Illinois passes state law giving pension boost to one Chicago alderman
With the passage of House Bill 5342, Chicago Ald. Nick Sposato is now in a class all of his own, eligible to steer his political earnings toward a more profitable firefighters' pension system.
Before taking over in the 38th Ward, Sposato previously worked as a Chicago firemen. HB 5342 effectively redefines what classifies as an “active fireman,” altering the state pension code to allow those who were once members of the department to transfer any benefits they might be eligible for to the more profitable firefighter's pension system.
While Sposato is the only current state lawmaker benefitting from the change, the legislation paves the way for any alderman with a similar history to benefit somewhere down the road. Ald. Anthony Napolitano, 41st Ward, would be the next council member to qualify, provided he wins a second term in early 2019.
Lawmakers from both chambers of Congress overwhelmingly voted in favor of the legislation, easily overriding an earlier veto imposed by Gov. Bruce Rauner.
While the fire pension system offers far more generous retirement benefits than the municipal fund alderman are typically lumped into, Illinois Policy Institute (IPI) reports not everyone walks away a winner from the new changes.
“Those who stand to lose are current firefighters, whose retirement security is jeopardized by a severely indebted pension system, and taxpayers on the hook to cover those deficiencies,” IPI stated.
As recently as fiscal year 2017, Chicago’s fire pension fund had less than 21 cents in its coffers for every dollar owed out in benefits. Just two months ago, the Firemen’s Annuity and Benefit Fund of Chicago filed two claims with the Illinois comptroller alleging the city was some $3.3 million in arrears in payments going all the way back to 2016.
Collectively, IPI estimates that the city is now on the hook for at least $42 billion in pension liability, even as Mayor Rahm Emanuel continues to employ a system of regular property tax increases and new taxes on everything from ridesharing to e-cigarettes to generate added revenue.
With required pension liabilities estimated to at least double by 2030, IPI argues only a system of reforms can now save the city from itself and the "outrageous" system of pension liability lawmakers have obligated taxpayers to.
“The reforms needed to rein in growing pension costs must come from state lawmakers, beginning with a constitutional amendment, and ending with an affordable 401(k)-style alternative for all future government workers,” the website added.