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Police, firefighters may be next for pension changes
By Robert McCoppin | Daily Herald Staff
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Published: 5/15/2010 12:00 AM

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Police and firefighters may be next in line for changes in Illinois law that could limit their pensions, but in return are seeking power to demand payment from municipalities.

Pension recipients and lawmakers hotly debated the topic in St. Charles Friday at a forum of the Illinois Public Pension Funds Association, which represents police and fire pension funds.

Proposed legislation would raise the minimum retirement age from 50 to 55, but also would give police and firefighters the power to demand full payment due each year from local governments, or else intercept their property and state tax receipts.

It's the same power city and village workers already have through the Illinois Municipal Retirement Fund, which is therefore funded 100 percent, in contrast to some pension funds that have less than half of the assets needed to meet future obligations.

But leaders from the municipalities in the suburbs and elsewhere rejected such a "poison pill," moderator and WTTW-TV broadcaster Phil Ponce said.

Republican State Sens. Chris Lauzen of Aurora and John Millner of Carol Stream, a former police chief, both said they hear a lot of anger about public pensions from their residents, many of whom don't get any pension.

Lauzen cited the public response to the Daily Herald's recent series, "Pension Crisis."

"The public is upset," Millner said. "We have to educate the public."

Many in the public don't realize, fund managers said, that police and firefighters pay into their pensions, don't get Social Security, and get much lower payments than the top pensions publicized in the media. The average firefighter, for instance, retires at 54 and gets about $44,000 a year, said Pat Devaney, president of the Associated Firefighters of Illinois.

While Lauzen supports fully funding pensions, he said, having members pay about 10 percent in and getting 75 percent back are numbers that "don't work."

"We've got to promise less," he said, "but deliver what we promise."

Currently, municipalities pay about 20 percent of payroll into pensions, said Dan Nelson, of the Illinois Fraternal Order of Police. But negotiations called for cutting that in half to match the members' contribution at about 10 percent.

Earlier this spring, state lawmakers set new limits on pensions for teachers, state and university workers, judges and lawmakers, and raised the retirement age to 67, but cops and firefighters were left out in part to avoid having 67-year-olds in such active jobs.

Other proposed changes for police and firefighters would lower the maximum benefit to 72 percent of the final four years' average pay, rather than up to 80 percent of the final day's pay, while also lowering survivor benefits to 66.6 percent rather than up to 100 percent.

Local communities would get some relief by moving back their payment schedule.

Ralph Martire, executive director of the Center for Tax and Budget Accountability, said the public needs to better understand how their taxes pay for services they want.

Illinois ranks 46th in the nation in tax burden, and to help pay the pensions, Martire said, it could afford to raise the income tax to 5 percent from 3 percent, and add sales tax to services like hair cuts and lawn service.

For now, the proposals are stalled in Springfield, but those involved expect the topic to keep coming up.