New Law Reduces Benefits for Future Police Officers, Firefighters

New members of local police and fire departments will have a as the result of a state law that took effect Jan. 1 to ease the burden of municipalities responsible for funding the programs. 

The new law was explained in detail to 30 local officials at a round table Friday hosted by state (D-Lake Forest), state (D-Highland Park) and state (D-Northbrook). 

May and Nekritz, who sit on the House Pension and Personnel Committee, started working on this legislation three years ago, when market conditions affected by the nation’s economic recession made it . 

“Unless there was relief in pension obligations, municipalities were going to have to start laying off public safety personnel,” said May, explaining the urgency of the measure.

The law increases the retirement age from 50 to 55, but still allows early retirement at 50 with an arithmetically prescribed reduction in benefits. The vesting was also increased to 10 years for all police and fire personnel. 

The maximum pension received for 30 years of service is 75 percent of the average best rate of pay for eight of the last 10 years of service. Adjustments were also made to cost of living increases and survivor benefits. 

“This is a win-win situation,” said Garrett. “The municipalities knew they needed to do something, and though some felt this didn’t go far enough, it was comprehensive.” 

This bill regulates the pensions of state employees as well as new police officers and fire fighters. Pensions are managed in five separate funds controlled by the legislature, including the Illinois General Assembly and the state universities. 

“This is the first time we have reduced benefits,” said May. “As pensions disappear in the private sector, municipalities tell us they can’t afford to make their contributions."

Belsky wants the state to go further. 

“The state should allow local governments to institute deferred compensation plans like 401k’s in the private sector,” he said. “We should be able to have new hires make larger contributions.” 

Belsky also wants to see a law protecting employees of municipalities with shaky finances by giving the state the ability to take over a pension fund that is not at least 50 percent funded. 

In addition to setting revised guidelines for new hires, the new law provides additional protection for the benefit recipients. 

“Because of losses in the marketplace they (the funds) were losing money in the pension funds and feeling pressure,” said May.

Existing fire fighters and police officers are not affected by the new legislation because a constitutional amendment would be required to change their pension.