Consolidating assets has implications for actuarial assumptions, and assumptions play a vital role in determining a pension fund’s finances and municipalities’ annual payments. “The city of Chicago pension funds have experienced their own unique financial challenges in recent years that warrant specific considerations with respect to the future work of the Task Force,” the report reads. A 19th-century rowhouse gets a 21st-century revamp, Avli, a new Greek spot in River North: Our review. However, consolidation should not be thought of as something that will resolve the challenge of unfunded pension liabilities or municipalities’ increasing pension contributions. “We really believe that collectively we’ll be able to get this through,” said Pritzker, who noted pooling the assets would be a “momentous change.”. My work has focused on municipalities’ annual pension payments and a state law meant to enforce those payments. Will the city's arts and culture nonprofits survive? It is ultimately up to the municipality to choose which of the three numbers to pay. If your payment is mailed directly to your home, allow 14 business days for delivery. Please select at least one newsletter to subscribe. When you choose direct deposit, your first payment is mailed to your home. If a municipality fails to make that payment the pension board can request the Illinois Comptroller to intercept state-sharing revenue and redirect it from the municipality to the pension fund to make up for the shortfall. 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. (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. Taxation of Refund Associated with Retirement. Still, pensions are also thought of as sacred cows, and critics of the plan have been quick to question its feasibility on both a practical and political basis. Each year, the Comptroller’s office is required to send you a 1099-R form showing the total annuity amount you received during the past year, as well as any taxes withheld. 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You can send us an email. In determining the long-term finances of the pension systems, actuaries use an investment rate assumption. The report doesn’t explicitly address whether duties related to determining the required contributions and triggering the intercept would shift to the statewide bodies that would be formed under the Task Force’s recommendation. The main focus was Illinois’ public safety pension funds — there are over 600 individual funds for police officers and firefighters throughout the state. Complete and return this form with your application for benefits. By collecting data from the largest public pension systems in the state and centralizing it into our new Illinois Public Pensions Database, the Better Government Association aims to bring greater clarity to this important topic. Tuesday-Thursday. Future increases are not limited by the 80% maximum. 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. Boozy freeze pops coming from the local firm behind Fla-Vor-Ice, Industrial buildings near O'Hare fetch $74 million, Sterling Bay battles lender over Fulton Market hotel loan, Why that vaccine can’t come soon enough for retail landlords, Marshall Field V's Lake Forest estate for sale, Look inside a remarkably ornate Depression-era home in Glen Ellyn, There’s been a run on southern Wisconsin lake homes, Giant mansion in Burr Ridge sells at multimillion-dollar loss again, Awash in local governments, Illinois sinks under the weight of them all, ‘Cities have a lot of strengths right now', From the publisher: What's ahead for Year Two of Crain's Forum, Employees need to be their authentic selves, The Most Powerful Women In Chicago Business. Suburban and Downstate . Suburban and Downstate Firefighters Pension Funds . Decades of underperformance, high administrative expense and duplication demand change. “As such, the Task Force and the Governor’s Office will continue to work with the City of Chicago on this issue as part of the next phase of this work.”. These three actuaries can use different assumptions, leading to three different figures as to what the municipality needs to pay. Importantly though, achieving higher returns hinges on taking on more investment risk and volatility. According to the analysis, 24 of the pension funds have “only one active participant.” The smallest held assets of only $2,000. In addition to the financial impact of consolidation, it’s also important to understand how the Task Force’s recommendations will impact pension governance more broadly. Moving to a single investment rate assumption will mean some funds’ assumptions will be lowered, while others will be increased. Members who join after January 1, 2011, are considered Tier 2. Crain's Daily Gist podcast: Why Joe Mansueto is betting on Chicago’s hotel market, Crain's Daily Gist podcast: Homebuyers continue to head for the suburbs, Biden will need to get creative to save the economy, What COVID-hit businesses need from our leaders now, Biden mines Illinois for agency review teams. The Task Force has two main recommendations: The Task Force writes that consolidation is “the single most impactful step that the State can take to address the underfunding of downstate and suburban police and fire pension funds.” The rationale for consolidating the assets is that doing so would result in better investment returns, which would boost the overall finances of the pension funds. The normal processing time is approximately 8 weeks from the date you leave service. As part of my work for the Government Finance Research Center, I’ve been studying the public safety funds. Policemen’s Annuity and When a more detailed proposal is introduced, it will be important to have a thorough analysis of the estimated costs and savings, and their respective time horizons. You can securely view your monthly earnings statement through the SRS Member Services website. How is it? When you apply for a SERS benefit, you will receive a Depository Agreement form along with an explanation of this program. Making the change “avoids a potential and costly safe harbor violation” down the road, the report says. The public safety funds range significantly in size and financial condition, and each one currently operates independently with its own board of trustees. A permanent mailing address is maintained for each annuitant of SERS. SERS retirees receive a 3% increase in their pensions on January 1 following their first full year of retirement or age 60, whichever is later. Figuring out how switching to a uniform investment rate assumption will impact contributions should be carefully studied, and would need to be done for each fund as the impact depends on their individual investment rate assumptions. Increasing the assumption will decrease unfunded liabilities, while reducing the assumption increases unfunded liabilities. All future payments will be deposited into your bank account on the 19th of each month. This covered the Downstate Pension Fund (most suburbs) and Chicago Police and Fire Pension Funds. A policy change that boosts the finances of the pension funds—like consolidation—could reduce municipalities’ required contributions. The Comptroller’s office will mail the first annuity payment directly to your home. If you retired using the Rule of 85, you are eligible for your first increase on January 1 following your first full year of retirement, even if you are not age 60. Monday-Thursday. Annuitants can submit a change of address in writing to the SERS Springfield or Chicago offices. Chicago workers among most reluctant in the U.S. to return to the office, Illinois getting biggest initial shipment of new COVID drug, Crain's Daily Gist podcast: Why O’Hare’s massive debt complicates expansion project. “This committee thinks downstate police officers are the only public employees who are just not smart or sophisticated enough to manage their own money,” FOP Labor Council Executive Director Shawn Roselieb said in an emailed statement from the union.