The Shields Team

Ballots for the FOP elections are being mailed on February 4. We hope you vote for the Shields Team! This is who we are and what we stand for. Please take a moment to check us out!

Thursday, December 30, 2010

Pension Law Signed - What You Might Not Know

This is a great start for our funding. The City will be down in Springfield as soon as January to seek relief from this bill. They have five years to comply with the funding, which means five years to try and soften the funding.

The legislature has allowed a trailer bill to this bill. In this trailer bill, expect the City of Chicago to seek relief by changing several aspects of the original bill. They can have the 30 year amortization changed to 40 years to delay funding, they can increase employee contributions, or change the 90% mandate to 80% mandate of funding over 30 years. This is not good news for us and is something we MUST fight! 

Here is the Chicago Tribune article.

Below is the Fox news report.
Quinn Signs Pension Law; Daley Warns of "Massive" Tax Hike
Updated: Thursday, 30 Dec 2010, 9:40 PM CST
Published : Thursday, 30 Dec 2010, 7:48 PM CST
Jim Selle, Fox Chicago News
Chicago - Governor Pat Quinn has signed pension reform for police and firefighters into law, and Mayor Daley isn't happy about it.
The new law makes changes to pension requirements for law enforcement and fire personnel hired after January 1.  Among the changes:
-- A normal retirement age of 55, with early retirement at 50.
-- A maximum pension of 75% of salary.
-- A maximum pensionable salary of just under $107,000
Quinn says the law will protect "quality pension benefits that are also affordable for municipalities throughout the state."
But Mayor Daley claims the new law places a "tremendous burden on Chicago taxpayers."
Daley says the city's funding burden will almost triple, and a lot of that money is going to come from taxpayers.  The mayor accused Quinn of imposing "the largest tax increase in the history of Chicago."
Quinn spokesperson Ashley Cross disputes that.  She says the new law does not change current rules, which call for pensions to be funded by property taxes or any other legally available means.

Wednesday, December 29, 2010

FOP's "Truth" in Negotiating: How Your Union Didn't Fight for You

Do you think the FOP utilized all of its resources to intelligently negotiate the best deal they could for their officers? If you do, think again. We charted a timeline for this past contract negotiation regarding wages using such sources as the FOP website and newsletters, newspaper articles, as well as two prior arbitration decisions Arbitrator Benn awarded shortly before his FOP/City of Chicago decision.

The timeline is as follows:
  • June 28, 2008  Comparison of FOP and City of Chicago economic proposals as of June 28, 2008. This was taken from the FOP website and has since been removed. (Image of document at bottom)
  • January 27, 2009  Cover page of Arbitrator Benn's decision rendered against Illinois State Police Masters Sergeants. (Image of document at bottom)
  • January 27, 2009  Select paragraphs from the Illinois State Police Master Sergeants award, in which Arbitrator Benn states, "(T)here has never been a worse time for a union to find itself in the interest arbitration process." Arbitrator Benn ruled in favor of the state over the police union. (Image of document at bottom)
  • March 21, 2009  Chicago Sun-Times article, in which Mayor Daley pulls a 16.1% raise offer. The FOP was still seeking a 24% increase.
  • March 23, 2009  Cover page of Arbitrator Benn's decision for the Boone County's Sheriffs, rendered on March 23, 2009, two days after Mayor Daley pulled the 16.1% increase offer. (Image of document at bottom)
  • March 23, 2009  Select paragraphs of the Boone County Sheriffs' award, in which Arbitrator Benn states again, "there has never been a worse time for a union to find itself in the interest arbitration process." Again, Arbitrator Benn ruled in favor of the municipality over the police union regarding wages. (Image of document at bottom)
  • July 29, 2009  Chicago Tribune news article describing the the City of Chicago decision to initiate arbitration proceedings. After this date, the City and the FOP were offered three arbitrators. Despite his published decisions, the FOP agreed on Arbitrator Benn.
  • April 16, 2010  The union claims the 16.1% was contigient upon three unpaid furlough days. Such a claim is totally contradictory to the award issued by the arbitrator. Arbitrator's decision - go to page 47
  • April 16, 2010 
    • Arbitrator awards 10%. A Tribune article states the raise was on the table for more than a one year period. Team Shields was especially disgusted with this quote, "Daley offered a 16 percent raise over five years, but pulled that off the table in March 2009 after it sat there for more than a year as police union leaders dug in. On Friday, independent arbitrator Edwin Benn ruled officers would get a 10 percent raise over five years. That's far shy of both what Daley offered and the 19 percent the union had asked for at the start of arbitration. Fraternal Order of Police President Mark Donahue fired back at the mayor, saying Daley yanked the 16 percent offer before it was fully discussed amid debate on other contract issues." We take issue with Donahue's statement that the 16% was yanked quickly - the union had more than a year to review this.
  • July 2010  In this month's FOP newsletter, 3rd Vice President Bella's report states, "The City did offer us a 16.1% pay increase for a five year period with a the caveat that we take three unpaid furlough days to  help the Mayor during these trying economic times." This statement is contrary to the arbitrator's decision and is nowhere to be found in the FOP's own handout.
  • November 11, 2010  Crain's Chicago Business article, a critical jab at the floundering efforts of the FOP team coordinating the negotiations.

