Tag: firefighters

Peter Roff: Beware the Pension Bailout Hidden Inside COVID-19 Relief Bill

Mary Pat Campbell

Link: https://www.noozhawk.com/article/peter_roff_beware_pension_bailout_hidden_inside_covid_19_bill_20210403

Excerpt:

California’s total estimated pension liability is something like $1 trillion. To balance its books, Sacramento had to get money from taxpayers in Florida, South Dakota, Utah and, other, better-managed states (through the COVID-19 stimulus) to close the gap.

Whether it will be enough to stop municipal fire departments from bringing private ambulance and medical services “in-house” is yet to be seen. Hopefully, it will — which would be a good thing for taxpayers and people in need.

Otherwise, the pattern of using federal reimbursements for services provided to cover the losses in underfunded public employee pension plans will continue, much to the determinant of taxpayers.

Author(s): Peter Roff

Publication Date: 3 April 2021

Publication Site: Noozhawk

Moody’s warns pension benefit increase for Chicago firefighters a ‘credit negative’ – Quicktake

Mary Pat Campbell
Moody’s warns pension benefit increase for Chicago firefighters a ‘credit negative’ – Quicktake

Graphic:

Excerpt:

Anybody who’s been following Chicago knows the last thing the city needs is more debt. Chicagoans are being swamped by pension debts, already the biggest per-capita burden of any major city in the country. By signing the new legislation into law, Pritzker has shoved more debt onto ordinary Chicagoans.

Not surprisingly, Moody’s has called the action “credit negative…because it will cause the city’s reported unfunded pension liabilities, and thus its annual contribution requirements, to rise.”

…..

Two important facts to note about the city’s pension shortfalls. First, Chicago officially says its four city-run pension funds – police, fire, municipal and laborers – are short by some $31 billion. But Moody’s puts the number at nearly $47 billion using more realistic, market-based assumptions. 

Second, those debt numbers don’t include the Chicago Public Schools. When you add its $23 billion (Moody’s, 2018) pension shortfall, the total burden on Chicagoans for Chicago-only debts jumps to $70 billion. Divvy that between Chicago’s 1.04 million households and you’re talking about $67,000 in debt each. And that number far underestimates the real household burden considering nearly 20 percent of the city’s population don’t have the means to contribute a dime to that pension shortfall. 

Publication Date: 10 April 2021

Publication Site: Wirepoints

Pritzker digs Chicago financial hole deeper by increasing city firefighter pensions – Wirepoints

Mary Pat Campbell
Pritzker digs Chicago financial hole deeper by increasing city firefighter pensions – Wirepoints

Graphic:

Excerpt:

Chicago households are on the hook for a combined $63,000 in Chicago-only debt, based on Moody’s calculations. It’s why the city and the school district have been junk rated for years.

Pritzker’s COLA increase runs against what most of Illinois’ political elite already know – COLA cuts are necessary and inevitable at all levels of government. As Greg Hinz said in his review of Wirepoints’ Pension Solutions, “…that juicy perk over time has amounted to megabillions that state government just doesn’t have.”

The COLA hike will cause more financial headaches for Chicago. Mayor Lori Lightfoot says the COLA increase will cost the city an additional $18 to $30 million a year in pension costs. In all, the perk will force taxpayers to pay an additional $850 million over time.

Author(s): Ted Dabrowski, John Klingner

Publication Date: 8 April 2021

Publication Site: Wirepoints

Illinois governor signs bill that increases Chicago’s pension liabilities

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202104061236SM______BNDBUYER_00000178-a783-de03-a7ff-b7e7bf7e0001_110.1#new_tab

Excerpt:

Illinois Gov. J.B. Pritzker signed legislation that benefits retired Chicago firefighters, rejecting city warnings adding to its already burdensome pension tab could damage ratings and drive up taxes.

The added cost to bring cost-of-living adjustments for all firefighters in tier one up to a simple 3% annual increase despite their birth date amounts to $18 million to $30 million annually and up to $823 million in full by 2055 when the fund is slated to reach a 90% funded ratio.

