The city of Woodstock’s payments to its police pension fund have increased more than 60 percent since 2007, prompting some city officials to question the state’s formula for funding police pensions.
The city will contribute $1,153,597 to the pension fund for retired Woodstock police officers this year, a jump of $448,913 since 2007, when the city paid $704,684 to the fund.
“This is a fair question, to say, ‘Is this a model that we can continue to operate under in a thriving economy?’” Councilman Mike Turner said during an Oct. 4 City Council meeting, when the council was presented with a report on the pension fund.
Arguing for pension reform is difficult, Turner said, because of the perception that politicians who do so are trying to short-change police officers.
“The politics of this is that if you speak against this, you are speaking against cops,” Turner said. “That’s a false premise, although I think it would be framed that way by somebody who didn’t agree with a critique of this particular model.”
Like all Illinois municipalities with police pensions, the city levies a property tax to help pay for those retirement benefits. This year, about 12.5 percent of the city’s $9.2 million total property tax levy — not including Tax Increment Financing District revenue — will go to funding police pensions. Next year’s anticipated police pension levy of $1.4 million would increase its portion of the city’s property tax revenue to about 14.3 percent.
“This is a significant concern [for Illinois municipalities],” Mayor Brian Sager said. “… This is simply an unsustainable, impossible situation, and we’re going to find, unfortunately, many communities including the city of Woodstock that are going to be faced with increasing indebtedness relative to this fund.”
The 64 percent increase in city funding from 2007 to 2016 coincided with a 28 percent increase in employee contributions over the same period, from $236,864 to $302,301. Employees contribute 9.91 percent of their pay to the defined-benefit pension plan.
Most of the department’s police officers who retire after 30 years on the job receive pension checks equal to 75 percent of their final pay rate, with compounding annual increases, for the rest of their lives. Surviving spouses also are entitled to those benefits, although they do not collect annual increases.
Benefit levels are set by the state of Illinois, which requires municipalities of 5,000 or more to administer their own police pensions.
Many police officers retire when they’re in their 50s, according to Roscoe Stelford, city manager.
“The benefits system is too rich, there’s no doubt about it,” Stelford said following the meeting. “They’re able to retire too early, and we can argue about whether that’s appropriate, because of the job.”
Stelford and the city’s finance director, Paul Christensen, told The Independent they would support moving police pensions to something similar to the Illinois Municipal Retirement Fund, which pools pensions for municipal employees from throughout the entire state.
“I think it would be run as a more efficient system without giving less in return,” Christensen said, by taking advantage of “the economies of scale.”
But police union leaders oppose such a change to the retirement system.
“The way the law is set, it’s fair, because it requires a certain percentage from each party to put into the pension system,” said David Blanchette, communications director for the Illinois Fraternal Order of Police.
“We’re against [an IMRF-style pension system], mainly because it removes local control and places that control with the state,” Blanchette said. “As we’ve seen, the state has a very poor history of pension management.”