Comparison of FOP and City of Chicago economic proposals as of June 28, 2008. This was taken from the FOP website and has since been removed.



Cover page of Arbitrator Benn's decision rendered against Illinois State Police Masters Sergeants
 
Previous decision by Arbitrator Benn-Select paragraphs from the Illinois State Police Master Sergeants award

Chicago Sun-Times article, in which Mayor Daley pulls a 16.1% raise offer. The FOP was still seeking a 24% increase



Cover page of Arbitrator Benn's decision for the Boone County's Sheriffs, rendered on March 23, 2009, two days after Mayor Daley pulled the 16.1% increase offer


Select paragraphs of the Boone County Sheriffs' award, in which Arbitrator Benn states again, "there has never been a worse time for a union to find itself in the interest arbitration process." Again, Arbitrator Benn ruled in favor of the municipality over the police union regarding wages.

describing the the City of Chicago decision to initiate arbitration proceedings. After this date, the City and the FOP were offered three arbitrators. Despite his published decisions, the FOP agreed on Arbitrator Benn.

The union claims the 16.1% was contigient upon three unpaid furlough days. Such a claim is totally contradictory to the award issued by the arbitrator.






  • Arbitrator awards 10%. A Tribune article states the raise was on the table for more than a one year period. Team Shields was especially disgusted with this quote, "Daley offered a 16 percent raise over five years, but pulled that off the table in March 2009 after it sat there for more than a year as police union leaders dug in. On Friday, independent arbitrator Edwin Benn ruled officers would get a 10 percent raise over five years. That's far shy of both what Daley offered and the 19 percent the union had asked for at the start of arbitration. Fraternal Order of Police President Mark Donahue fired back at the mayor, saying Daley yanked the 16 percent offer before it was fully discussed amid debate on other contract issues." We take issue with Donahue's statement that the 16% was yanked quickly - the union had more than a year to review this.





  • A Well Thought-out Pension Article

    Sun-Times Article

    Rich Miller wrote a comprehensive and compelling article on pensions this past week.

    As we’re all painfully aware, two Chicago firefighters were killed on the job Wednesday after neighbors thought there might be homeless people inside a burning building. Seventeen other firefighters were injured as they scoured the structure for survivors.
    Like just about everyone else, I was deeply moved by the firefighters’ heroism. But then I got angry as my thoughts turned to all the unfair and downright misleading public employee bashing we’ve seen this year.
    Firefighters, police officers and everyone else who draws a public paycheck have seemed at times to be a modern-day version of the Ronald Reagan era’s “Cadillac-driving welfare queens.”
    Their salaries and benefits are far too lavish, we’ve been told time and time again. The Civic Committee of the Commercial Club of Chicago is on a mission to drastically reduce public pensions, including for firefighters, so that their overall compensation is more in line with the “private sector.” This city’s “other newspaper” has all but turned its editorial page over to the committee.
    The Civic Committee is chaired by a corporate CEO who made more than $15 million last year, according to Forbes.
    I seriously doubt that this particular aspect of the “private sector” is what the committee is referring to, however.
    Look, I don’t disagree that there are serious problems with the public pension systems.
    But how many workers in the “private sector” are paid to run into burning buildings to see if there might possibly be homeless people inside?
    Too often, these workers have been dismissed this year as little more than parasites. The truth is, many do the jobs that you or I would not or could not do, for any wage.
    Would the four financially well-off leaders of the Illinois General Assembly who are now pushing Medicaid reforms clean up the blood spilled on a hospital emergency room floor at 3 a.m?
    The leaders are also attempting to muscle through workers’ compensation reforms, but would any of them volunteer to spend a month working on a busy expressway?
    They’re attempting to limit the rights of Chicago teachers to collectively bargain. Would they spend their days attempting to lift inner city youths to greater heights?
    Would the editorial board members of that “other newspaper” patrol Chicago’s meanest streets?
    Again, let me be clear: Reforms are most certainly needed for every topic mentioned above.
    What gets me so riled up is the one-sided tone of this debate. Workers who have given their lives to public service are too often demeaned as overcompensated and unimportant. And those who speak up for the workers are immediately tagged as “shilling for the unions.”
    I suppose this climate should’ve been predictable. Times are tough. Millions are out of work and millions more are worried they could be tossed out of their jobs as well. They can’t sell their homes, and even if they could, they’d end up owing money because property values have plummeted.
    They’re in no mood to pay for pensions and other benefits that they don’t also receive. They’re angry as hell and this is an easy target, partly because the unions have served themselves up, partly because the people who are in a position to most influence the public debate are taking full advantage of the situation.
    What we need here are compromises which recognize both the inability of society to fund everything that has been promised and the responsibility of that same society to pay for the services it too often takes for granted.
    Maybe this week’s tragic events can snap us all back to reality. We shouldn’t turn each other into enemies.

