On the Topic of Police Pensions

This post comes to us from Keep the Winfield Police

There have been many statements and varied numbers offered to us by an elected official regarding our police officer pension system. Most of what has been offered seems to have been in the form of catch phrases and crazy numbers. Not much perspective has been offered and while we understand it is hard to do that with a complicated topic, we expect an honest attempt to do so when a bunch of information is tossed out to the public. A proponent or two for the disbanding our police department has taken issue with the pension system by way of blog as another justification for their efforts. Some of what this elected official has offered is:

  • Our police pension fund is only 45% funded;
  • It will cost the tax payers 8 million to achieve the funded status required by law;

There is more, but for now we’ll stick with these. Both of these statements are untrue. We decided to take a look at both the Comprehensive Annual Financial Report (CAFR) ending in 2011 and the Actuarial Valuation for the Winfield Police Pension Fund. We also took a look at the pension law as it exists in Illinois. This is a very difficult topic to understand, knowing that we are going to do our best to be accurate and work within the context intended.

Let us first say that it seems that the hope is people may assume that if the police department is disbanded, the pension obligation disappears. Nothing can be further from the truth. According to the law (40 ILCS 5/3-144.3) and this is a summary, a municipal corporation can only dissolve a pension fund when an independent auditor can certify that there are no liabilities for the fund. In other words, any vested officer (that’s any officer with at least 8 completed years) has the right to collect a pension. According to the above mentioned CAFR our officer’s pension fund has the following obligations:

  • 7 Retired officers collecting or soon to collect when they attain the age of 50
  • 15 officers fully vested and eligible to receive pension benefits
  • 3 not yet vested

That is 25 people, officers that have served our community that have earned their pension and according to the law, no matter what the village does, they cannot avoid their obligation to pay the pension. It will remain regardless. Not only will the pension obligations remain for many many years to come, any officer with less than 20 years of service who leaves for another police department under these circumstances gets to take with them:

  • All personal contributions;
  • All village contributions;
  • 6% per year of service compounded

That will severely deplete the fund, add that with the removal of officer contributions and you can see the fund will quickly be paying out more than it makes. Then the residents are really on the hook.

About Positive on Winfield

Positive on Winfield is a blog with articles on local issues, local events, and local interests in Winfield, IL. Positive on Winfield is the blog website of the local civic action group, Winfield United for a Better Community.

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