PENSION FUND UPDATES • by Kenneth A. Hauser, President
SB440 passed the House and Senate in the November/ December Veto Session which, as a result, was an override of the Governor’s Veto. All Police Officers born before January 1, 1966 will now receive a 3% COLA increase 13 months after their date of retirement. This 3% COLA will be forever, there is no cap with this increase. Approximately 1375 annuitants are affected by the passage of SB440. The Pension Fund is trying to get the first 3% COLA due January 31, 2017 to all 1375 annuitants but the cumulative rate will take up to 6 months because the calculation is being done manually.
As you are aware, the Public Employee Safety Act known as the Helps Bill proposed by the National Conference on Public Employee Retirement Systems (NCPERS) and the National Fraternal Order of Police passed and became law in 2006. This bill created a benefit for public employees to receive up to $3000 credit for healthcare premiums on their annual tax return when paid through the Pension Fund or Municipality. For annuitants that did not sign up for the FOP Aetna Plan or the City BC/BS Plan but joined another plan that is not paid through the Pension Fund, you will still receive the up to $3000 healthcare deduction on your 2016 tax return. We are aware however, that you will lose this tax deduction in 2017. Therefore, retired Chicago Firefighter, Trustee Dan Fortuna who is the President of the NCPERS, and I, an elected NCPERS Board Member, will be proposing a change in the Helps Bill in the 115th Congress to change the legislation requiring a Public Safety Employee to make healthcare premiums through their Pension Fund. The new legislation will only require an annuitant to show proof of payment of their healthcare premiums when filing their annual income tax return. A great deal of support will be needed. Therefore, we will be asking the National Fraternal Order of Police and the International Association of Firefighters to support us in this endeavor. If passed, this will affect your 2017 tax return. I will keep you informed of the progress of this legislation.
During 2016, the Pension Fund Trustees hired eight Money Managers that will fit into the Fund’s Portfolio. The Managers and classifications are: Beach Point and Voya Financial, Opportunist Credit; Monroe Capital and Alcentra, Private Equity; HGK Asset Management, Cash Management; EntrustPermal, Hedge Funds/Opportunist Credit; Pluscios Management, Hedge Funds and Dorchester Capital Advisors, Opportunist Credit/Hedge Funds. The Fund also invested additional funds with three of our present managers; Global Infrastructure Partners, Infrastructure; Invesco, Private Equity; and Lone Star, Real Estate. The Pension Fund Trustees rehired the Funds Investment Consultant for a period of up to five years: New England Pension Consultant (NEPC).
The total number of active police officers making monthly contributions to the Pension Fund is 12,121 as of December 31, 2016. The total number of police officers hired during 2016 was 514 of which 131 were female and 383 were male. The total number of police officers who left the Police Department during 2016 was 552. Of the 552 police officers, 2 officers died while on the job, 6 officers were discharged, 2 probationary officers were discharged, 39 police officers chose to resign without a pension, and 503 officers completed their careers and retired with a pension. The rank breakdown of the 503 officers is 366 under the rank of Sergeant, 89 Sergeants, 34 Lieutenants, 8 Captains and 6 Exempt rank. The total number of officers on disability is 272 which breaks down to 190 on duty disability, 37 on ordinary disability, 31 on occupational heart disability and 14 on total and permanent disability. A total of 12,944 annuitants are receiving approximately $60 million in benefits monthly from the Pension Fund as of December 31, 2016. 9,623 are retired police officers, 3,132 are widow/widowers and 189 are children. For the month of December 2016, the average retiree was 59 years of age with 28 years and 1 month of service. As of November 30, 2016, there are 1820 annuitants between 80-89 yoa, 450 annuitants between 90-99 yoa and 11 annuitants over 100 yoa.
There will be a Fraternal Order of Police Lodge 7 election of Officers and Trustees in March, 2017. The ballots will be mailed the week of February 13th and counted on Friday, 10 March 2017. Please vote in this very important election.
Kenneth A. Hauser
Kenneth A. Hauser, Elected Trustee, President [BACK]