Darien Police Pensions? Actually, A Good Year

DARIEN, IL — Officials in Darien and virtually all Illinois towns are used to getting bad news on police pensions. That did not happen this week with the Darien City Council, thanks largely to a quickly expanding stock market.

The police pension fund's investments grew by about 25 percent in the fiscal year ending April 30. The benefit of those returns will be spread over five years, a way to smooth out the ups and downs of the market.

The high investment return was far more than the 7 percent assumption for the last fiscal year, the village's actuary, Jason Franken, told the council.

Typically, Darien and most Illinois towns are advised to make big increases in property taxpayers' contributions to their police pension funds. But because of the big gains, this year's suggested hike is only $17,000 more, to $2,114,355, or less than 1 percent. That's less than the rate of inflation.

The previous year, Darien taxpayers were slated to pay nearly $200,000 more into the police pension account. Fourteen years ago, according to the city, the taxpayers' annual payment into the pension fund was about $800,000, less than 40 percent of what it is now.

If the taxpayers' contribution to the pension fund had gone up with inflation over the last 14 years, it would now be about $1.1 million.

As of May 1, the Darien police pension fund counted 30 beneficiaries, three more than the previous year. The active officers paying into the pension fund increased by one, to 34.

"The primary source of unfavorable experience was more retirements that expected," Franken's report said.

In Illinois, pension costs go up quickly. A big reason for the increase in costs is the guaranteed annual 3 percent compounded increase for pension recipients. At that rate, recipients see pay hikes more than the rate of inflation.

The state is requiring towns pay into their police pension funds at a rate that they will be 90 percent funded by 2040.

But Darien has been aiming for 100 percent in that year. As of May, it was funded at 59.2 percent, up from 57.6 percent the previous year, according to the latest report.