NATURE OF POLICE PENSION FUND A. If you retired under the alternative formula, you will receive a 3% increase to your pension on January 1 following your first full year of retirement or age 55, whichever is later. All benefit claims should be made to the Claims Division. Members who join after January 1, 2011, are considered Tier 2. You can send us an email. She is also associate director of the Government Finance Research Center at UIC’s College of Urban Planning and Public Affairs. When you choose direct deposit, your first payment is mailed to your home. Your new pension amount will be the total amount before reemployment, plus the amount earned during your reemployment. Increasing the assumption will decrease unfunded liabilities, while reducing the assumption increases unfunded liabilities. If you reenter state service within three years after the date you retired, you may qualify to have your new retirement benefit computed as though you never retired. After you again retire from state employment, you must reapply for a pension. Unfunded liabilities for all public safety funds totaled $11 billion as of fiscal year 2017, and between 2012 and 2017 the median increase in unfunded liabilities from year-to-year was nearly $400 million, My work has focused on municipalities’ annual pension payments and a state law meant to enforce those payments, one of the largest public safety funds, the Joliet Police Pension Fund, had an investment loss of 0.6% in 2015 and a positive return of 12.9% in 2017, The Anderson Economic Group released a report on its study of consolidation for the Illinois Public Pension Fund Association in 2018, the Teachers’ Retirement System lowered its investment rate assumption the state’s required pension contribution for one year increased by hundreds of millions of dollars, As of 2017, the funds were only 55% funded. State law requires municipalities’ contributions to be sufficient so that each public safety fund is 90% funded by 2040 (meaning 90% of the liabilities are matched with assets). According to the Task Force, one of the benefits of consolidation is that it would, “Enhance uniformity in setting investment and other actuarial assumptions.” The report is thin on details about this aspect of consolidation, and it’s important to learn more about it to understand how municipalities will be impacted in both the short-term and long-term. Gov. Consolidating scores of local firefighter and police pension funds could save Illinois taxpayers between $820 million and $2.5 billion in the next five years, according to a report published Thursday by a state task force that’s been studying the issue since January. Failure to advise SERS of an address change may result in a delayed payment. guide to your retirement plan. Your benefits are based on the laws in effect on your last day of employment. Suburban and Downstate . Changing the investment rate assumption has an immediate and direct impact on unfunded liabilities. Monday-Friday around 3 p.m. Up-to-the-minute info on what's happening in Chicago business right now. The financial implications of changing the investment rate assumption are not detailed in the Task Force report. Mayor Lori Lightfoot still is looking to the state for additional relief as the city faces escalating pension payments, but it’s unclear what form – if any – that may take. Future increases of 3% of your current pension will also be made each January 1 thereafter. Legislation based on the recommendations has yet to be introduced, but once it is, more details should emerge that will allow for more in-depth evaluation. Consolidating assets has implications for actuarial assumptions, and assumptions play a vital role in determining a pension fund’s finances and municipalities’ annual payments. Emanuel, Durkin discuss. The Illinois legislature adopted a different set of pension vesting requirements for CTPF members who join on or after January 1, 2011. Direct Deposit (Electronic Funds Transfer). Click here to get the full experience on your screen. Cooper's Hawk comes to the city. However, consolidation should not be thought of as something that will resolve the challenge of unfunded pension liabilities or municipalities’ increasing pension contributions. All future payments will be deposited into your bank account on the 19th of each month. My big takeaway is the report itself is too thin on details to say for certain whether the recommendations are good or bad ideas, or what impact they’ll have at the local level in the short-term. In the end, the Task Force believes the savings will outweigh the costs. On Oct. 10, 2019, the Illinois Pension Consolidation Feasibility Task Force released its report to Gov. Monday-Friday at 7 a.m. A roundup of the day's important business news. Trying to assess whether the enforcement law is working is difficult because the 600+ public safety funds operate separately, and no central authority monitors the pension payments. Right now each of the 600+ public safety funds have their own investment rate assumption, and the assumption rates vary from around 5% up to 8%. Police Pension Funds . The savings, according to the report, “could save taxpayers in excess of $160 million on an annual basis.” While any increase in assets will help, the upfront costs of consolidation could be more than additional investment returns in the short-term. “The fact that there are 649 downstate and suburban pension police and fire funds cries out for