Pension Reform Remains a Hot Issue
Pension reform still very much on the front burner
“You knew what you were getting yourself into when you took the job." It’s a mantra that virtually every fire and police official has heard, as discourse about public pensions continues to be heated and controversial.
Ironically, it’s difficult if not impossible to find a person in uniform that will disagree with that statement in general. Young people who become firefighters/paramedics do in fact know that they’re signing on for jobs entailing long hours, working holidays, dangerous situations and often brutal conditions. Something else however that they also know when they take the job, is that they’ll receive a reasonable pension at their retirement.
As is true across the country, Illinois is finding that public pension funds are underfunded and facing depletion. Nothing legislatively will happen with pension reform until the fall veto session of the general assembly. In the meantime however, it continues to be a topic of hot debate. According to all parties involved, this is largely due to misconceptions about police and fire pensions on the part of the public. Without question, public pensions and pension reform is a “complex and emotional topic,” said Illinois State Senator and former Downers Grove Mayor Ron Sandack.
“There’s a ton of misinformation and a ton of anecdotal information that drives the emotions even further," he said.
Firefighter/paramedic Rob Pekelder is the president of the Downers Grove Professional Firefighters Association. Public pensions have probably been more on the radar of the general public over the past three or five years, Pekelder said, largely due to the slump in the economy.
“When the economy was good, no one complained about our pensions.” This is for good reason, he added “Our pensions are not extravagant, especially for the type of work that we do."
One of the most prevalent false impressions about fire and police pensions that clouds peoples’ perspectives on the issue, is the idea that all public pensions are one and the same. This is not true. Downers Grove Police Sgt. Paul Lichamer is the president of the police pension board, and former president of the Union FOP Lodge 73.
"Everyone typically looks at government pensions and clumps us all together into one group. We’re not the same as the state workers such as the teachers. The distinction is important because we all do different jobs,” he said. “We can’t work until the same ages as other public employees can. The physical demands and stresses of the job take their toll as we get older.”
Something about which most of the public seems unaware Pekelder said is the fact that police and fire contribute more than 9 percent of their salary to their pensions. Furthermore, they don’t get social security upon retirement, making them reliant solely upon their pensions.
Sandack said that his primary concern about public pensions is not that they’re exorbitant or unfair. It’s that they’re unsustainable as structured.
“What hurts me is the bashing of public employees, municipal or state, including the teachers. That they’re somehow greedy. They don’t get into the business to make a million bucks. The vast majority are selfless public servants who deserve lifetime security as bargained for when they got their jobs. I’m in favor of reform, only because it has to happen or what was promised to them won’t be there,” Sandack said. “If we don’t act soon, the municipal funds are in danger of not being there and failing. At the end of the day, these funds as presently designed and maintained won’t be enough. They’re unsustainable. It’s cliché but true. The math is irrefutable. We have to change the benefit structure.”
Earlier this year, preliminary changes were made for new fire and police hires.
“The retirement age was changed from 50-55, and the benefits calculation was changed,” said Pekelder. The union was very uncomfortable with this, as they feel it’s wrong to separate new and existing employees into two distinct tiers. Furthermore, he said, changing the retirement age is dangerous because of how strenuous the work is. “After age 50, you really increase the likelihood of getting injured on the job,” he said.
“Physically, we can’t work until we’re 65. People don’t want a 65-year-old policeman trying to run after an 18-year-old. We would have more duty disability and workman’s comp claims than retired police officers at that age.”
From the union’s perspective, Pekelder said, the one positive outcome from the revision, is that there’s a requirement for employers to consistently fund the pension properly. He and Lichamer both stressed that Downers Grove has always funded appropriately. “We have never had that issue. Our village has always done the right thing. But it’s significant because it’s happened so often around the state,” Pekelder said.
He added that the unions will be universally against any changes made to pensions of current employees.
“The long and short of it is that we’re against any reduction and impairment of our benefits. Period. For current employees we are steadfastly against it,” said Pekelder, adding that such changes would be unconstitutional. “When someone is hired, the pension benefits are part of a contractual relationship, and the benefits cannot be reduced. I’ve been planning for retirement using one set of rules. It’s not constitutional to change those rules.”.
“Our benefits shouldn’t be reduced. It’s morally wrong, it’s constitutionally wrong, in which case it will be decided by the courts,” said Pekelder.
In working toward pension reform, Sandack said that union representatives will meet with legislators and decision makers to come to a reasonable compromise.
“I’d like a phased in way of making changes to benefits. I like the idea of giving options that can get these funds healthy and keep the system sustainable so that people who enter the public realm have pensions they can depend upon. I hope that the heated discussions calm down and we don’ have the toxic realm upon which conversations take place,” he said.
Without question, Sandack said he believes two things must happen.
“There are a myriad of ideas, but payment of high contributions by the beneficiaries will have to occur. And the state must unequivocally make their payments. Reality is such that we will not return to the normal we once knew. There’s a new normal. We’ll need to work longer than we wanted to, pay more into the system and then we’ll have a sustainable plan upon which recipients get what they deserve. We have to be more austere. We have to get real,” Sandack said.