PENSION REFORM UPDATE

Transcription

1 THE RETIREMENT BOARD of the FIREMEN S ANNUITY AND BENEFIT FUND OF CHICAGO Suite S. Clark Street Chicago, IL (312) Fax (312) Marshall Line (800) ELECTED TRUSTEES MICHAEL J. SHANAHAN, President ANTHONY R. MARTIN, Secretary TIMOTHY J. McPHILLIPS, Active Trustee DANIEL A. FORTUNA, Annuitant Member EX-OFFICIO TRUSTEES First Deputy Fire Commissioner, CHARLES STEWART III, Vice-President City Treasurer, KURT A. SUMMERS JR. City Comptroller, DANIEL WIDAWSKY City Clerk, SUSANA MENDOZA September 22, 2015 In addition to the benefits granted to members and spouses each month, the Secretary will also be presenting, for informational purposes only, items of interest that may affect our members. Questions regarding any member s specific situation should be addressed directly to the Fund Office. MONTHLY NEWS AND INFORMATION FROM THE FUND SECRETARY FIREMEN S ANNUITY AND BENEFIT FUND OF CHICAGO PENSION REFORM UPDATE The Firemen s Annuity and Benefit Fund of Chicago ( FABF ) Summer 2015 Pension News summarized the many developments with respect to potential legislative and litigation solutions to solve the underfunding to the State and City of Chicago retirement systems. Recently, new legislation was proposed which, if enacted, would specifically impact the FABF and its current, retired and future participants. On July 8, 2015, Governor Bruce Rauner introduced a 500 page pension reform bill that incorporates many provisions of Cook County Board President Toni Preckwinkle s previously proposed pension reform bill and Senate Bill 777 applicable to the police and fire pension retirement funds while also incorporating new provisions prohibiting state-worker unions from collective bargaining on issues such as wages and overtime. Governor Rauner s proposed pension reform bill has yet to be introduced in the General Assembly and there is no clear timeline for its introduction in light of the current stalemate over the State budget. Many speculate that if, and when, Governor Rauner s proposed pension reform bill becomes law, the parameters of the bill and its application as to the FABF and its participants and other pension plans likely will be resolved in the courts, similar to other recent pension reform legislation. Governor Rauner s Proposed Bill s Similarities to Senate Bill 777 Governor Rauner s proposed pension reform bill incorporates many provisions of Senate Bill 777, which was passed by both houses of the General Assembly on May 31, As discussed in the Summer 2015 Pension News, if Senate Bill 777 is signed by the Governor, it would significantly alter employer contributions to the Chicago Police and Fire retirement systems. Governor Rauner s proposed pension reform bill mirrors Senate Bill 777 in that it proposes changes to the minimum retirement annuity payable to any person retiring from service at age 50 or over with 20 or more years of service to no less than 125% of the Federal Poverty Level. Currently, the minimum retirement annuity payable to any person retiring from service at age 50 or over with 20 or more years of service is $1,050 per month. 40 ILCS 5/ Secondly, Governor Rauner s proposed pension reform bill changes the FABF funding schedule