    Daley to Quinn: Veto Pension Bill (Sun-Times Article)


    There is nothing in this legislation barring the use of outside revenue to fund pensions. A pension obligation bond, airport revenue, a casino or another source of cashflow could be the alternate source of revenue. Mayor Daley is trying to scare the property tax payer. He doesn't speak of addressing the problem that wouldn't have been here if he had taken action 22 years ago.

    Rest assure though, he will still get his, of course. Here is the article from the Sun-Times:

    Daley to Quinn: Veto state pension bill

    Mayor Daley pleaded with Gov. Quinn on Wednesday to veto a bill that, the mayor warned, would choke Chicago homeowners and businesses with a $550 million property tax increase in 2015 to solve the city’s pension crisis.
    “They say the taxpayers of Chicago will pay for 100 percent of all pensions and, if you don’t pay for it, we’re gonna take it out of your state income tax [share]. …. What are you gonna do for the Board of Education? We can’t go tax crazy,” Daley said.
    “This is the highest real estate tax increase in the history of Chicago and that’s only for fire and police. If you put the other unions in there, it’s about $1.2 billion in one year….This will really hit the people. How are you gonna sell your home even if you’re retired? Who would want to buy your home? Buyer beware.”
    The governor’s press secretary Annie Thompson was noncommittal when asked whether Quinn intends to veto the bill. She would only say that he would “review this legislation when he receives it.”
    “Gov. Quinn is proud of the state’s recent pension reforms and looks forward to working with the General Assembly on additional measures to stabilize pension systems throughout Illinois,” she said in an e-mail response to the Chicago Sun-Times.
    Last week, the state House and Senate approved a bill that amounts to a trade-off between police and fire unions determined to restore their pension funds to fiscal health and local governments desperate to reduce their pension costs.
    Chicago and other municipalities won a two-tier pension system that would force newly-hired police officers and firefighters to wait until age 55, instead of 50 to retire with full benefits. They would also get reduced cost of living increases and face caps in the final salary upon which pensions are based.
    In exchange for those givebacks, the unions got a pledge that their pensions funds would be 90 percent funded by 2041. Chicago’s Laborers, Municipal Employees, Police and Firefighters pension funds now have assets to cover just 42 percent of their future liabilities.
    The problem, according to Daley, is the steep ramp-up in city-mandated contributions to those funds, beginning in 2015. The bill further mandates that those contributions be paid for by property taxes.
    Senate President John Cullerton (D-Chicago) has vowed to re-tool the timetable in follow-up legislation next month. But, that’s apparently not good enough for Daley, who’s taking his case directly to Quinn.
    In a letter to the governor signed by most of the 50 aldermen, the city warned that a 2006 bill that reformed CTA pensions gave the mass transit agency 50 years to reach a 90 percent funding level.
    “That’s what we’re asking — just to slow down and get some facts. … Just because you want to tax people, fine. But, you have to get facts on this. You have to bring people in who know something about pensions,” Daley said.
    The lame-duck mayor said once again that it will take a long-overdue increase in employee contributions to solve the problem created by four under-funded city employee pension funds that will run out of money by 2030.
    “Participation of employees is only nine percent. It’s been like that for 30 years. You have to negotiate that. They took it away,” Daley said.
    “In the private sector, people give more contributions. [Quinn is] saying the taxpayers should pay for everything. I differ with that. I think there’s a solution here. But it isn’t all for taxpayers to pay for everything. I disagree with that.”

    What Comes Around, Goes Around (Karma Catches Up With Stephanie Neely)

    The same City Treasurer who threatened to sue me for libel for writing about her campaign contributions from those who invest our pension money, now has her own woes:
    http://www.suntimes.com/news/2715294-418/neely-petitions-signatures-caplan-rodriguez.html