Pending legislation to do the same for the police fund carries a steeper price tag of up to $90 million annually and $2.6 billion through 2055.

Author(s): Yvette Shields

Publication Date: 6 April 2021

Publication Site: Fidelity Fixed Income

Gov. Pritzker Signs Firefighter’s Pensions Reform Legislation Codifying Benefits

Mary Pat Campbell

Link: https://www.riverbender.com/articles/details/gov-pritzker-signs-firefighters-pensions-reform-legislation-codifying-benefits-49231.cfm

Excerpt:

HB 2451 addresses disparate pension benefits among Chicago firefighters. Currently, employees eligible for a pension in the Firemen’s Annuity and Benefit Fund of Chicago (FABF) who were born after January 1, 1966 are granted a 1.5 percent COLA. However, firefighters who may have started on the force the same day, may unfairly receive different benefits based on their dates of birth. The legislation addresses this discrepancy by adjusting the COLA for these firefighters from 1.5 percent to 3 percent.

The legislation eliminates the 30 percent cap on cumulative COLA adjustments. For employees eligible for a 1.5 percent COLA, they would have hit the cap at 20 years. The reforms made in this legislation provides firefighters the ability to plan for themselves and their families.

HB 2451 is effective immediately.

Publication Date: 5 April 2021

Publication Site: Riverbender

PFRS Boost & NJ Active Update – December, 2020

Mary Pat Campbell
PFRS Boost & NJ Active Update – December, 2020

Excerpt:

This is a good time to review who will be impacted as state pension data on active participants in the retirement system has just been updated through December, 2020. There are no dates of birth so it is impossible to get an accurate count as some of those members who have between 18 and 25 years of service may already be age 55 but here is my cost estimate anyway.

All PFRS members: 40,532 with average salary of $96,364

Already with 25 years of service: 3,252 with average salary of $143,156

18 to 25 years of service: 10,543 with average salary of $118,750

If half of those eligible decide to retiree on their 50% pension for an extra 3.5 years that would come to an extra billion dollars coming out of the retirement system which is about double what the OLS estimated as the maximum.

Author(s): John Bury

Publication Date: 2 March 2021

Publication Site: Burypensions

California’s Pension Woes Are Made Worse By Moving Emergency Services In House

Mary Pat Campbell

Link: https://www.forbes.com/sites/ikebrannon/2021/02/28/californias-pension-woes-are-made-worse-by-moving-emergency-services-in-house/?sh=40f419203629

Excerpt:

However, there is no significant budgetary reform in the offing, and California’s cities and counties feel no compunction to address the issue. In fact, these days several municipalities are taking steps that will ultimately serve to exacerbate the shortfall by bringing in all of their emergency services “in house,” rather than contracting out emergency services to a private entity. 

The rationale typically given for such steps is that doing ambulance and fire services completely in house helps coordinate emergency responses and creates efficiencies, improving services and saving them money. 

However, such efforts rarely manage to help towns—or the state, for that matter—to save money. Contracting out ambulance services is typically done by smaller communities that don’t have the demand to support a full-time ambulance crew, which can be expensive—a tricked-out ambulance alone costs over $150,000. Combining with another nearby community generates economies of scale. 

Author(s): Ike Brannon

Publication Date: 28 February 2021

Publication Site: Forbes

If Pritzker and Welch really want voters’ trust, they’ll do this

Mary Pat Campbell

Link: https://www.chicagobusiness.com/joe-cahill-business/if-pritzker-and-welch-really-want-voters-trust-theyll-do

Excerpt:

If Pritzker and Welch are serious about winning trust, they’ll allow Illinoisans to vote on a standalone constitutional amendment repealing the so-called “pension protection clause.” To build public support and treat retirees fairly, such an amendment could be narrowly drawn to permit only reductions in future pension increases under the COLA mechanism.

Sure, public employee unions are likely to fight any change in pensions. But it’s worth trying to win their support. It can be done; Arizona unions backed a narrow amendment to a pension protection clause in that state’s constitution. If unions won’t cooperate, Pritzker and Welch should forge ahead anyway, as Rhode Island officials—led by Democrat Gina Raimondo—did in tackling a similar pension crisis.

