to $475 per month. Estimated cost was .135% or payroll or $295,000 annually.

  • Increased the surviving spouse pension from 40% to 54% of the deceased firefighter’s monthly salary and to allow a surviving spouse pension to continue notwithstanding remarriage. Estimated cost was 1.4% of payroll or approximately $3.03 million annually.

  • Re-amortized unfunded accrued liabilities of fire pension funds as a level percentage of payroll over 40 years beginning in 1993.


1993 DOWNSTATE POLICE BENEFIT INCREASE (P.A. 87-1265)
Total cost of new benefits was 1.65% of payroll. Re-amortization reduced cost in initial years following benefit increase.

  • Granted 3% compounded cost-of-living adjustments for police officer retirement benefits.

  • Re-amortized unfunded accrued liabilities of police pension funds as a level percentage of payroll over 40 years beginning in 1993.

1997 FIREFIGHTER PENSION INCREASE (P.A. 90-0032)
Total cost of new benefit was .002% of payroll.

  • Increased benefit for dependent children of firefighters receiving duty or occupational disability benefits.

  • Preserved the benefit for a firefighter’s child who is adopted after the death of the firefighter. Estimated cost was .002% of payroll.

1999 DOWNSTATE FIREFIGHTER BENEFIT INCREASES (P.A. 91-0466)
Total cost of new benefits was 1.51% of payroll (1.306% employer share) for an annual cost of $5.3 million.

  • Expanded the definition of creditable service to include up to 3 years a firefighter is on disability leave. The firefighter is allowed to make employee contributions to the fund while on disability or after returning from disability (with interest from the date of the disability to the date of payment). Final language provides that in order for a firefighter to purchase creditable service he must work the equivalent time as the creditable service purchased, i.e., if eligible for 3 years but work only 20 months after returning from disability, only 20 months can be purchased, not the full 3 years. No cost estimate could be determined at the time.

  • Increased the pension formula from 2% to 2.5% of salary for the 21st through the 30th year of service. The increase in annual cost was estimated to be $3.8 million or 1.09% of payroll or $3.8 million annually.

  • Based the initial automatic annual increase on months (rather than years) that have elapsed since the annuity began. The purpose is to allow a firefighter to begin receiving compounded increases immediately as opposed to having to wait one full year. Estimated cost was 0.11% of payroll or $381,000 annually.

  • Incrementally increased the minimum retirement disability and surviving spouse annuities to $600 in 1999, $800 in 2000 and $1,000 in 2001. The increase in annual cost is estimated to be 0.25% of payroll or $882,000 annually.

  • Provided a duty or occupational disease disability annuity equal to the greater of 65% of salary or the retirement pension the firefighter would be eligible to receive if they retired (excluding automatic annual increases). No cost estimate but probably very insignificant.

  • Added stroke to a list of diseases that qualify a firefighter for an occupational disease disability annuity. The draft also provides that cancer claims are refutable. No cost estimate available.

  • Provided for an annuity of 100% of salary to the surviving spouses of firefighters who die in the line of duty. Estimated cost was 0.06% of payroll or $200,000 annually. If 10% of the deaths of downstate firefighters occur in the line of duty, the increase of accrued liability is estimated to be $2.0 million, with a resulting increase in total annual cost of 0.13% of payroll or $400,000 annually.

  • Employee contribution of .204%.


2000 DOWNSTATE POLICE BENEFIT INCREASES (P.A. 91-0939)
Total cost of new benefits was 1.51% of payroll (1.306% employer share) for an annual cost of $5.3 million.

  • Expanded the definition of creditable service to include up to 3 years a police officer is on disability leave. The police officer is allowed to make employee contributions to the fund while on disability or after returning from disability (with interest from the date of the disability to the date of payment). Final language provides that in order for a police officer to purchase creditable service he must work the equivalent time as the creditable service purchased, i.e., if eligible for 3 years but work only 20 months after returning from disability, only 20 months can be purchased, not the full 3 years. No cost estimate could be determined at the time.

  • Increased the pension formula from 2% to 2.5% of salary for the 21st through the 30th year of service. The increase in annual cost was estimated to be $3.8 million or 1.09% of payroll or $3.8 million annually.

  • Based the initial automatic annual increase on months (rather than years) that have elapsed since the annuity began. The purpose is to allow a police officer to begin receiving compounded increases immediately as opposed to having to wait one full year. Estimated cost was 0.11% of payroll or $381,000 annually.

  • Incrementally increased the minimum retirement disability and surviving spouse annuities to $600 in 1999, $800 in 2000 and $1,000 in 2001. The increase in annual cost is estimated to be 0.25% of payroll or $882,000 annually.

  • Provided a duty or occupational disease disability annuity equal to the greater of 65% of salary or the retirement pension the police officer would be eligible to receive if they retired (excluding automatic annual increases). No cost estimate but probably very insignificant.

  • Added stroke to a list of diseases that qualify a police officer for an occupational disease disability annuity. The draft also provides that cancer claims are refutable. No cost estimate available.