    Petition woes for city treasurer

    City Treasurer Stephanie Neely submitted hundreds of election petitions bearing the names of two notaries who say they didn’t sign them — the same notaries who say their signatures were forged on petitions submitted by four candidates running for mayor.
    The two notaries — Alex Caplan and Maricela Rodriguez — say their signatures were forged on 725 of the 2,331 petition pages that Neely submitted to city election officials last month so she could run for re-election in February. One of Neely’s petition sheets contains both Caplan’s forged signature and Rodriguez’s notary stamp.
    Neely’s petitions were circulated by ward organizations and volunteers, according to her spokesman Paul Stewart, who says she didn’t pay anyone to collect signatures. Stewart said he doesn’t know who gathered the petitions that bear the names of Caplan and Rodriguez.
    “It’s horrible that people who say they were out helping us did something fraudulent,” he said. “Whoever turned in those sheets, it had to be the same source’’ who circulated petitions for the four mayoral candidates — former U.S. Sen. Carol Moseley Braun, businessman Rob Halpin, state Sen. James Meeks and community activist Patricia Van Pelt-Watkins.
    The Chicago Sun-Times has reported that Caplan and Rodriguez say their signatures were forged on nearly 2,800 petitions submitted by those four mayoral candiates, as well as on 488 petitions Ald. Sandi Jackson (7th) submitted to run for city clerk before dropping out of that race to run for re-election to the City Council.
    Those forged notary signatures now are under investigation by Illinois Secretary of State Jesse White, whose office regulates notaries.
    Two women have filed separate challenges contending that Neely shouldn’t be allowed on the ballot because her petitions don’t contain 12,500 valid signatures.
    Neely collected more than 30,000 signatures — including more than 10, 500 on the petition sheets bearing the names of Caplan and Rodriguez. That’s still far more than the 12,500 she needed to get on the ballot, Stewart noted.
    Mayor Daley appointed Neely treasurer in 2006 to replace Judith Rice. Neely was elected treasurer a year later.

    How Your Pension Money Works - Your Contribution and The City's Contribution (Employer to Employee Multiplier vs. The ARC)


    I had a quote in the Tribune article "Lawmakers press Chicago, suburbs on fire, police pensions"

    Here is part of an article I wrote explaining the Multiplier that the pension fund is on vs the funding mechanism we should be on, called the actuarial required contributions.

    Employer to Employee Multiplier vs. The ARC
    Currently, 9% of our salary goes into the pension. This is matched by a 2:1 contribution from the City of 18%. There is absolutely no correlation between the multiplier and what it costs to operate this pension plan. Under the Illinois pension code, the contributions required by law for the City is 2:1 multiplier. This amount has been insufficient to maintain solvency for decades. The City has recklessly ignored the actuaries’ requests for more money every year in our annual report submitted to City Council. The Actuarial Required Contribution (ARC) represents the cost required to amortize the unfunded liability so the fund would be at a 90% funded level over thirty years (under GASB 25 & 43 rules). The actuaries also recommend a multiplier each year. The recommended multiplier from the actuary from the 2009 report was 5.87 to 1 as opposed to our existing 2:1. As stated by the actuary, this [contribution multiplier] ratio “is needed to adequately finance the fund.” Once again, the actuaries’ request went ignored from the City.

    The Widening Gap of Revenues vs. Expenses

    As these actuarial recommendations fall on deaf ears, the gap between contributions raised from employer and employee contribution versus the disbursements paid out has widened to alarming levels. In 1990, contributions were approximately $125 million. Disbursements were $135 million, creating a gap of $10 million. The $10 million paid out consumed .7% of the pension fund that year. The 1995 contributions were $151 million. Disbursements were $202 million. The gap grew to $51 million or 2.4% of the fund that year. In the year 2000, contributions were $196 million. However, disbursements grew to $323 million, which was 2.9% of the fund size. In 2005, the fund collected $225 million in contributions, yet disbursed $439 million, widening the gap to nearly $215 million in that single year, totaling 5.4% of the fund’s assets. Finally, the contributions in 2009 were approximately $285 million. The fund paid out $519 million. The gap for in the single year of 2009 was $242 million which was 7.3% of the entire fund’s assets. This has gone unchecked and unfunded for far too long! This clearly demonstrates how the 2:1 multiplier used by the City does not work.

    Lawmakers press Chicago, suburbs on fire, police pensions

    Legislation forcing municipalities to set aside more money is sent to governor

    ct-met-pension-law-20101202

    After decades of making retirement promises they weren't fully paying for, Chicago and many suburbs could be forced to set aside more money under sweeping changes to police and firefighter pensions headed to Gov. Pat Quinn's desk.

    The legislation, approved Thursday on a 46-4 Senate vote, prompted an immediate rebuke from Chicago leaders who said it was draconian and would force financial pain on city taxpayers.

    "This goes to the economic vitality of the city of Chicago and the county of Cook, the economic engine of the state," Mayor Richard Daley said.

    The bill aims to address long-standing failures by Chicago and many of its suburbs to collectively put away hundreds of millions of dollars to cover the costly retirement benefits already earned by past and current public safety workers.


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    The measure could result in lower payments in the near future for some suburbs, although others may be forced to pay more if the measure is enforced.

    Few sides were left completely satisfied. Reform advocates said it doesn't go far enough. Police and fire unions took a hit with benefits cuts for new hires.

    Chicago was the most vocal opponent, unleashing an unsuccessful full-scale lobbying blitz to kill the bill because it said it would require a major property tax increase.

    Supporters countered that the bill merely forces the city to start paying for its promises.

    "The city can't just continue to ignore it," said Laurence Msall, president of the Civic Federation, which has long called for pension reform.

    Daley acknowledged reform is necessary, but said employees need to pay more into the pension plans. The bill doesn't do that.

    Chicago leaders also complained of a key provision that changes how the city calculates the amount it sets aside for pensions starting in 2015, from multipliers of payrolls to more commonly accepted actuarial methods.

