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Message from President Devaney
Brothers and Sisters,
The Pension Consolidation Feasibility Task Force will be issuing its report and recommendations today at a press conference in Chicago. As you know, Governor Pritzker announced the formation of the task force in February and appointed me as one of the committee co-chairs to help lead the group’s efforts.
The task force met regularly over the last seven months and worked closely with the Department of Insurance Public Pension Division to evaluate the investment performance of the 291 Downstate and Suburban Firefighter Pension Funds (Article 4) in Illinois. We conducted a thorough analysis of the funds’ performance and compared the results to other public pension funds and market indices over a variety of time frames.
Unfortunately, the aggregate Article 4 investment performance significantly lagged the larger statewide funds and market benchmarks of similar asset allocations. Our funds also pay drastically higher investment management fees than the larger funds further reducing the dollars that are in place to pay the benefits promised to our members.
The Associated Fire Fighters of Illinois has always adhered to the principle of supporting proposals that increase the revenue needed to fund the pension plans designed to provide retirement security for our members and their families. We are also firm in our belief that the funds be held in a secure trust governed by the plan participants and their employers and that each fund’s liabilities and assets are accounted for separately.
Let me be clear, the state WILL NOT have any access to your pension dollars and individual funding levels will be separately maintained subsequent to the consolidation of Article 4 assets.
It is also extremely important to us that the ongoing administration and adjudication of benefit applications be maintained at the local level by a board comprised of active and retired participants from each affected jurisdiction just as it is today.
Our opponents have attempted to leverage the investment performance deficiencies to force a complete overhaul of the Article 4 Pension System. We have defeated numerous legislative proposals that would dissolve the local pension boards and require forfeiture of our assets and benefit administration to an outside entity like the Illinois State Board of Investments or the Illinois Municipal Retirement Fund. The AFFI opposed similar proposals during the task force deliberations and will continue to do so.
The AFFI also insisted the task force take a comprehensive approach to addressing challenges that exist in Article 4. Fixing the inequities that exist in the Tier 2 benefit structure is the top priority of our organization and we made it clear that initial steps to address this problem must be included in any recommendations.
HERE is a summary of the task force analysis and recommendations.
The full report will be available on our website (which you can get to by clicking HERE and you must be logged in to view) after the press conference begins at 1:30p.
The task force is in the process of drafting legislative proposals with the Governor’s office with the goal of introducing legislation in the fall veto session. The AFFI will be providing additional details about the plan and related legislation as it becomes available.
As always, please let me or anyone on the AFFI Executive Board know if you have any questions regarding the task force recommendations or any other topic important to you and your local.
Fraternally,
Pat Devaney, President
Associated Fire Fighters of Illinois