  • Provided for an annuity of 100% of salary to the surviving spouses of police officer who die in the line of duty. Estimated cost was 0.06% of payroll or $200,000 annually. If 10% of the deaths of downstate police officer occur in the line of duty, the increase of accrued liability is estimated to be $2.0 million, with a resulting increase in total annual cost of 0.13% of payroll or $400,000 annually.

  • Employee contribution of .204%.


2004 DOWNSTATE FIREFIGHTER BENEFIT INCREASES (P.A. 93-0689)
Total cost of new benefits was 5.63% of payroll (4.63% employer share)

  • Surviving spouse annuity of 100% of pension earned by decedent, retroactive to January 1, 2004.

  • Increased minimum pension for survivors from $1,030 in 2004 to $1,159.27 by 2008.

  • Retroactively and prospectively increased children’s annuity by 3% annually through 2008.

  • Reciprocity between downstate fire funds and the ability to transfer IMRF service to a downstate fire fund.


2005 DOWNSTATE FIREFIGHTERS AWARDED CONTROL OF PENSION BOARDS (P.A. 94-0317)

  • The law reconstituted the fire fighter pension boards (Article 4) to give local fire unions a 3-2 controlling share of the vote.


2007 ELIMINATION OF REQUIREMENT THAT FIREFIGHTER PENSION BOARDS MUST RELY ON ASSESSMENT OF INDEPENDENT PHYSICIAN WHEN DETERMINING DISABILITY (P.A. 95-0681)

  • The law amended the downstate (non-Chicago) fire pension statute to eliminate the need for a fire pension board to rely upon an objective medical opinion prior to determining that a firefighter is disabled. Despite the opinion of a competent physician that a firefighter is not disabled, a union-controlled fire pension board would be allowed to award a duty disability benefit.

2008 PUBLIC SAFETY PENSION ETHICS, DISCLOSURE, AND REPORTING REFORMS (P.A. 95-950)

The law contains the following provisions:

  • vendor conflict-of-interest protections;
  • vendor contract disclosure requirements;
  • pension board gift ban;
  • more frequent state audits of pension funds;
  • state pension services fund anti-sweep provision;
  • anti-fraud disability language;
  • public disclosure of local pension fund fiscal health;
  • municipal verification of benefit calculations for police funds;
  • more accurate cost impact estimates for future pension legislation; and
  • regular studies on the fiscal conditions and unfunded liability factors of the downstate and suburban police and fire pension funds by the independent Commission on Governmental Forecasting and Accountability.

2009 FIREFIGHTER RETIREE BENEFIT INCREASE (P.A. 96-0775)
  • The law provides 3% cost-of-living adjustments to firefighters that retired prior to July 1, 1977.

2010 CHICAGO AND DOWNSTATE MUNICIPAL PUBLIC SAFETY PENSION BENEFIT REFORMS (P.A. 96-1495)

The law affects both the Chicago and downstate police and firefighter pension funds. A complete index of the bill can be viewed here for ease of navigation through the legislation. The bill contains the following provisions:

Benefits (New hires beginning January 1, 2011)
  • normal retirement age of 55 (currently age 50);
  • early retirement at age 50 with a 6% reduction for each year prior to age 55;
  • pensionable salary cap of $106,800 indexed to 1/2 % of the CPI-U;
  • final average salary calculated using the last 8 of 10 years (currently final day's salary);
  • survivor benefit of 66 2/3% of pension earned at date of death (currently 100% of pension); and
  • cost-of-living adjustments beginning the year after a retiree or survivor turns age 60 with annual increases equaling the lesser of 3% simple or 1/2 of CPI-U (currently 3% compounded each year after pension becomes payable).

Funding Changes

  • 30-year closed amortization period with a funding target of 90% by the end of 2040 (currently expires in 2033 with a funding target of 100%)
  • state-shared revenue diversions to pension funds beginning in 2016 equaling the difference between the employer contribution and the required actuarial contribution. Municipalities can use their own actuary to determine the required contribution. Three year phase-in with up to 1/3 of state-shared revenue diverted in 2016, up to 2/3 in 2017, and up to the full contribution difference beginning in 2018 (click here to learn more about the mandatory funding mechanism);
  • changed amortization methodology for the City of Chicago police and firefighter pension funds;
  • expanded investment authority including corporate bonds for all funds and greater equity investments for funds with assets of at least $10 million; and
  • 5-year smoothing of actuarial gains and losses.

COGFA Studies

  • COGFA study on each pension fund for release in 2013;
  • COGFA study on investment pooling; and
  • COGFA study on a 50/50 employer and employee split of the normal cost.


2013 SURVIVING CHILD BENEFIT INCREASE (P.A. 98-0391)

  • This legislation increases the benefit from 12% to 20% of the firefighter's monthly salary for eligible dependent children of a firefighter who dies without leaving an eligible surviving spouse. This Act provides an equivalent benefit for eligible surviving dependents regardless of the firefighter's marital status.