Darien Taxpayers Spending More On Police Pensions

DARIEN, IL — Darien taxpayers are set to pay nearly $200,000 more into the police pension account this budget year than they did the previous year. The taxpayers' contribution will amount to almost $2.1 million, up from $1.9 million the year before.

This trend reflects what is going on in most Illinois towns. Thirteen 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 13 years, it would now be a little above $1 million.

But 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.

At last week's City Council meeting, Jason Franken, the city's actuary, said it made sense to go for 100 percent. And he said state legislative proposals to extend the funding requirement to 2050 would do little to help.

"You will pay much more in interest over the last 10 years," Franken said.

Darien's treasurer, Michael Coren, said he has recommended going for the 100 percent by 2040 since he became treasurer 13 years ago. Doing otherwise, he said, would be "kicking the can" down the road, as he said the state often does with its pension funds.

Franken said the police pension fund's investments only gained by 1.3 percent in the budget year ending April 30, lower than the expected 7 percent. That was the result of the pandemic-caused plunge in the stock market, he said. This decline will further increase taxpayers' contributions in later years, Franken said.

Another reason for this year's increase was the enactment of greater benefits for pension members who joined 2011 or later. These adjustments were a part of legislation for the phased-in consolidation of municipal police pension funds. The newer members — known as Tier 2 — get fewer benefits than their older counterparts.

Taxpayers contributions come through their property taxes.

Check how much Darien pays for bureaucracy for its police pension fund:

Bureaucratic Costs For Darien Pensions?