    The change may seem mundane, but a recent Tribune investigation found the current formula allowed the city to claim it adequately set aside enough money for pensions at the same time it cut deals to boost benefits that helped spike the debt. The city police and fire funds now have less than 40 percent of the money needed to cover the eventual pension benefits already earned by past and current workers.

    "This is the first time that anybody has acknowledged that the multiplier used to fund Chicago's pensions doesn't meet its obligations," said Mike Shields, a trustee for the police officers' pension. "They've been lying to themselves for the past 20 or 30 years."

    Still, it's unclear if that requirement will survive, and in what form. Senate President John Cullerton, D-Chicago, pledged to work with city officials, perhaps pushing a bill next year to stretch the city's deadline to reach the required funding level.

    Another Tribune analysis found that in some suburbs, funding levels aren't much better than Chicago's. Collectively, the suburbs have barely half the money the state says is needed to cover benefits already earned, partly because some towns haven't set aside enough. The current law directs towns to pay what actuaries tell them to, but many towns ignored it without punishment.

    The bill adds some punishment. For towns that don't make minimum payments, starting in 2015, the state can divert some of a town's income or sales tax receipts to cover the pension payments. Municipal lobbyists suggested that will lead to dramatic tax hikes or service cuts in some communities already struggling with far higher pension payments they need to make to offset the low investment earnings of funds during recession.

    But the measure also pushes pension debt further out, requiring suburbs to reach just 90 percent funding by 2040 instead of the current law: 100 percent by 2033.

    And the bill would eventually save Chicago and suburbs by cutting benefits of new hires starting next year. The traditional retirement age would rise from 50 to 55 and it would become more difficult to spike pensions with end-of-career salary bumps.

    But with no changes affecting current workers' benefits, reform advocates question how much of a bite the reforms will take out of pension debt.

    "If they want to really reduce the cost of the city's pension obligations, they're going to have to look at active employees," Msall said. "Everyone is going to have share this burden."

    Tribune reporters Joseph Ryan, Monique Garcia and John Byrne contributed to this report.

    Senate Bill 3538 Passed through Senate in a 46-4 vote.

    Senate Bill 3538 Passed through Senate in a 46-4 vote. 

    Chicago Tonight Discusses Police Pension Funds

    Pension Bill Discussed on Chicago Tonight. Jim McNamee, President of the Illinois Public Pension Fund Association-of which I am a legislative board member, defends Police and Fire Pension Funds. Take a look, click on nov 30:
    http://www.wttw.com/chicagotonight/video/xFWzms8mEDK80GWrCAtswtCPfaTB6Amf/

    Chicago Tribune Investigates Pensions - What Does This Mean for Us?

    Pension Bets Not Paying Off
    I’m very pleased to see yesterday’s article placing the blame on those who are truly at fault-the politicians. For the past six months, I have been in communication with Tribune Reporter Jason Grotto regarding his series of articles about city pensions. He departed from the Tribune Editorial Board’s agenda to blame the “greedy” public employee. Today’s article clearly demonstrates Mayor Daley’s political stranglehold on the choosing of investment managers and the pernicious effect of playing politics with our pension funds.

    Placing blame where it is deserved is necessary, but alone is inadequate. The important question remains -- what is the solution? A look at the unfunded liability numbers can seem overwhelming. In the 1980’s the police fund was funded in the 40 percentile. The Fire Fund was told in the 1970’s that they’d run out of money. The funding structure for our pension is broken. There are ways, however, in which our pension can be fixed. The pension funds have used a 2:1 employer to employee contributions. $2 to every $1 contributed. THERE IS NO CORRELATION BETWEEN WHAT IT COSTS TO FUND A PENSION PLAN AND THIS MULTIPLIER USED BY THE CITY. The fix should begin there, but more must be done.

    A pension obligation bond needs to be issued. We need to take advantage of where the bond rating is right now BEFORE the City gets downgraded again. The employer and employee contributions need to be increased. This may be difficult to hear, but anyone telling officers that this is not true is lying to you, plain and simple. What should NOT occur is any increase in employee contribution without a corresponding increase in employer contribution as well as the means to enforce employer contributions. We need a funding mechanism with teeth, to hold the city’s feet to the fire and ensure that history does not repeat itself. Finally, we need an alternate source of revenue that flows directly from the source (such as the airports or TIF funds) straight into the pension plans without giving the City the ability to withhold any funds. The burden cannot stay directly on the property tax payer or they will revolt.

    It is of paramount importance, more now than ever as pensions remain in the political spotlight, that everyone be informed and engaged regarding our pension fund. It is my proud duty to represent your interests, and I will do so tirelessly, striving to ensure the health of our pension fund. As ever, if you have any questions or concerns, do not hesitate to contact me at mikeshields1@yahoo.com.