2 from the current target of 90% funding by year 2040 to 90% funding by year 2055, including a 5 year period from where mandatory payments by the City of Chicago are set by statute (for 2016, $199,000,000; for 2017, $208,000,000; for 2018, $227,000,000; for 2019, $235,000,000; and for 2020, $245,000,000). 40 ILCS 5/ Governor Rauner s proposed legislation also gives the FABF the legal right to pursue a mandamus action in the Circuit Court of Cook County to compel the City of Chicago to make the required payment. The proposed pension reform bill introduced by Governor Rauner also mirrors Senate Bill 777 by mandating that any proceeds received by the City of Chicago in relation to the operation of a casino be used for payment to the FABF to satisfy the City s contribution. Governor Rauner proposes a Tier 3 for Firefighters and Paramedics Unlike Senate Bill 777, Governor Rauner s proposed pension reform bill creates a new tier of benefits, Tier 3, for public safety employees entering service after January 1, Governor Rauner s plan includes certain modifications to benefits which are currently incorporated in Tier 2 for firefighters hired on or after January 01, The new Tier 3 hybrid plan incorporates portions of defined contribution and defined benefits plans and allows for benefits to be modified prospectively for all firemen entering service after January 1, The Tier 3 employees will be required to contribute 5½% of each payment of salary toward their retirement annuity and their retirement annuity will be calculated at 1 ½% of the final average salary (average of the highest 96 consecutive months of pensionable salary out of the last 10 years of pensionable salary) for each year of pensionable service credit. Governor Rauner s proposed Tier 3 plan also changes the age and service requirements at which a firefighter would be eligible to collect his retirement annuity. Currently, Tier 1 requires that a firefighter be age 50 with 20 years of service in order to receive a pension of 50% of pensionable salary based on the highest 4 years of service over the past 10 years. Tier 2 requires that a firefighter have 10 years of service and be age 55 in order to receive an unreduced minimum annuity equal to 25% of pensionable salary averaged over 8 years. Governor Rauner s proposed pension reform bill has three (3) layers of age and service requirements: 1. Age 55 with at least 30 years of service credit (resulting in a minimum benefit equal to 45% of pensionable salary averaged over 8 years), 2. Age 60 with at least 20 years of service credit (resulting in a minimum benefit equal to 30% of pensionable salary averaged over 8 years), and 3. Age 65 with at least 5 years of service credit (resulting in a minimum benefit equal to 7.5% of average pensionable salary). In addition to changes in how and when a participant s benefits are calculated, Governor Rauner s proposal expands upon the pensionable earnings cap instituted in Tier 2. Currently, Tier 2 caps the amount of a firefighter s pension contributions and salary based on the Social Security wage base with subsequent increases in this wage base being the lower of 3% or ½ the Consumer Price Index. Governor Rauner s Tier 3 proposal caps pension contributions, pensionable salary, and subsequent increases to these directly to the Social Security wage base.

3 Governor Rauner s Recommendations to Alter The Public Labor Relations Act and Limit Collective Bargaining Additionally, Governor Rauner s proposed pension reform bill also modifies the Illinois Public Labor Relations Act in specifically prohibiting collective bargaining over employee pensions, wages and fringe benefits, hours of work and shift schedules and matters of employee tenure. In addition, the modifications to the Illinois Public Labor Relations Act include prohibitions on paying employees for overtime work unless specifically required by the federal Fair Labor Standards Act, prohibiting an employee from accruing more than 10 days of vacation per year and limiting the amount of sick days per year. Public Safety Employee Benefits Act Lastly, Governor Rauner s pension reform bill modifies the definition of a catastrophic injury in Public Safety Employee Benefits Act (820 ILCS 320/10 et seq) to provide health coverage benefits from an employer who employs a full-time public safety officer who suffers a catastrophic injury in the line of duty. The new definition of a catastrophic injury includes a grievous or serious injury or impairment of a nature that is sufficient to permanently preclude the injured employee form performing any gainful work. 820 ILCS 320/10. Thank you. Anthony R. Martin Fund Secretary REQUIRED DISCLAIMER The information set forth herein is believed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of the Firemen s Annuity & Benefit Fund of Chicago, the Retirement Board (the Board ) or any member of the Board except the Secretary. The information and expressions of opinion contained herein are subject to change without notice. All expressions of opinion, whether or not expressly so stated, are intended merely as such and not as representations of fact. Financial information contained in this newsletter is as of a certain date, is unaudited and should not be relied on.

