Naperville –– With state representatives, including Grant Wehrli, and Senator Mike Connelly, who were sponsors of the bill, Gov Rauner on Thursday signed HB-418, which wil prohibit law enforcement officers, serving as Chiefs of Police, from collecting their pension until they actually retire.
Until now, a law enforcement officer could leave one police department, and start collecting his pension benefit, then take a new job with a different department and begin accruing pension benefits from that second job.
Now, a law enforcement officer that opts to take a new position, after “retiring” from a department, can only get a “defined contribution” retirement plan from that second job, and not the traditional pension that pays a “defined benefit.”
The bill is intended to help local municipalities control the cost of their pension obligations, which are squeezing city budgets across the state. Earlier this spring, one mayor told the Capitol press corps, that the hiring of a police officer wasn’t a decision that was based on paying $70,000 a year, but was a $2,000,000 decision, based on what the officer would likely be drawing in pension benefits over the course of their lifetime.
Now if an officer opts to take a second job with a different police department, after they’ve secured a pension benefit from their original employer, the officer can enroll in a 401-K style retirement plan, where benefits are based on how much money is contributed and earned in the market over time. But they are prohibited from enrolling in another traditional pension plan, whose benefits may far exceed the earnings based on what was contributed by the officer and their employer. These excess benefits are paid by pulling money out of a city’s tax revenues, which then limits what funds are available to go to standard operating costs of the city, such as road maintenance, city parks, or to upgrade equipment in police and fire departments.
Rep Wehrli said his bill now only applies to Chiefs of Police, but he intends to offer similar language to apply to additional public service emplyees. He said this new law was tightly structured to comply with the Supreme Court’s affirmation that pensions once gained cannot be diminished, in accordance with the state’s constitution.