The Chicago Sun-Times reports that municipalities won pension cutbacks for incoming cops and firefighters, including bumping up the retirement age with full benefits from 50 to 55, limiting retirement cost-of-living increases, and capping the final salary upon which pensions are based. In exchange, the unions got a pledge by the cities to have their police and fire pension systems 90% funded by 2041.
Chicago’s police and fire pension systems now have less than half of the assets required to cover future liabilities, the news report said.
The legislation requires a steep ramp up in contributions to the funds starting in 2015 — and it mandates those contributions be paid for by property taxes. Chicago Mayor Richard Daley estimates that would require a $550 million property tax increase.
According to the Sun-Times, minutes before the Senate’s vote, Daley — for the third straight day — spoke out against the bill, saying it will take shared sacrifice by all of the stakeholders — retirees, current employees, newly hired workers and taxpayers — to solve the problem created by four under-funded city employee pension funds that will run out of money by 2030. To place the entire burden on Chicago property owners — and mandate the largest property tax increase in the city’s history — would paralyze home sales, the mayor said.Governor Pat Quinn would not say whether he will sign the bill.