Warning Highland Park: Pension Contributions To Be Raised.
If you live in Highland Park, you’re in for an unpleasant surprise. During the last city council discussion, held August 3rd, your officials were told that they’ll need to levy $5.2 million for the city’s police and fire pension funds in December. The coffers, they were told, were in arrears by a full $74 million. This responsibility falls on those who call Highland Park their home.
It’s the same old problem that has been nagging Illinois for months: the pension problem that Preckwinkle has tried to deal with by hiking the sales tax and that politicians bounce back and forth with none squashing it. You had to contribute $4.5 million in the past to help police officers and firefighters blessedly retire. This year, it has been raised to $5.2 million – a 16 percent increase.
The state law requires that the police and fire pension funds be funded to a 90 percent level by 2040. According to Finance Director Julie Logan, the city is overreacting by urging 100 percent replenishment. Says she, “simply by funding according to the actuarial valuation, the city is ‘over-funding’ (relative) to statute.”
Officials seem to have miscalculated in other ways, too. The city valuation reports state that the funding ratio in the police fund has dropped from 50 percent to less than 47 percent. This means that the fund has less than half of the assets on hand needed to pay the benefits earned to date by retirees and current employees. The report also concluded that the firefighters’ pension fund decreased from 54 percent to less than 52 percent. But, according to actuary Timothy Sharpe, the arrears may be due to the city using new assumptions about life expectancy, retirement rates, disability rates and other variables based on a 2012 publication from the Illinois Department of Insurance.
The city also calculated assets and liabilities differently using the five-year average that was determined by Illinois’ five-year-old pension reform law. These changes caused the gap between assets and liabilities to swell from $33 million to nearly $40 million in the police fund, and from $29 million to $34 million in the fire fund.
To those who live in Highland Park, your pension contributions may not be raised after all.
Am I – or am I not – my fireman’s keeper? This will be determined in the coming year.
Article by Leah Zitter, dbfchicago.com Writer