Galesburg City Council got a presentation on Monday night regarding the city’s police and fire pensions.
Kevin Cavanaugh with Lauterbach and Amen, an accounting firm based out of Naperville, says that collectively both of the pensions are about 49 percent funded.
He says that compares to the average Illinois city that is 55 to 60 percent funded.
It would cost $64 million for the city to fully fund its police and fire pensions today.
Cavanaugh says his firm is recommending an increase of 6.2 percent for fire pensions and 6.8 percent for police pensions over last year.
The actuary recommended amount sets a target for the pensions to be fully funded in 14 years, while the state minimum sets a target for 90 percent funded in 17 years.
Cavanaugh says the primary driver of this large recommended increase was poor investment returns in calendar-year 2022.
This was common among Illinois municipal pension funds he said, with an average return rate of negative 15 percent.
He explains that the investments are far out of the control of the City Council since police and fire pensions in Illinois were consolidated in 2019.
What the city can control is how much they put into the funds and in FY22 they contributed 127 percent of what the actuarily recommended amount was.
City Finance Director Gloria Osborn says IMRF, the retirement fund used by most other city employees, is nearly fully funded.
Council does have a financial policy in place that if they have a budget surplus at the end of the year, then excess dollars go toward pensions.
