Tisdahl Shows State Committee How Evanston Solved Underfunded Pension Problem

Evanston Mayor Elizabeth Tisdahl praised what she called the state of Illinois’ “holistic approach” to its continued pension problems as she addressed the Illinois House of Representative’s House Pension Committee on the topic of pension reform in Springfield Wednesday morning.

Tisdahl explained the steps the City took several years ago to address its underfunded police and firefighters pension.

In 2007-08, the city’s police and fire pension funds were underfunded by $145.8 million when a committee was formed to address the situation. They first made “one-time payments when funds were available above the minimum Actuarially Required Contribution” and “adjusted actuarial assumptions through a joint committee” comprised of the City Treasurer, both Pension Board Presidents and the Actuary.

“By 2008, the police and fire tax levy was approximately $9 million and the pensions funded at 40%,” Tisdahl said. “In the following years, we made hard choices to increase contributions with budget cuts, including personnel and programs. As a result, we stabilized our contributions. These contributions have remained high, but stable.”

Over the last four years, the Mayor says, Evanston has contributed an additional $16 million above the state’s required contribution. In 2014, $14.8 million will go to the police and firefighter pension and the system will be funded at an estimated 49.9 percent.

“Evanston has worked hard to right its financial ship and continues to stabilize our contributions to ensure we provide the pension for the men and women who protect and serve our residents,” she said.

On the topic of Gov. Bruce Rauner’s pension proposal, Tisdahl said she agrees with “consolidating the over 640 individual public safety pension funds into IMRF.”

“(It) is a constitutional way to save taxpayers’ money and provide a more stable environment for the pensions of all public safety employees. Consolidation would increase investment returns, which reduces the burden on taxpayers,” she said. “We believe there is more opportunity to create additional economies of scale by further consolidating the individual pension boards and that should be considered in any additional proposals.”

Read Tisdahl’s full address to the committee here