    Tuesday, December 28, 2010

    Pension Bill Info from December

    December 1 – Pension Bill in Springfield
    I'm down in Springfield now on this.  Keep in mind, the House has passed this with a super majority, but the Senate has not yet.  Most likely, the Senate will vote on this tomorrow.  This is the first time in recent history that the Illinois Legislature has challenged the 2:1 employer to employer multiplier.  This bill is the legislature ordering the City to pay based on what the actuary recommends each year, not what the multiplier is (a much higher value).  
      
    Here is a well written e-mail by one of the lobbyists explaining the bill.
    This evening the House of Representatives passed SB 3538 as amended.  You may view the full text here –
     
    http://www.ilga.gov/legislation/96/SB/PDF/09600SB3538ham003.pdf
     
    The benefit changes will only impact police & fire employees that are newly hired into positions covered by the pension code on or after January 1, 2011.  Current employee’s benefits will not be affected by this legislation.
     
    The highlights of the bill include the following  elements which are standardized retirement benefits for all new public safety employees who enter the Articles 3 (downstate police), 4 (downstate fire), 5 (Chicago police), 6 (Chicago fire), and/or 7 (IMRF-SLEP) on or after 1/1/2011.
     
    1.       No change in employee contributions.
     
    2.        Maximum benefit will be  75% of final average salary* at 30 years of service and 55 years of age.
     
    3.        Final average salary* is defined as “the average monthly salary obtained by dividing the total salary of the police officer during the 96consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.” (ie -  best 8 of last 10 years)
     
    4.        Maximum salary for pension purposes is capped at $106,800 for 2011.  The cap will be increased each year thereafter by 3% or ½ of CPI-U whichever is less.
     
    5.       Survivors annuity benefits will be 66 2/3 of the deceased employee’s salary at time of death.
     
    6.       COLAs – Both retirees and survivors will receive COLAs equal to 3% or ½ of CPI-U the year after their 60th birthday.
    The bill contains authorization for future pension fund studies.
     It also includes some very important and momentous funding compliance language that is designed to insure that our funds remain stable and solvent for all current and future public safety retirees and employees. 
    While the coalition was opposed to some of the benefit reductions for new employees we were successful in maintaining current employees’ benefits, all contribution levels, minimizing benefit reductions for new employees,
    and much to the disappointment of municipal employers - securing meaningful funding compliance language for all of the funds.  We will continue to work with the Senate leadership to minimize any additional adverse impact for new employees.
    The legislation is now in the Senate for concurrence.  We anticipate that the Senate will act on this bill in the next 24 to 48 hours.

    City Treasurer Threatens Defamation Suit Over Policeman’s Articles

    Last year, I was threatened by Stephanie Neely, who attempted to sue over articles I wrote for the FOP newsletter. Apparently, I'm doing my job too well.

    The story was covered by the NY Times, written by Dan Mihalopoulos.

    City Treasurer Threatens Defamation Suit Over Policeman’s Articles

    By DAN MIHALOPOULOS

    Mayor Richard M. Daley grudgingly bears the news media’s tendency to “scrooten” him constantly. Stephanie D. Neely, the first-term city treasurer, is taking a different approach to dealing with scrutiny from at least one pen-wielding critic. She retained a lawyer and is threatening a defamation suit against a Chicago police officer who repeatedly criticized her in the F.O.P. News, a union newsletter published by the local Fraternal Order of Police.
    In the articles, Michael K. Shields wrote that Ms. Neely, acting as a member of the police pension board, cast votes that favored pension fund managers who contributed to her campaign. Her assertion that the articles entitle her to “substantial damages” from Mr. Shields and the union has not deterred Mr. Shields. State records confirm the donations from fund managers to Ms. Neely’s campaign.
    “It seems that if you accept campaign cash in Chicago, that’s just business,” wrote Mr. Shields, the elected board trustee for patrolmen and detectives at the Chicago Policemen’s Annuity and Benefit Fund. “If you speak out against it, that’s libel!”
    As treasurer, Ms. Neely, 46, sits on the police pension fund’s eight-member board and on the boards of other city employee funds. Mr. Shields, 32, first used his “Pension News” column in the May 2009 newsletter to criticize her after she and the other fund trustees voted him down and refused to answer a subpoena from the office of the city’s inspector general. The investigators sought documents about the deals between city pension funds and DV Urban Realty Partners, a company that included the mayor’s nephew Robert G. Vanecko.
    Writing about how the city’s representatives on the board had opposed complying with the subpoena, Mr. Shields pointed out that Ms. Neely received a campaign contribution from the realty company. In the November newsletter, he continued to question her for opposing his efforts to get another pension fund money manager fired.
    “This shakedown for control of our money must stop,” wrote Mr. Shields, who had persuaded only one other trustee to join his motion to get rid of Ariel Capital Management, another donor to Ms. Neely’s campaign fund.
    The treasurer’s lawyer, Alan S. King, sent a letter to Mr. Shields on Dec. 14. “We are fully prepared to take any and all necessary legal action to protect Ms. Neely,” Mr. King wrote.
    In an interview this week, Ms. Neely said she was justified in threatening to sue and strongly denied that campaign cash influenced her actions on the boards of the police pension fund and other public employee funds.
    “My reputation is all I have,” she said. “I have acted in the best interests of the funds.”
    Sandy Davidson, a professor of communications law at the University of Missouri, said Mr. Shields had not defamed Ms. Neely. His “shakedown” comment, Ms. Davidson said, is a classic example of free speech known in legal circles as rhetorical hyperbole.
    “The Supreme Court has made it clear that it is so important we have this wide-open, robust debate, especially in political disputes,” Ms. Davidson said after reviewing Mr. Shields’s articles. “Public officials voluntarily assume the risk that they will face scrutiny.”
    Indeed, case law sets a higher standard for proving libel against public figures.
    Mr. Shields called on Ms. Neely to give back campaign cash from companies that manage the money police officers contributed to their pension fund. Only then, he said, would he ease his scrutiny of her.

