After lobbying for pension reform in Springfield last year, Evanston City Manager Wally Bobkiewicz and Mayor Elizabeth Tisdahl had something extra to celebrate on New Year’s Day: a new law signed by Gov. Pat Quinn giving cities throughout the state more time to address billions upon billions of dollars of pension debt.
The new law, which took effect Sunday, eases pressure on Evanston to shrink its unfunded liability, the $174 million it owes to retired officers and firefighters. Evanston must now match 90 percent of pension debts by 2040 instead of 100 percent by 2033. The law also raises the retirement age of police and firefighters to 55, places limits on the salary police officers and firefighters can earn and still receive pensions, and reduces pension benefits for police and fire employees hired after Jan. 1.
The growing gap in pension funding has affected decisions on taxes and spending since Evanston’s police and fire pension deficit was discovered in 2007.
“Mayor Tisdahl and I were in Springfield at the end of November to lobby on behalf of some sort of reform, and we’re happy the legislature felt it was an important issue to take action on,” Bobkiewicz said.
However, Bobkiewicz said he had hoped the law would do more to provide “immediate relief” for the city’s debt. The law does not change the pension benefits for employees hired before the law was enacted and punishes municipalities that do not improve on their unfunded liabilities after five years.
Police and fire unions embraced the law for holding municipalities accountable for their pension debts and preserving the benefits of retirees hired before the New Year.
“We’re elated that we were able to accomplish some of these things,” said Police Pension Board President Timothy Schoolmaster, a Northwestern alumnus who has worked more than 30 years in law enforcement.
The law creates two levels in police and fire pension funds with a group of officers and firefighters who were hired before the enactment of the legislation and another tier of employees hired after Jan. 1 who will have to work longer careers and will receive fewer benefits. Schoolmaster said new police and fire recruits will have to be more mindful of saving money for retirement now that government benefits have been reduced.
“Most people don’t think about that until they’re 40 or 50 years old,” he said. “All I wanted to do when I started was to go out and drive a new car.”
Critics of the pension law include Chicago’s Mayor Richard Daley, who argued the reforms would force a tax increase in the city, and the Illinois Municipal League, a coalition of city leaders throughout the state that voiced concern over police and fire service cuts in response to the reduced benefits and budget strains.
Bobkiewicz said he does not expect the law will impact Evanston’s public safety services or the city budget writing process. Evanston’s fiscal year ends on March 31.
“Because the unions have worked cooperatively with us, we’ve been able to avoid some of the things other communities have had to deal with,” he said.
Last week’s enactment of the municipal police and firefighter law comes as the latest legislation in a statewide push for pension reform. The Illinois General Assembly passed a pension law in a rushed spring session that also raised the retirement age and reduced benefits for new state hires.
Illinois has “the worst-funded public pension plan in the nation,” according to a study by the Pew Center on the States.
