SPRINGFIELD, Ill. (AP) – The Illinois House has approved Gov. J.B. Pritzker’s plan to consolidate hundreds of local pension programs covering police officers and firefighters to boost investment returns and save administrative costs.
The plan by Democratic Rep. Jay Hoffman of Swansea was OK’d 96-14. It would create two statewide pension accounts – police and fire – out of nearly 650 municipal plans. Combined the two funds would have $15 billion in assets. Democrat Pritzker said the greater investment power could generate an additional $2.5 billion over the first five years.
Hoffman said the plan would reduce costs on local governments struggling to fully fund pensions while paying for city services.
“This would result in, I believe, an increase in the investment income, substantially, by using economies of scale, by putting the resources and assets together — police and fire funds — and by making investments that are prudent,” Hoffman said.
Rep. Robyn Gabel said this will be a relief to local governments struggling to fund pensions.
“Every year they tell me this is one of their major concerns,” she said.
“This bill will allow them to both reduce their administrative costs and increase the money they earn in their pension investments.”
The legislation moves to the Senate with one day left in the Legislature’s fall session.
