FAQ on Village Employee Pensions

1.) Why can't the Village of Lombard reduce its pension cost?
Elected officials at the local level have no say on pensions.  The State Legislature sets pension benefit levels for all employees of local governments, even though it is the local governments that have to fund those pensions.  Furthermore, in 2015 the Illinois Supreme Court ruled that the state constitution protects pensions from being “diminished or impaired.”  This means that once an individual begins work and becomes a member of a public retirement system, any changes made to that retirement system cannot be applied to employees already in that system, and would only apply to new employees.  There is no doubt that pension costs are a strain on municipal finances, and are a major reason that Lombard budget changes were needed. Any changes to this system will require approval by the State Legislature, the Governor, and the Illinois Supreme Court. 

2.) What types of pensions do Village of Lombard employees receive?
Per Illinois State Statutes:  All full-time and some part-time employees of the Village fall into one of the defined benefit plans listed below. (Click the links below to learn more about each pension plan fund.) A defined benefit pension plan is a type of pension plan in which an employer promises a specified pension payment based upon a formula that covers the final rate of earnings and years of service.
    1. Illinois Municipal Retirement Fund (IMRF covers employees who work over 1000 hours per year.) 
    2. Police Pension Fund (covers all sworn Police officers)
    3. Firefighters Pension Fund (covers all sworn Firefighters)
3.) What do the Village's Pension Plans include?
Benefits are guaranteed by the Illinois Constitution and can only be changed prospectively by the Illinois legislature for new members.  The Illinois State legislature passed legislation effective in 2011 regarding pension reform.  They created a Tier 2 plan for IMRF, Police Pension, and Firefighters Pension Funds to help reduce future pension costs (see charts below). 

Copy of Pension Fund FAQ