    Chicago Tonight Story on Our Pension & Stephanie Neely

    Back in April, this segment aired on Chicago Tonight, painting an accurate picture of what our pension and its board members are like. Former Chicago Tribune City Hall beat reporter, Dan Mihalopoulous has covered many pension fund stories including the Mayor's nephews' fund that received money from 4 city pension funds.  He now works for the newly created Chicago News Co Op that writes for the NY Times. 
    The two links below summarize the City of Chicago's Elected Politicians' views toward our pension fund.  They do not care what the funding levels are, they merely want the campaign cash from the very same investment managers that they vote on.  Keep in mind, whatever money managers donate to the the City Treasurer, they typically donate 10X that amount of cash to Mayor Daley's warchest.  Pension Business in Chicago is huge.  Investment managers make huge profits off of OUR retirement money.
    Chicago Tonight shows a very basic "circle" demonstrating how the City Treasurer operates on our pension fund.  This is at 1 minute and 46 seconds.  Mr. Mihalopoulous hits the nail on the head describing the City Treasurer's actions.
    Chicago Tonight discussing City Treasurer Threatening Libel Suit Against Patrolmen's Rep. Mike Shields.  Take 6 minutes and watch this!

    Just the Tip of the Iceburg

    A good Chicago Tribune article on Daley and our pension!

    Pension probe: Inspector eyes Daley ties

    | 6 Comments | UPDATED STORY
    City Hall's inspector general has begun investigating how at least three city pension funds came to make investments with a firm co-owned by a nephew of Mayor Richard Daley, the Tribune has learned.
    The office of Inspector General David Hoffman has subpoenaed records from the pension funds dealing with their investments of tens of millions of dollars in DV Urban Realty Partners, a real estate investment firm formed by a top Daley ally, Allison Davis, and Daley nephew Robert Vanecko.
    The inspector general requested records on those investments from the funds for municipal employees, police and laborers, according to a source. The pension funds have paid the investment group hundreds of thousands of dollars in management or consulting fees.
    Hoffman's investigators are seeking details on the property DV Urban Realty acquired using the pension funds' money, according to a subpoena obtained by the Tribune.
    The inspector general's office also subpoenaed information that the pension funds' trustees reviewed before investing with DV Urban Realty, suggesting investigators are trying to learn how the decisions were made and whether they were influenced by Vanecko's relationship with the mayor, the source said.
    Davis and Vanecko could not be reached. Hoffman declined to comment.
    Davis and Vanecko began DV Urban Realty to do development projects in neglected  areas.
    Vanecko's city business ties were an issue in late 2007, when it was reported that he and Daley's son, Patrick, had obtained a stake in a sewer business that had contracts with the city. The company failed to disclose Daley and Vanecko's ownership interest in economic disclosure statements filed with the city, as required by city ordinance.
    Police pension fund executive director John Gallagher said that DV Urban Realty so far had drawn $5 million on the fund's original $15 million commitment; as of the end of last year, that $5 million investment was valued at $3.5 million. He declined further comment.
    Terrance Stefanski, executive director of the Municipal Employees' Annuity and Benefit Fund, declined to comment, as did Fred Heiss, general counsel of the Laborers' and Retirement Board Employees' Annuity and Benefit Fund. The two declined to disclose how much the funds had committed to DV Urban Realty. The Municipal Employees' pension paid $225,000 in management fees in 2007.
    The city teachers' pension fund paid more than $300,000 in management fees to DV Urban Realty in 2007,  the fund's annual report states. But it's unclear if the inspector general subpoenaed its records. Kevin Huber, the fund's executive director, could not be reached.
    --Steve Mills and Dan Mihalopolous

    Police Pension Money Used for Secretary's Law School Tuition

    Tuesday, December 21, 2010

    FOP's "Truth" in Negotiating: How Your Union Didn't Fight for You

    Do you think the FOP utilized all of its resources to intelligently negotiate the best deal they could for their officers? If you do, think again. We charted a timeline for this past contract negotiation regarding wages using such sources as the FOP website and newsletters, newspaper articles, as well as two prior arbitration decisions Arbitrator Benn awarded shortly before his FOP/City of Chicago decision.