4 09/18/2015 Page 1 THE RETIREMENT BOARD of the FIREMEN'S ANNUITY & BENEFIT FUND OF CHICAGO Suite South Clark Street Chicago, IL (312) (voice) (312) (fax) Marshall Line (800) ELECTED OFFICIALS ANTHONY MARTIN, Secretary TIMOTHY McPHILLIPS MICHAEL SHANAHAN, President DANIEL A FORTUNA, Annuitant Member EX-OFFICIO TRUSTEES First Deputy Fire Commissioner, CHARLES STEWART III, Vice-President City Treasurer, KURT A SUMMERS JR City Comptroller, DANIEL WIDAWSKY City Clerk, SUSANA MENDOZA To All Members: * PLEASE POST * * PLEASE POST * * PLEASE POST * * PLEASE POST * Listed below are the names of individuals who have applied for a 75% Duty Disability benefit from the Pension Board. Their applications will be presented before this Board at the 10/21/2015 meeting. Rank, Name, Assignment: PM LEAH M SIWINSKI, AMBULANCE 14 Date of Injury: Please contact the Pension Fund's Secretary, in writing, using the attached form, if you have any information could assist the Board in its investigation of whether or not it should grant a 75% disability benefit to any of the above individuals. The Board can subpoena witnesses (Illinois Revised Statutes, Article 6-189) and compel them to attend and before it upon any matter concerning the Fund. Your cooperation will help maintain the integrity of this Fund. NAME ADDRESS PHONE COMPANY ASSIGNMENT NAME OF APPLICANT NAME(S) OF WITNESS(ES) FORWARD TO: Secretary Firemen's Annuity & Benefit Fund 20 South Clark Street, Suite 1400 Chicago, IL Anthony Martin Secretary

5 09/18/2015 Page 2 MINIMUM FORMULA ANNUITIES: KEVIN G BUTZEN, LIEUTENANT, ENGINE 59 Ent CFD: 07/16/1986 $6, beginning 08/06/2015 Retired: 08/06/2015 based on 75% of Final Average Salary $ annuity increment, 1.5%, begins 09/01/2016 last one on 01/01/ JOHN G CURRY, FIREFIGHTER, ENGINE 81 Ent CFD: 12/01/1994 $3, beginning 08/16/2015 Retired: 08/16/2015 based on 52.5% of Final Average Salary $57.65 annuity increment, 1.5%, begins 08/01/2024 last one on 01/01/2043 REFUND $26, FOR SPOUSE CONTRIBUTIONS EDWARD DAVIS, EMT FIREFIGHTER, AIR/MASK Ent CFD: 05/01/1990 $5, beginning 08/30/2015 Retired: 08/30/2015 based on 65% of Final Average Salary $ annuity increment, 3%, begins 09/01/2016 REFUND $78.60 FOR 2000 & 2006 EID GARRETT M FLAVIN, FIREFIGHTER PARAMEDIC (PER ARBITRATORS AWARD), ENGINE 64 Ent CFD: 07/18/1988 $6, beginning 09/17/2015 Retired: 09/17/2015 based on 70% of Final Average Salary $92.94 annuity increment, 1.5%, begins 09/01/2023 last one on 01/01/ FRANCIS R MCCANN, EMT CAPTAIN, ENGINE 49 Ent CFD: 01/02/1980 $8, beginning 08/06/2015 Retired: 08/06/2015 based on 75% of Final Average Salary $ annuity increment, 3%, begins 09/01/2016

6 09/18/2015 Page 3 WIDOW'S ANNUITIES: ANN T BELLAIR, widow of WILLIAM F BELLAIR, Retired since 10/02/1998. Ent CFD: 09/19/1955 $3, beginning 08/05/2015 Deceased: 08/04/ MARY ANNE DEMPSEY, widow of ROBERT M DEMPSEY, Retired since 10/16/1995. Ent CFD: 07/01/1961 $3, beginning 07/27/2015 Deceased: 07/26/ ELFRIEDA ELLISON, widow of CLARENCE E ELLISON, Retired since 11/30/2004. Ent CFD: 05/01/1966 $3, beginning 08/15/2015 Deceased: 08/14/2015