Only after passing such an amendment and reducing the overall pension obligation can state officials justifiably ask taxpayers for money to close the remaining gap. Would a graduated income tax be the right way to raise the necessary revenue? Maybe. I’m not opposed to it on principle. The vast majority of states with an income tax charge higher rates on higher incomes. And the necessity of a constitutional amendment would give voters the final say.

Author(s): Joe Cahill

Publication Date: 25 February 2021

Publication Site: Crain’s Chicago Business

St. Louis mayor vetoes firefighters’ pension change; action sets up a veto override fight when aldermen reconvene April 19

Mary Pat Campbell

Link: https://www.stltoday.com/news/local/govt-and-politics/st-louis-mayor-vetoes-firefighters-pension-change-action-sets-up-a-veto-override-fight-when/article_b2c1a7d3-3c7c-52d1-b2ff-98fb5096d473.html

Excerpt:

Warning that it would be “fiscally irresponsible,” Mayor Lyda Krewson on Thursday vetoed a bill that would return supervision of all city Fire Department pensions to a firefighter-controlled board.

The Board of Aldermen earlier this month approved the bill despite warnings from Comptroller Darlene Green, Budget Director Paul Payne and others that the measure would reverse some reforms enacted in 2012 that put a check on the city’s pension liabilities.

Krewson, in her veto message to aldermen, said she shared those concerns.

Author(s): Mark Schlinkmann

Publication Date: 25 February 2021

Publication Site: St. Louis Post-Dispatch

Lightfoot sends letter to Pritzker urging him to veto firefighters pension bill

Mary Pat Campbell

Link: https://www.radio.com/us99/news/local/lightfoot-urges-pritzker-to-veto-firefighters-pension-bill#new_tab

Excerpt:

Chicago Mayor Lori Lightfoot is urging Governor JB Pritzker to veto a bill boosting pensions for thousands of Chicago firefighters.

The bill, introduced by state Sen. Robert Martwick, D-Chicago, passed in the waning hours of the lame duck session and awaits Pritzker’s signature or veto.

Mayor Lightfoot said the pension legislation will lead to perpetual property tax increases.

Author(s): Mike Krauser

Publication Date: 19 February 2021

Publication Site: WBBM Chicago

Lightfoot urges Pritzker to veto firefighters pension bill

Mary Pat Campbell

Link: https://chicago.suntimes.com/2021/2/18/22290071/chicago-firefighters-pension-bill-unfunded-liabilities-martwick-lightfoot-governor-pritzker-veto

Excerpt:

A bill that awaits Gov. J.B. Pritzker’s signature would boost pensions for about 2,200 active and retired firefighters, but Mayor Lori Lightfoot wants the governor to veto it. Sun-Times file photo

Mayor Lori Lightfoot is urging Gov. J.B. Pritzker to veto a bill boosting pensions for thousands of Chicago firefighters, arguing it would saddle beleaguered taxpayers with perpetual property tax increases and cripple a pension fund dangerously close to insolvency.

The bill, introduced by state Sen. Robert Martwick, D-Chicago, a Lightfoot political nemesis, passed in the waning hours of the lame duck session and awaits Pritzker’s signature or veto.

It removes the “birth date restriction” that prohibits roughly 2,200 active and retired firefighters born after Jan. 1, 1966 from receiving a 3% annual cost of living increase. Instead, they get half that amount, 1.5% — and it is not compounded.

Author(s): Fran Spielman

Publication Date: 18 February 2021

Publication Site: Chicago Sun-Times

The pension front

Mary Pat Campbell

Link: https://capitolfax.com/2021/02/19/the-pension-front/

Excerpt:

There’s really nothing to strongly disagree with. The city has routinely moved the birth date restriction, but it’s been done in a way that the costs are not funded, which pushes the fund closer to insolvency. This bill would essentially take that routine practice, make it official and force the city to finally pay for it.

Author(s): Rich Miller

Publication Date: 19 February 2021

Publication Site: Capitol Fax