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Illinois Supreme Court upholds consolidation of police and fire pensions

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(The Center Square) – The Illinois Supreme Court unanimously ruled combining local firefighter and police pension funds is constitutional.

In 2019, Gov. J.B. Pritzker enacted a measure consolidating about 650 first responder pension funds into a fund for police and a separate one for firefighters. On Friday, the state’s highest court unanimously ruled this move was constitutional, despite pushback from others.

The pushback came from several local police and fire pension officials who filed a lawsuit against Pritzker, claiming the consolidation was unconstitutional. On Friday, the state’s highest court ruled in favor of the consolidation.

“Under the Act, each local fund retains a separate account in the respective statewide fund. Those assets are dedicated solely to paying benefits to the local fund’s members and to covering operating expenses,” the opinion reads. “For the foregoing reasons, we affirm the judgment of the appellate court affirming the circuit court’s order granting summary judgment in defendants’ favor and against plaintiffs.”

Pritzker praised the decision.

“The Illinois Supreme Court upholding the constitutionality of this landmark, bi-partisan pension reform law today is confirmation that smart, thoughtful pension reform can be accomplished in Illinois,” Pritzker said in a statement. “After 70 years of attempts, my partners in the General Assembly and I were able to accomplish meaningful reform during my first term in office.”

Sheila Weinberg of Truth in Accounting said the consolidation brings the pension funds together for more control over investments.

“It consolidates their investments so that one entity is doing their investment planning and determines how things are invested,” Weinberg said. “Each city will still owe the same amount of debt, but it’s just a way the investments are managed.”

Increased returns from larger investments could be a benefit to the funds, Weinberg said.

“Local governments that have a tax cap can only raise so much money,” Weinberg said. “They usually cannot seem to raise enough money to fund the benefits that the state legislature has decided that the police and fire are owed.”

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