Two Pensions for Future Police Prohibited

Here’s a pension bill (House Bill 418) that Governor Bruce Rauner just signed.

Amends the Downstate Police Article of the Illinois Pension Code.

Provides that if a person who is receiving a police pension becomes employed as a chief of police, the person must so notify the pension fund paying the pension and any other fund in which the person has service credit, and the pension shall be suspended until the employment as chief terminates; if the person elects to participate in IMRF, the person must also notify IMRF of those police pension funds.

Provides that if a person who is receiving a police pension enters service as a police officer with a different municipality, the person must so notify the pension fund paying the pension and the pension shall be suspended until the service terminates, unless the different municipality had a population of less than 6,000 at the time of the return to active service.

Applies to persons who first enter service after the effective date of the amendatory Act.

State Rep. David McSweeney is one of the prime co-sponsors.

Here is Governor Bruce Rauner’s press release:

Gov. Rauner signs bill to protect taxpayers from police pension fund abuse

NAPERVILLE (Aug. 24, 2017) – Gov. Bruce Rauner today signed House Bill 418, which prevents retired police officers from opting into the pension system a second time if they return to the force as a police chief or join another municipality’s force.

This bill will protect taxpayers from situations in which police officers are collecting two pensions from the same pension fund — a problem known as “double dipping.” Police officers that are promoted to police chief or join a different force will enroll in 401(k)-style retirement plans instead of opting into the pension fund again.

“Illinois taxpayers can’t afford to pay the same person twice,”Gov. Rauner said. “This bill is an important step to help control Illinois’ unsustainable pension costs. It will protect taxpayers from pension fund abuse while still ensuring our police officers are fairly compensated for their service.”

The bill was sponsored by two Naperville Republicans after controversy over whether a Naperville police chief should be able to accrue new pension payments while simultaneously earning a salary of over $168,000 and collecting payments from his first pension.

“There is a loophole in current law that allows double-dipping into the police pension systems, and it’s costing municipalities and local taxpayers a fortune. Retired law enforcement officers have earned their pensions, but they should not be able to claim multiple pensions that we can’t afford,” said Rep. Grant Wehrli (R-Naperville), the primary sponsor of this legislation. “Closing this loophole is one step toward keeping our struggling pension systems solvent.”

“Illinois’ pension systems are in dire need of repair as our pension liabilities at both the state and local levels continue to rack up,” said Sen. Connelly (R-Naperville). “While I recognize that many changes need to occur within the current system, this law at least gets us going in the right direction.”


Comments

Two Pensions for Future Police Prohibited — 7 Comments

  1. Better known as the lake in the hills Jim Wales law. Did anyone ever figure out why the entire police and fire commission resigned, and Jim Wales announced his retirement days later?

  2. @John Doe. . .

    Did Wales get a second pension out of that deal? Or did he, as the law proposes enroll in a 401-K? Also, I don’t think that, as Director of Public Safety, he was still classified as a police officer. Fine distinction and all that, but the law is the law.

    All well and good to limit them to one pension for their law enforcement time, but to make someone who has earned their pension give it up (albeit temporarily) so they can be a chief elsewhere doesn’t necessarily seem to be the smartest move. It seems like an awful lot of valuable EXPERIENCE could be wasted. If you’re running a small town (or a large one for that matter) with everything else being equal, would you rather hire a 20-25 year veteran chief with a proven track record or be forced to restrict your choices to somebody who looks pretty good on paper, but doesn’t have the “trial by fire” experience?

    Not sure of the answer, but there’s more to the puzzle to consider besides “Hey! We can’t have anyone who’s drawing a pension get another one.”

  3. They need to go after the Reciprocal Act next.

    That law allows state employees to use their service time at a lower paying government job towards a pension in a much higher paying government job in a different pension fund.

    That is why Assistant State’s Attorneys with a fair amount of service time are so anxious to become judges – they can quickly qualify for a much better pension.

    The scam is very popular with legislators, so I doubt they will be in any hurry to change things.

  4. @Cheaper

    Yes he got a second pension: Here’s the 2016 payout:

    James A Wales Downstate/Suburban Municipal (IMRF) $42,681

    Plus I see he receives a third pension for his part time, one class a year teaching deal at McHenry County College.

    James Wales State Universities (SURS) $15,112

    What other part-time teachers are getting MCC pensions?

    Did anyone ever figure out why the entire police and fire commission resigned, and Jim Wales announced his retirement days later?

  5. How about a law prohibiting legislative benefit hikes to underfunded pensions.

    It could be called the Bill Zettler Illinois Pension Scam Law.

  6. House Bill 0418 (HB 0418) passed under the leadership of Chicago Democrat House leader Michael Madigan and Chicago Democrat Senate leader John Cullerton was signed into law on as Public Act 100-0281 (PA 100-0281) on August 24, 2017.

    +++++++++++

    Illinois Policy Institute

    Rauner Signs Police Pension Reform Ending Double Dipping, Introducing 401(4) plans

    by John Klingner

    September 2, 2017

    “Under Public Act 100-0281, which Rauner signed Aug. 24th, Illinois police chiefs will no longer have the option of collecting a second pension by being rehired by a city as a civilian.

    And police officers who return to service in a new city after retiring won’t be able to collect a second police pension by enrolling in that city’s local police pension fund.”

    http://www.illinoispolicy.org/rauner-signs-police-pension-reform-ending-double-dipping-introducing-401k-plans

    +++++++++++++

    The law addresses a few scenarios.

    ————–

    Scenario 1

    Some police retired, and while drawing a Downstate Police Pension, were hired as a police chief, by the same municipality or a different municipality, and contributed to the IMRF pension fund for their police chief employment.

    That was permissible because the Downstate Police Pension fund is a separate fund from the IMRF pension fund.

    Such police chiefs were receiving one public sector pension, actively employed, and contributing to a second public sector pension.

    With the new law, such police chiefs hired in the future (those beginning their police chief career on or after January 1, 2019) would not not be able to contribute to IMRF, but could contribute to an employer sponsored 401K.

    The new law is not retroactive.

    It only applies to Chiefs of Police who begin their Chief of Police career on or after January 1, 2019.

    No restrictions were placed on the amount of salary such a police chief could earn.

    —————–

    Scenario 2

    Some police retired, and while drawing a Downstate Police pension, went to work for another police department, not as a police chief but perhaps as a police officer, contributing to the 2nd police departments Downstate Police pension.

    This new law changes that, but only for police officers first hired to their first police officer job on January 1, 2019 or after.

    —————–

    Scenario 3

    Another scenario is police officers with 10 years of service who move to a different employer can opt into a 401k at the new employer, instead of the new employer’s Downstate Police Pension Fund.

    +++++++++++

    A note about Downstate Police and Downstate Fire pensions.

    Each employer (city, village, town, fire protection district) has its own pension fund.

    That makes them different from other multi-employer pensions in Illinois, such as the Teachers Retirement System (TRS), State University Retirement System (SURS), or the Illinois Municipal Retirement Fund (IMRF).

    The investments are not pooled into one large Downstate Police or Downstate Fire pension fund, as is the case for TRS, SURS, and IMRF.

    ++++++++++++

    For those interested in the details, here is the new law:

    ilga.gov/legislation/publicacts/100/PDF/100-0281.pdf

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