For immediate release
March 3, 2010
The Associated Fire Fighters of Illinois issued this statement in response to the news release today from the Pension Fairness for Illinois Communities Coalition:
“Pension reform should be the top priority of the General Assembly if it is serious about balancing the budget. No one understands this more than the Associated Fire Fighters of Illinois.
“Instead of using the current economic downturn to blame police and firefighters for pension problems, local governments should reform pensions in a manner consistent with good faith and responsible government.
“A municipal government group calling itself the Pension Fairness for Illinois Communities Coalition March 3 took completely out of context the findings of a state commission study on police and firefighter pensions. The PFIC recklessly left the impression that sweeteners in pension benefits have caused pension funding gaps in police and firefighter pension funds. This is simply not true.
“Springfield Mayor Tim Davlin, the president of the front group’s parent organization, the Illinois Municipal League, incorrectly points to retiree benefit increases as the cause of this gap. Such is not the case.
“In fact, his city is the prime example of why public safety employee pensions have lost ground in recent years. In the case of Springfield, only 16 percent of the increase in the city’s pension shortfall was driven by benefit changes.
“Eighty-four percent of the pension funding gap occurred because the City of Springfield has been allowed to rely on its own investment income projections for years. Those projections did not take into account investment income shortfalls, such as we experienced in the last 18 months.
“As a result, the unfunded liability for firefighter pensions in the City of Springfield jumped from $39.4 million in 2004 to $89.3 million in just four years. All the while, Springfield firefighters consistently contributed 9.445 percent of their salary to their pension fund.
“It is not honest for politicians to suggest that pension benefit increases have caused the problem. It shifts attention from the real problem: too many local governments have diverted employer pension contributions to pay for local government services that do not improve public safety.”
