THE ISSUE: Streator fire and police pension board share actuary
OUR VIEW: For once, good news on this complicated front
When the topic in Streator is municipal pensions, there’s rarely a positive spin. But last week the pension boards for both the police and fire departments agreed to split costs to hire the same actuarial firm to provide estimates of what it might cost to pay for negotiated retirement benefits over the next several decades.
City Manager Scot Wrighton, routinely at odds with the fire union over a variety of issues, rightly credited the decision to hire Foster & Foster, of Naperville, saying the firm that handles about 80 other police and fire pension funds in Illinois including in Peru, will help give a clearer idea of the big picture issues the city faces. He feels going this direction will cut down on certain types of disputes and also speed up the delivery of results, which can only be a good thing for municipal planning.
Wrighton also deserves credit for his pragmatism — “we’re not doing it to reduce the bad news,” he said in reference to the increased cost of funding pensions — because having a better idea of the costs doesn’t do anything to change the fact that pension payments comprise 55 percent of the city’s annual property tax levy.
In a February guest column for The Times, Wrighton laid out a significant component in the ongoing problem, writing: “Local fire and police pension benefits are set by the state, though Illinois contributes nothing toward local pension costs. The Illinois General Assembly is happy to mandate higher police and fire pension benefits, because they do not pay for any of them.”
This puts both the city and the unions in a difficult position. The only thing a municipality can do to mitigate impact on its overall budget is try to negotiate with the unions. The union members simply want to make sure that what was promised them actually comes through when needed. And Springfield is rarely, if ever, at the table with the other parties.
There are similar problems for teacher unions. And quite often there is the voice of taxpayers, wondering why public employee pensions are such a boondoggle while the average retiree is stuck with whatever Social Security pays out. What occasionally is overlooked in such grousing is that these union workers are ineligible for Social Security. They did not pay into it during their working lives. And it’s not as if Social Security is free of its own complications.
Simply put, retirement funding is a guessing game. Workers pay into investment funds, the employer is supposed to as well. The money is supposed to grow through investments — a factor beyond the control of both labor and management — and no one really knows how much money is needed because no one is sure how long the retirees will live or what their needs might be in retirement, nor is there broad agreement on what constitutes “needs.”
There are deeper complications when it comes to police and fire work. Wrighton's column detailed some of the specific challenges of public union contracts in Illinois, such as the Legislature allowing additional forms of compensation into the pensionable base — things like longevity pay and higher education stipends — and we separately note the issue of “double dipping,” where workers who have left their primary career find legal ways to draw both paychecks and retirement dividends.
But also there are realities of police and fire work that government must acknowledge: these are physically and mentally taxing jobs that simply cannot be effectively performed past a certain age. Some don’t even see retirement because the job literally kills them. We might expect a City Hall office worker to keep punching the clock until age 65 or even 70. But a firefighter or police officer is almost certainly going to end their watch much earlier in life, meaning (hopefully) more golden years during which the pension is supposed to be sustaining.
All of which is to say: these problems don’t have simple solutions in the public or private sector, but only one of them gets continually hashed out in council chambers, the pages of this paper and down at the coffee shop or watering hole. So we’re glad to be able to report a spot of optimism and yet remind everyone that finding real, long-term answers is going to require both cooperation and mutual understanding.
No one wants substandard police and fire protection. That much is easy to assert. Beyond that, however, things get tricky. And we ask everyone to try to keep the common good at top of mind.