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  #1531  
Old Today, 01:21 PM
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Mary Pat Campbell
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I did try going to the TRS site to find out info on the payments, and all I found was this:
https://www.trsil.org/news-and-event...over-3-percent

Quote:
Discussion: If a school district grants an educator a raise in excess of the applicable threshold in any given year and that raise factors into the educator’s initial pension calculation, then Illinois law requires the school district to pay for the long–term cost of the portion of an educator’s pension created by the portion of the raise that exceeds the applicable threshold.

These costs are called “excess salary payments.” In fiscal year 2017, 343 school districts out of 989 – 34.7 percent – it made excess salary payments, which totaled $3.28 million. The average excess salary payment in 2017 was $9,569.

In the 13 years that the law setting the excess salary payment threshold has been in effect, school district payments to TRS have declined. The high was $7.5 million in payments recorded during fiscal year 2012.

Without this law in place, TRS and state government would be responsible for the entire long–term cost of pensions created by large salary increases.

It sounds like they intend for the extra cost to be paid in one lump sum, but it's not clear to me that's what happens...as there is no example I can find from them.
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  #1532  
Old Today, 02:29 PM
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Latest report goes into some detail, showing $15 million was charged for individuals who exceeded "normal activity", including excessive pay raises and too much sick leave pay among others. I still do not see how these were calculated, but I suspect that they did not charge the full present value of the increases in pension resulting from the activity.

https://www.trsil.org/sites/default/...n-Rpt-Full.pdf
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  #1533  
Old Today, 02:55 PM
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Quote:
Originally Posted by StillCrazed View Post
Latest report goes into some detail, showing $15 million was charged for individuals who exceeded "normal activity", including excessive pay raises and too much sick leave pay among others. I still do not see how these were calculated, but I suspect that they did not charge the full present value of the increases in pension resulting from the activity.

https://www.trsil.org/sites/default/...n-Rpt-Full.pdf
Thanks for the link.

The only part of the calculation I've seen explained is how they determine the "excess" amount... but not how that translates into the actual penalty (pardon, "excess salary payments). Given the amounts are so low, it seems unlikely to me that these really are the full actuarial present value of the boosted benefits, even with optimistic investment rates (and pessimistic mortality rates)
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Old Today, 04:13 PM
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QUINCY, ILLINOIS

https://www.whig.com/20181009/quincy...on-costs-rise#

Quote:
Quincy fire, police pension costs rise

Spoiler:
QUINCY -- Pension costs for police and firefighters continue to climb.

The Quincy City Council on Tuesday night received actuarial figures that showed the city should pay $535,000 more than last year in total contributions to the two funds.

Comptroller Sheri Ray said Illinois requires that cities contribute no less than is recommended by either the state actuarial or private actuarial firms. Contributions are calculated based on the amount in pension accounts, the number of workers in line for pensions, their ages, likely lifespans, likely returns on investments and payout rates.

"The city's private firm says our fire pensions are 42.2 percent funded ... and police are 46.6 percent funded," Ray said.

The Finance Committee is going to consider pension contributions soon and will make a recommendation to the full City Council.

Alderman Mike Farha, R-4, who is chairman of the Finance Committee, said, "There's no easy source of revenue."

Aldermen also voted to install a direct capture diesel exhaust system in all Quincy fire stations. The cost will be $141,740, with the city's portion set at $12,885.45.

Fire Chief Joe Henning said the exhaust systems should be installed by the end of December or in January.

"This is an Assistance to Firefighters Grant from FEMA (Federal Emergency Management Agency) and the Department of Homeland Security. Communities apply based on population, and we're in a population category that requires that we pay 10 percent of the project and they cover 90 percent," Henning said.

Direct exhaust systems allow for magnetic collars to be placed on the exhaust pipes of fire trucks. They're hooked up to an exhaust line before trucks back into a fire station. When trucks leave on a call, they drive away and the magnetic collars disengage.

"We've got a passive exhaust system now; it's triggered when the door opens. A fan starts running, and it takes 15 minutes to turn over the air in the building," Henning said.

