SPRINGFIELD—A pension reform effort recently passed in the Illinois House of Representatives to consolidate downstate police and fire pensions. The legislation, Senate Bill 1300, was recommended by the bipartisan Pension Consolidation Feasibility Task Force, which found that consolidated assets would increase investment returns and decrease the cost of managing the funds.
State Representative Dan Ugaste (R-Geneva) voted in favor of Senate Bill 1300, as amended.
“I have the utmost respect for our first responders and everything that they do for our community. Their benefits are hard earned and well deserved,” said Ugaste. “But the pension system in Illinois is a tough financial reality that has contributed to the heavy property tax burden our residents are all too familiar with. This pension reform effort not only protects the benefits of first responders in my district but also saves taxpayer dollars.”
Currently there are 649 downstate and suburban police and fire pension funds that are estimated to be underfunded by $11 billion. According to the task force’s report, over the next five years, consolidation could lead to an additional $820 million to $2.5 billion in investment returns alone, which could mean lower contributions funded by property taxes.
“The state’s unfunded pension liability is a huge hinder to our success,” continued Ugaste. “This is a step forward in correcting our course and moving toward larger pension reform in the future.”
Senate Bill 1300 garnered bipartisan support and will move forward to the Senate for confirmation.