reform. Decades of underperformance, high administrative expense and duplication demand change. While consolidating the assets is believed to generate savings, increasing the Tier-2 benefit would add costs. Moreno, Wesley’s Shoe Corral Celebrates 50 Years in Business, Lightfoot Celebrates Biden-Harris Victory, End of ‘National Nightmare’. My work has focused on municipalities’ annual pension payments and a state law meant to enforce those payments. J.B. Pritzker. We also invited the Pritzker administration to send someone supportive of consolidation. Funding public-employee pension systems is perhaps the most vexing emergency facing Illinois taxpayers. And only 30% of the plans have assets of more than $100 million. Sign up for our morning newsletter to get all of our stories delivered to your mailbox each weekday. Complete and return this form with your application for benefits. (312) 649-5200, COVID pushes higher ed and health care sectors to innovate and improve, Beyond Meat's wild ride goes beyond McPlant, Sponsored Content: Illinois Can Fix its Cannabis Dispensary Licensing Process with a Second Lottery. Pooling the assets would allow for reduced fees, more investment opportunities and higher returns. Citadel Securities sues to block rival from using leaked algorithm, Marex Spectron buys another Chicago broker in U.S. Under current rules, municipalities can use one of three different actuaries to determine the payment: 1) one hired by the Illinois Department of Insurance, 2) one hired by the municipality, or 3) one hired by the pension fund. This is a rather simple way to estimate the impact of consolidation, and it does not take into account a variety of factors. Information to assist you in understanding your police pension and benefits. The status quo is both unacceptable and unsustainable,” said William Brodsky, co-chair of the Pension Feasibility Task Force and former chairman of the Chicago Board Options Exchange. The Task Force was charged with studying the possibility of consolidating some of Illinois’ hundreds of public pension funds and providing recommendations to the governor. Monday, Wednesday and Friday at 5:30 a.m. Or tell us on our Facebook page or on Twitter, @CrainsChicago. A permanent mailing address is maintained for each annuitant of SERS. If you have not received your payment after 14 business days, call SERS. The savings estimate assumes the increased investment returns generate a 1-to-1 reduction in municipalities’ required pension payments. Chicago’s police and fire funds would not be part of the consolidation (according to the report, Chicago and Cook County’s nine pension plans’ assets “make up 19% of Illinois’ total pension assets,” an indication that they don’t need to merge in order to capture higher investment opportunities). Importantly, transition costs are immediate expenses, while savings occur over the long term. Amanda Kass is a doctoral candidate in Urban Planning and Policy at the University of Illinois at Chicago. Future increases are not limited by the 75% maximum. If you elect to rollover all or part of your widow/survivor refund, or alternative retirement formula refund, you will receive a 1099-R form by January 31 of the following year from the Comptroller’s office which will reflect the amount rolled over. “The single most impactful step that the State can take to address the underfunding of downstate and suburban police and fire pension funds is to consolidate the plans’ investment assets,” the report reads. Illinois' COVID count just took to a big leap. Last, whether the recommendations ultimately saves municipalities and taxpayers money will vary on a case-by-case basis, and depends on a variety of factors, including the investment rate assumption, discussed below. Will the city's arts and culture nonprofits survive? Thursday. The FOP is upset that the consolidated police pension fund would be governed by a board “where only 50 percent of the trustees are law enforcement officers. The group estimates that asset consolidation would generate an additional $820 million to $2.5 billion in investment returns over the next five years. When you apply for a SERS benefit, you will receive a Depository Agreement form along with an explanation of this program. 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If you return to state employment on a non-permanent or permanent basis after retirement, you should notify the SERS Claims Division immediately. Smaller funds have the least investment discretion and have to have a more conservative investment strategy, and these restrictions can translate into lower investment returns. Make sure these numbers are correct when filing a claim. The Chicago Tribune highlighted that the biggest driver behind increases in Chicago’s unfunded pension liabilities in recent years has been actuarial assumption changes. “This step is immediately actionable and beneficial to the health of the plans, retirees, and taxpayers.”. Pritzker’s habit of pouring his personal wealth into legislative campaigns keeps him popular with Democrats who may be otherwise be reticent to go along with such a change, and Republicans are apt to be on board as well (former Senate GOP Leader Christine Radogno is another co-chair, and on Thursday publicly encouraged her former colleagues to buy in). Future annuity payments are mailed on the 19th of each month, unless the 19th is on a weekend or holiday, when they are mailed on the last working day before the 19th.