ROCKFORD (WREX) — For years, public safety pensions were controlled locally, but now, those funds will be controlled by the state. It's all part of the state's plan to consolidate municipal pensions.
There are more than 600 separate municipal public safety funds in Illinois.
"Essentially everyone but Chicago was consolidated into a new state-wide fund for investment purposes," Carrie Hagerty, Rockford's Finance Director, explains.
That's because for years, the contributions to municipal public safety pensions have increased to a point where it's become a major line item in city's budgets, leaving less money for everything else. But this consolidation seeks to change that.
"What it will do is it will give us access to things like private equity, hedge funds, asset classes that have the possibility, no guarantee, but the possibility to enhance our returns over time," Alderman Chad Tuneberg says.
Right now, Rockford does not have access to some of those alternative funds, but with more investment opportunities, Tuneberg and Hagerty say that could mean the city saves more taxpayer dollars.
"The more this money — this invested money — earns in the market, the less taxpayer dollars are needed to fund pensions," Hagerty says.
While that could help the city in the long run, it does not mean your property taxes will go down. It just means it could slow the acceleration of the portion of your property taxes that goes to pay the pensions.
Additionally, Hagerty says she understands the concerns local public safety pension boards have given that they will have to turn the funds over to the state to manage. However, she points out one reason not to be concerned.
"They are guaranteed those benefit payments because of the structure of the state constitution," Hagerty explains.
13 WREX reached out to the Christopher Scrol, the President of the Rockford Professional Fire Fighters 413 and he gave us this statement about the pension consolidation:
"We fully support it. We understand there are budgetary and financial issues. We need to respond in a fiscally responsible way, but that isn't overreacting, and this is probably the first step in a much longer process."
13 News also reached out to Vince Kelly, the President of the Policemen's Benevolent and Protective Association Unit 6. Kelly said in a statement:
"While we understand the change, the men and women who have served must get the return they were promised."
For right now, the new boards managing the consolidated funds from the state are still in the works, but this is a game-plan for the future.