7 09/18/2015 Page 4 REFUNDS: SEAN D RAGUSA, PARAMEDIC IN CHARGE, AMBULANCE 34 Ent CFD: 04/03/2006 $66, Refund of Contributions RESIGNATION 08/10/ TERRELL AKONS, EMT FIREFIGHTER, ENGINE 103 Ent CFD: 06/01/1999 $88, Refund of Unpaid Contributions in Account of Deceased FF to ESTATE OF TERRELL AKONS, ANGELA LOGAN, PERSONAL REPRESENTATIVE Deceased: 09/08/2013

8 09/18/2015 Page 5 DEATH BENEFITS: RICHARD D CORR, FIREFIGHTER, ENGINE 28, Retired since 06/13/1993. Ent CFD: 07/16/1965 $6, to LAURA A WEST, DAUGHTER Deceased: 07/31/ ROBERT M DEMPSEY, CAPTAIN, ENGINE 127, Retired since 10/16/1995. Ent CFD: 07/01/1961 $6, to MARY ANNE DEMPSEY, WIFE Deceased: 07/25/ CLARENCE E ELLISON, CAPTAIN, FPB-HEADQUARTERS, Retired since 11/30/2004. Ent CFD: 05/01/1966 $6, to ELFRIEDA ELLISON, WIFE Deceased: 08/13/ WILLIAM S STAHLMAN, FIREFIGHTER, TRUCK 35, Retired since 11/03/1985. Ent CFD: 10/01/1952 $6, to CHERYL JOHNSON, DAUGHTER Deceased: 07/22/2015

9 09/18/2015 Page 6 BENEFIT RECALCULATIONS: FRANK C DE MARCO, EMT FIRE ENGINEER, ENGINE 65, Retired since 05/05/2015. EID Recalculation $52.01 Refund for ND QTR DAP DOUGLAS A KEAG, EMT FIRE ENGINEER, 3RD DISTRICT RELIEF, Retired since 12/26/2014. EID Recalculation $52.01 Collect for TH QTR DAP MICHELLE R TOOMEY, Widow of EDWARD P. TOOMEY. EID Recalculation $52.01 Collect for ND QTR DAP

10 09/18/2015 Page 7 HEARINGS: THE FOLLOWING APPLICATION FOR OCCUPATIONAL DISEASE DISABILITY WAS GRANTED: DAVID S PHALIN, LIEUTENANT PARAMEDIC, TOWER LADDER 5 Ent CFD: 02/04/1980 $6, beginning 08/12/2015 $30.00 a month for 1 minor child, AIDAN P The vote was: Yeas: FORTUNA MARTIN MENDOZA SHANAHAN SUMMERS JR WIDAWSKY Nays: (None) Not Present: McPHILLIPS STEWART III THE FOLLOWING APPLICATION FOR DUTY DISABILITY WAS GRANTED: WILLIAM P OBOYLE, FIREFIGHTER, SQUAD 5 Ent CFD: 05/16/1996 $5, beginning 08/09/2015 $30.00 a month for 3 minor children, WILLIAM THOMAS, QUINN PATRICK, TESSA ROSE The vote was: Yeas: FORTUNA MARTIN MENDOZA SHANAHAN SUMMERS JR Nays: (None) Abstain: WIDAWSKY Not Present: McPHILLIPS STEWART III THE FOLLOWING APPLICATION FOR ORDINARY DISABILITY WAS GRANTED: HOWARD W LYON, FIREFIGHTER PARAMEDIC (PER ARBITRATORS AWARD), ENGINE 10 Ent CFD: 06/17/1996 $3, beginning 07/31/2015 The vote was: Yeas: FORTUNA MARTIN MENDOZA SHANAHAN SUMMERS JR Nays: (None) Not Available: WIDAWSKY Not Present: McPHILLIPS STEWART III THE FOLLOWING APPLICATION FOR OCCUPATIONAL DISEASE DISABILITY WAS WITHDRAWN: GARRETT M FLAVIN, FIREFIGHTER PARAMEDIC (PER ARBITRATORS AWARD), ENGINE 64

