HB3827 will also require pension boards to refer suspected fraud cases to law enforcement
In a speech at the City Club of Chicago this afternoon, Illinois House Republican Leader Tom Cross announced that he filed a bill today that will help give more accountability to taxpayers by reconstituting the City of Chicago and Cook County pension boards. The bill, which will be sponsored by Senator Matt Murphy (R-Palatine) in the Senate, will also require pension boards statewide to refer any suspected fraud to the local authorities.
“Recent media reports have unveiled abuses in the Chicago Pension Funds that were not reported to the proper authorities for punishment or investigation. We believe these matters should have and still should be reported to law enforcement. We mandate that in our bill,” said Cross. “We also believe the pension boards in the City of Chicago and Cook County need a fresh start—that’s why we are seeking reconstitution.”
In recent weeks, the Chicago Tribune and WGN have reported numerous pension abuses, including when the Chicago Municipal Employees’ Pension Fund allowed four members of the fund to keep their pensions after they falsified documents regarding pension eligibility.
“These practices can’t continue—we owe it to the taxpayers to make sure that we are spending their money wisely. This is far from wise—we believe it could be criminal in some of these cases. That’s why we are putting stronger language into state law to reflect the seriousness of these issues and reports,” added Murphy.
House Bill 3827 will amend the Illinois Pension Code to state that if any board member or employee of any retirement system or pension fund created under the Pension Code or the Illinois State Board of Investment has reasonable suspicion to believe that fraud is being committed or has been committed, then that individual shall either notify the board or the State’s Attorney of the county having jurisdiction of the alleged fraudulent activity.
“We are also putting in the legislation that if a board, fund member or employee fails to report apparent fraud he or she can be held liable for repaying any losses to the fund that occurred as a result of the breach, and/or be removed from his or her position,” said Cross.
“The legislation being proposed will create a fresh start with regards to the city and county pension fund boards by ensuring the members are held accountable to the taxpayers through the appointees of the mayor and Cook County Board President,” said Murphy.
The numerous boards of the City of Chicago Pension Funds will be standardized and have seven members. All current board members’ terms will expire and going forward the board will consist of four Mayoral appointees who are not members of the fund or elected officials, two elected active members and one elected annuitant member.
The board of the Cook County Pension Fund will also be reconstituted. The new board will be made up of nine members, including five appointees of the County President who are not members of the fund or elected officials, along with two elected active members and two annuitant members. (Please see the attached chart for a current versus proposal comparison).
The scandals associated with the boards of the State Pension Systems during Governor Blagojevich’s tenure prompted the General Assembly to enact similar reforms in 2009. Public Act 96-6 reconstituted the boards of the State Pension System by giving the Governor more appointments and allowing the current appointments to expire.
Cross and Murphy plan to move on this legislation during the upcoming veto session, as well as House Bill 3813, which was filed last month. HB 3813 will repeal a portion of a law passed in 1991 that allowed city employees to retire with a city pension that was based on their much higher union salary. HB 3813 will only allow union officials to accept a city pension based on their city salary when they left service.
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Tom Cross is a Republican member of the Illinois House of Representatives, representing the 84th district where he has served since 1993. He is currently the House Republican Leader.
Matt Murphy is a Republican Illinois State Senator, representing the 27th district since 2007. The district includes parts of Arlington Heights, Barrington, Buffalo Grove, Inverness, Palatine, Wheeling, Prospect Heights and South Barrington.