    The timeline is as follows:
    • June 28, 2008  Comparison of FOP and City of Chicago economic proposals as of June 28, 2008. This was taken from the FOP website and has since been removed. (Image of document at bottom)
    • January 27, 2009  Cover page of Arbitrator Benn's decision rendered against Illinois State Police Masters Sergeants. (Image of document at bottom)
    • January 27, 2009  Select paragraphs from the Illinois State Police Master Sergeants award, in which Arbitrator Benn states, "(T)here has never been a worse time for a union to find itself in the interest arbitration process." Arbitrator Benn ruled in favor of the state over the police union. (Image of document at bottom)
    • March 21, 2009  Chicago Sun-Times article, in which Mayor Daley pulls a 16.1% raise offer. The FOP was still seeking a 24% increase.
    • March 23, 2009  Cover page of Arbitrator Benn's decision for the Boone County's Sheriffs, rendered on March 23, 2009, two days after Mayor Daley pulled the 16.1% increase offer. (Image of document at bottom)
    • March 23, 2009  Select paragraphs of the Boone County Sheriffs' award, in which Arbitrator Benn states again, "there has never been a worse time for a union to find itself in the interest arbitration process." Again, Arbitrator Benn ruled in favor of the municipality over the police union regarding wages. (Image of document at bottom)
    • July 29, 2009  Chicago Tribune news article describing the the City of Chicago decision to initiate arbitration proceedings. After this date, the City and the FOP were offered three arbitrators. Despite his published decisions, the FOP agreed on Arbitrator Benn.
    • April 16, 2010  The union claims the 16.1% was contigient upon three unpaid furlough days. Such a claim is totally contradictory to the award issued by the arbitrator. Arbitrator's decision - go to page 47
    • April 16, 2010 
      • Arbitrator awards 10%. A Tribune article states the raise was on the table for more than a one year period. Team Shields was especially disgusted with this quote, "Daley offered a 16 percent raise over five years, but pulled that off the table in March 2009 after it sat there for more than a year as police union leaders dug in. On Friday, independent arbitrator Edwin Benn ruled officers would get a 10 percent raise over five years. That's far shy of both what Daley offered and the 19 percent the union had asked for at the start of arbitration. Fraternal Order of Police President Mark Donahue fired back at the mayor, saying Daley yanked the 16 percent offer before it was fully discussed amid debate on other contract issues." We take issue with Donahue's statement that the 16% was yanked quickly - the union had more than a year to review this.
    • July 2010  In this month's FOP newsletter, 3rd Vice President Bella's report states, "The City did offer us a 16.1% pay increase for a five year period with a the caveat that we take three unpaid furlough days to  help the Mayor during these trying economic times." This statement is contrary to the arbitrator's decision and is nowhere to be found in the FOP's own handout.
    • November 11, 2010  Crain's Chicago Business article, a critical jab at the floundering efforts of the FOP teamt coordinating the negotiations.
    Comparison of FOP and City of Chicago economic proposals as of June 28, 2008. This was taken from the FOP website and has since been removed.
    
    Cover page of Arbitrator Benn's decision rendered against Illinois State Police Masters Sergeants
    
    Previous decision by Arbitrator Benn-Select paragraphs from the Illinois State Police Master Sergeants award

    Chicago Sun-Times article, in which Mayor Daley pulls a 16.1% raise offer. The FOP was still seeking a 24% increase

    
    
    Cover page of Arbitrator Benn's decision for the Boone County's Sheriffs, rendered on March 23, 2009, two days after Mayor Daley pulled the 16.1% increase offer
    

    Select paragraphs of the Boone County Sheriffs' award, in which Arbitrator Benn states again, "there has never been a worse time for a union to find itself in the interest arbitration process." Again, Arbitrator Benn ruled in favor of the municipality over the police union regarding wages.

    describing the the City of Chicago decision to initiate arbitration proceedings. After this date, the City and the FOP were offered three arbitrators. Despite his published decisions, the FOP agreed on Arbitrator Benn.

    The union claims the 16.1% was contigient upon three unpaid furlough days. Such a claim is totally contradictory to the award issued by the arbitrator.



  • Arbitrator awards 10%. A Tribune article states the raise was on the table for more than a one year period. Team Shields was especially disgusted with this quote, "Daley offered a 16 percent raise over five years, but pulled that off the table in March 2009 after it sat there for more than a year as police union leaders dug in. On Friday, independent arbitrator Edwin Benn ruled officers would get a 10 percent raise over five years. That's far shy of both what Daley offered and the 19 percent the union had asked for at the start of arbitration. Fraternal Order of Police President Mark Donahue fired back at the mayor, saying Daley yanked the 16 percent offer before it was fully discussed amid debate on other contract issues." We take issue with Donahue's statement that the 16% was yanked quickly - the union had more than a year to review this.