While the passive exhaust system is better than leaving the diesel exhaust inside the buildings, national studies show that people in those buildings have an increased risk of cancer, Henning said.

In other action:

Alderman Dave Bauer's appointment as chairman of the Aeronautics Committee was confirmed.

Emergency repairs of $3,491.80 were paid to Brinkman Plumbing Contractors for work at St. Vincent's Home near 10th and Sycamore.

Fire hydrants, fittings and hot taps for dead-end mains were bought from Core & Main of Washington, Ill., at a cost of $25,256. Items will be used in the Silverthorne Estates subdivision.

City Clerk Jenny Hayden was presented with her master municipal clerk certification on behalf of the International Institute of Municipal Clerks.

Henning said city residents may call the Quincy Fire Department at 217-228-4459 to request free smoke detectors with 10-year batteries.


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  #1535  
Old Today, 04:14 PM
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OAK LAWN, ILLINOIS

https://fixedincome.fidelity.com/ftg..._110.1#new_tab
Quote:
Chicago suburb inches toward junk over pension woes

Spoiler:
CHICAGO — The southwest Chicago suburb of Oak Lawn is at risk of losing its investment grade over the weight of its pension burden and the risk its pension funds could move to intercept its share of collected revenue to make up for contribution shortfalls.

Moody’s Investors Service cut Oak Lawn’s rating one notch to Baa3 from Baa2 and assigned a negative outlook. The village has $75 million of outstanding debt.

“The downgrade to Baa3 is based on heightened operating risk associated with the village's high and growing pension burden,” Moody’s wrote.

The village’s current contributions don’t meet an actuarial level as required under state law and so it could face the diversion of state collected funds such as its share of local sales taxes and income taxes if sought by the funds. The intercept was included in previously approved state pension legislation and the state comptroller earlier this year began enforcing it.

Several public safety funds have requested such a diversion — most notably the south suburb of Harvey, which subsequently reached a legal settlement with its police and firefighters’ funds splitting its share of state collected revenues.

While local governments have their own individual public safety funds, most outside Chicago participate in the healthier Illinois Municipal Retirement Fund to cover general employees. The IMRF can now intercept state funds and it has moved on a handful of local governments to do so.

“While such a diversion is reportedly not imminent, such risk is heightened by the village's limited reserve position,” Moody’s said.

The village does have some budgetary flexibility due to declining debt service costs and certain operating revenues designated for capital that could be redirected to operations. It also enjoys broad legal flexibility to raise local taxes on its moderately sized tax base with an average demographic profile and moderate debt burden.

“The negative outlook reflects our expectation that, although village actions to increase pension funding will slow the rate at which unfunded liabilities are growing, plan status will continue to worsen and potentially strain the village's budget over the next several years,” Moody’s said. “The outlook also considers the direct risk to liquidity created by current funding levels given the village is not in compliance with state law.”

The village is considered an inner ring suburb about 20 miles southwest of downtown with a population of about 56,000.


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FUNDED RATIOS

https://www.bloomberg.com/graphics/2...siness#new_tab

Quote:
Pension Fund Outlook Brightens in 41 States
By Danielle Moran
October 12, 2018
A record setting run for the stock market has brightened the outlook for most state pension funds. The median funding ratio—a measure of how much pension liabilities are covered by assets currently held—rose to 73.7 percent in 2017 from 71 percent in 2016, though most fell below where they were in 2015. The gap between assets and liabilities widened in only seven states last year.

But states aren’t all out of the woods. Even though New Jersey, Kentucky and Illinois improved in 2017, they continue to have only about one third of the money they need to pay retirement benefits. Minnesota, the only state with double digit gains, saw its assets grow to 63.3 percent, from 53.2 percent of its liabilities in 2016. South Dakota and Wisconsin’s retirement systems have more than what they need, while Tennessee, New York, Idaho, North Carolina, Utah and Nebraska are all more than 90 percent funded.