11 09/18/2015 Page 8 The following annuitants have passed away since the last regular meeting of the Board: CLARENCE E ELLISON Annuity Died 08/14/2015 KATHRYN COLLINS Widow's Annuity Died 08/09/2015 MARY J DONNELLY Comp Widow's Annuity Died 08/05/2015 RUDOLPH V ALLEGRUCCI Annuity Died 08/21/2015 BETTY C JAEGER Widow's Annuity Died 08/13/2015 HELEN E BOROWSKI Widow's Annuity Died 07/10/2015 PATRICIA J MAGUIRE Widow's Annuity Died 08/28/2015 DONNA A VANPELT Widow's Annuity Died 08/28/2015 PATRICK J OTOOLE Annuity Died 09/06/2015 RUSSELL A CANGELOSI Annuity Died 09/09/2015 EMILY TORTORELLO Widow's Annuity Died 09/06/2015

12 09/18/2015 Page 9 ANNUITIES GRANTED Resigned From: Month: Year to Date: Active Duty 5 61 Duty Disability 0 6 Occupational Disease Disability 0 4 Ordinary Disability 0 0 Total Minimum Formula Annuities Granted 5 71 Total Earned Annuities Granted 0 0 Total Annuities Granted 5 71 DISABILITIES GRANTED Type: Month: Year to Date: Duty Disability 1 12 Occupational Disease Disability 1 10 Ordinary Disability 1 2 Total Disabilities Granted 3 24 Total Disabilities Denied 0 0 WIDOW'S ANNUITIES GRANTED Type: Month: Year to Date: Regular Widow's Annuity 3 45 Compensation Widow's Annuity 0 0 Total Widow's Annuities Granted 3 45 CHILD'S ANNUITIES GRANTED Type: Month: Year to Date: Full Child's Annuity 0 0 Child of Duty Death Annuity 0 0 Child of Ordinary Death Annuity 0 4 Total Children Annuities Granted 0 4

13 EMWQ RETIREES, WIDOWS, AND CHILDREN ASSISTANCE FUND GIFT FUND DONATIONS RECEIVED August 31, 2015 Engine 18 Movie Night $ Robert & Nancy Twardak In memory of Ruth Egan Retiree Payroll Deductions Oak Lawn Bank & Trust On behalf of John Chickerillo Active Member Payroll Deductions Richard & Margaret Bouse In memory of Bill Bellair Charlene Kieras In memory of Nancy Toth Chicago Fellowship of Christian Firefighters Donations Made via Pay Pal: Donald Stifter Mary Rose McNamee Sheila Sevier Anthony Martin, EMWQ President, would like to thank the following new participants in the City of Chicago Charitable Organization payroll deductions: Michael Hogan Bernard McGuire Jessica Campagna William Schuenecker Louis Marolda Greg Schaffraths Terrance Butler Jeff Iwema Michelle Slisz Thomas Minnick John Fitzpatrick Rogelio Guzman John Coffman Juan Sotomayor Wayne Grooms Richard Pizza Patrick Hayes Vincent Chisesi Brandon Singleton Jesus Rangel Patrick Heneghan Erik Steinmetz Victor LeGodut Michael Bueschel Daniel Galeher Silvi Lemmon Joseph Scardino Cornell Myatt Anthony Pecoraro Jeffrey Hennessy Rich Wyman Gary Kendall Kevin O Malley John King Robert Kraak Matthew McManus Mercedes Nowinski Shaun Peebles Francesco Paolucci Ruben Quiles Vanessa Grazzini Brian O Sullivan Michael Salbego Rey Wilder Crystal Billings Ozzie Moran Joshua Boyer Chris Moffitt Ken Davis Herbert Williams Grady Clark James Skawski David DeVries Brian Zega Mary Youngren Daniel Larkin Fredrick Ford Matthew Leyva Kenia Chavez Lisa Robinson Steven Ladicky Richard Wood William Carletem Donna Ruch Sheila Howell Nicole Marriner