An audit shows that more than half of Illinois' 656 local pension funds for police and firefighters haven't been examined as frequently as state law requires even as some lawmakers want to allow for less frequent pension audits.
The Illinois Department of Insurance is required by state law to audit the state’s local police and firefighter pension funds once every three years. The Auditor General’s office released a report that shows officials didn’t perform required examinations of the 656 police and firefighters pension funds once every three years. More than half of them had only been audited once since 2004.
"We recommended the department perform the pension fund examinations every three years as required by the Code or continue to seek a legislative change," the audit concluded.
Truth in Accounting Research Director Bill Bergman said in this situation the state’s financial troubles and lack of resources are begetting more trouble.
"Maybe the main bottom line is the way the laws don’t matter in Illinois," he said, adding that lawmakers will often say "let’s just change the law, we can’t live up to it."
The pension funds are looked into by audits of their local municipalities, but it’s the state’s job to look into the pensions, Bergman said.
Many local police and fire pensions are underfunded, meaning they have much less money than what actuaries say they’ll need in the future to pay retired workers.
The audit said the problem has been recurring since 2012. Lawmakers are debating legislation that would allow the Department of Insurance to go five years without auditing the same pension fund twice.
The Illinois Municipal League has proposed plans to consolidate the state’s police and fire pensions in an effort to save money on administrative costs. Illinois Municipal League President Brad Cole said the report "shows the overall need for reform and consolidation of the current downstate public safety pension fund system."
The Department of Insurance didn’t respond to requests for comment on the audit findings, but the department did "accept" the results of the audit, saying it's pushing legislation that would relax that requirement.
Published under: Pension