We’ve ranked the states by the size of their funding gap. The lower the funding ratio, the more money the state will eventually have to raise to meet its pension obligations.
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Old Today, 04:21 PM
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ILLINOIS

http://www.chicagotribune.com/news/o...y.html#new_tab

Quote:
Commentary: Yes, Illinois can eliminate legislative pensions

Spoiler:
It’s naive to think Illinois will ever see real pension reform. At least not as long as state politicians continue to get big pensions from the same retirement plans they’re supposed to fix.

It’s a clear conflict of interest.

ADVERTISING


If Illinoisans ever want to see change, they’ll have to demand an end to legislative pensions. Fortunately, the idea isn’t as far-fetched as it sounds.

Conflicts of interest are inherent everywhere in government and business. It’s why investment bankers can’t trade in the stocks of companies they advise. And why managers in corporations aren’t allowed to supervise family members.

But in Illinois, overly generous pensions have helped turn part-time lawmakers into self-interested career politicians — making much-needed pension reform difficult.

Just look at the lifetime pensions some recent retirees can expect for having worked part time in the legislature for 20 years: Sen. Jeffrey Schoenberg, $2.5 million. Rep. Elaine Nekritz, $2 million. Sen. Kirk Dillard, $2.4 million. Those amounts are based on normal life expectancies.

The state’s ex-governors also can’t escape the conflict-of-interest question. Jim Edgar created the much-maligned 1996 pension ramp, and Pat Quinn borrowed billions in pension obligation bonds, a flawed strategy. And yet they, too, can expect $4.6 million and $3 million, respectively.

It’s no wonder Illinois lawmakers are so beholden to the status quo.

The good news is there’s a trend Illinoisans can leverage: Legislators have begun refusing pensions. It all started when Rep. Tom Morrison, R-Palatine, while on the campaign trail in 2010 said he’d reject a pension. He felt he couldn’t credibly promise his constituents he’d reform pensions while benefiting from one, too. “If I had remained in the system, I would have been seen as part of the problem. I had to opt out.”

Today, 50 current legislators — nearly 30 percent of Illinois’ legislature — have already opted out of the pension plan, according to the retirement system’s records.

That includes 37 Republicans and 13 Democrats, from the conservative Morrison to the progressive Sen. Andy Manar, D-Bunker Hill.

Wirepoints launched an initiative in August to encourage legislative candidates to pledge to refuse a pension. So far, 15 legislative candidates across the state have signed that pledge to refuse a pension, if elected.

The other good news: Ending pensions for current and future politicians is entirely within the General Assembly's control. There are no unions to block the way. No low-income workers to be considered. It’s just politicians and their pensions.

The transition away from pensions is simple. Lawmakers keep the benefits they’ve already earned, but going forward they’ll contribute to Social Security and/or a deferred compensation plan.

Getting the remaining politicians to give up their pensions won’t be easy, though. Illinoisans will have to pressure those legislators that want to keep their pensions. Fortunately, politicians have given their constituents plenty of ammunition.

For starters, lawmakers have failed miserably at their jobs. They haven’t balanced the budget in nearly two decades. They’ve created the nation’s worst pension crisis, as reported by Moody’s Investors Service. And they’re ultimately responsible for the net loss of 1.4 million Illinoisans to domestic outmigration since 2000, according to U.S. census data. All that has left the state at the brink of a junk credit rating. Lawmakers simply don’t deserve pensions.

Then there’s the fact that Illinois legislative work is meant to be part time. Yet most politicians have private-sector jobs — including House Speaker Michael Madigan’s infamous position as a property tax lawyer. Despite that, lawmakers treat their part-time political work as if it were a full-time job — and grant themselves generous compensation to match.

And most embarrassingly, at just 15 percent funded, the lawmaker pension plan is just plain broke. Without taxpayer bailouts, the fund would run out of assets in less than three years, based on data from the Commission on Government Forecasting and Accountability.

The stage is set for ending lawmaker pensions entirely. The legislators and candidates who’ve already rejected a pension are growing in number.

The hard part for Illinois’ remaining politicians will be voluntarily overcoming their own self-interest. If they won’t, the next step is for Illinoisans to shame them into doing what’s right.

Ted Dabrowski is president of Wirepoints, an independent research, commentary and news organization. John Klingner is a policy analyst at Wirepoints.


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