August 26, 2016
To the Honorable
The Illinois Senate,
99th General Assembly:
I return Senate Bill 440, an amendment to the Illinois Pension Code, with
specific recommendations for change.
bill would make several changes to pension benefits for Chicago police officers
and firefighters. The bill would expand eligibility for death benefits for Tier
2 retirees. The bill would ensure that widows or surviving spouses are paid a
minimum annuity. The bill would also increase the annual cost-of-living
adjustment (COLA) from 1.5% to 3.0% for retirees born between 1955 and 1965.
Our heroic first responders and their families sacrifice a lot to serve their
communities, and they deserve retirement benefits commensurate with that service.
I thank the sponsors of this bill, who have been forceful advocates for our
police officers and firefighters and their families.
COLA rate is frequently increased, one cohort of retirees at a time. First
responders anticipate this increase. Unfortunately, the City pension systems calculate
their financial obligations based on current law; so even though the increase
is anticipated, it is not accounted for. For this reason, the City of Chicago
and its pension systems opposed the bill.
support many of the changes in Senate Bill 440, despite that opposition. I am
returning the bill, however, to enable further consideration of the COLA rate,
which should be considered in the context of broader pension reform. If we
expect retirees to benefit from a COLA rate greater than 1.5%, then the City’s
financial disclosures should transparently reflect that expectation, and the
City should identify resources to account for that additional liability.
Otherwise the City is short-changing its contributions to the police and fire
pension funds. Meaningful pension reform will enable us to provide good
retirement benefits to our first responders, while giving certainty to the
City, taxpayers, and retirees alike.
pursuant to Section 9(e) of Article IV of the Illinois Constitution of 1970, I
hereby return Senate Bill 440, entitled “AN ACT concerning public employee
benefits”, with the following specific recommendations for change:
On page 8, by replacing line 12 with “January
1, 1955) or over on that anniversary date, or upon”; and
On page 8, by replacing line 14 with “55 if
born before January 1, 1955) if it occurs after the”; and
On page 9, by replacing lines 2 through 4 with
“but before January 1, 1955, such increases shall be 3% and such policemen
On page 10, by deleting lines 10 through 21;
On page 25, by replacing lines 14 and 15 with
“to Sections 5-153, 5-155, 5-167.1, 5-169, and 5-170”; and
On page 25, by replacing lines 21 and 22 with “(e)
The changes to Sections 5-153, 5-155, 5-163, 5-167.1,”; and
On page 31, by replacing line 12 with “1955)
or over on that anniversary date, or upon the first”; and
On page 31, by replacing line 14 with “before
January 1, 1955) if that occurs after the first”; and
On page 31, by replacing line 25 with “before January
1, 1955,”; and
On page 32, by replacing lines 1 and 2 with “such
increases shall be 3% and such firemen shall not be”; and
On page 32, by deleting lines 25 and 26; and
On page 33, by deleting lines 1 through 10;
On page 44, by replacing lines 18 and 19 with
“to Sections 6-150, 6-158, 6-164, 6-166, and 6-167 made by this”; and
On page 44, by replacing lines 25 and 26 with “(e)
The changes to Sections 6-150, 6-158, 6-164, 6-166, and”.
With these changes, Senate Bill 440 will have
my approval. I respectfully request your concurrence.