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Powerful political interests will soon be going head to head in Springfield.

Illinois Gov. J.B. Pritzker last week kicked over what could be a political hornet’s nest when he proposed the consolidation of “suburban and downstate police and fire (pension) plan assets.”

He asserted that the consolidation of the funds into single investment entities will generate greater returns at reduced costs. The governor, a multibillionaire with considerable experience in investments, complained that under the status quo, local police and fire pension funds are — collectively — losing up to $1 million a day in investment returns.

“The single most impactful step that the state can take to address the underfunding of downstate and suburban police and fire pension funds is to consolidate the plans’ investment assets. ... Analysis by the Department of Insurance estimates that if the more than $14 billion of suburban and downstate police and fire plans were to achieve investment returns similar to the other larger Illinois plans over the next five years, they would collectively generate an additional $820 million to $2.5 billion in investment returns alone,” states Pritzker’s Pension Consolidation Feasibility Task Force in a report issued last week.

Pat Devaney, a Champaign firefighter who is president of the Associated Fire Fighters of Illinois, said his organization “supports the recommendations of the task force.”

But a spokesman for a police organization dissented from that view.

The Illinois Fraternal Order of Police expressed strong concerns about consolidation, complaining that the recommendations would not achieve their stated goals.

“Law enforcement officers were not allowed to participate, provide feedback or be shown that this was anything other than an attempt to grab officers’ money,” stated Shawn Roselieb, executive director of the union’s labor council. “Officers have paid their own money into these police pension funds every working day of their lives.”

That kind of emotional argument may have some appeal. But there is no attempt by anyone to “grab officers’ money.”

Under the Pritzker proposal, the investments of roughly 650 suburban and downstate police and fire plans would be handled in the same manner as those of Illinois’ teachers or municipal employees.

The Teachers Retirement System invests money on behalf of all state teachers, as does the Municipal Retirement Fund for its members. With the major exception of the state’s failure to invest adequate sums for investment by the TRS, these systems serve their members well.

This is a major change in approach, one that would require legislative approval. Review will begin when legislators return soon for the fall veto session.

So far, Pritzker has had no problems getting his programs through the Legislature. But opposition from police groups could scuttle the governor’s plans.

The task force recommended creating two new investment funds — one for police officers and the other for firefighters — that would pool about $15 billion in assets of the 650-plus existing funds.

Each local plan would “maintain an individual and separate account within the new consolidated funds, such that no assets or liabilities are shifted from one plan to another,” the task force stated.

The funds would be governed by separate boards made of up equal numbers of employer and employee representatives.

Given the fiscal realities facing local police and fire pensions, only one thing matters in terms of this proposal. From a dollars-and-cents point of view, is consolidation a means of achieving greater returns at lower costs? It’s strictly a financial calculation.

Firefighters have apparently concluded they’re dollars ahead to abandon local boards who oversee smaller investment pools.

Police, obviously, have reservations. But their criticism, at least to this point, ignores the real issues.

In addition to arguing the state is somehow trying to “grab officers’ money,” the police representative charged that members of the pension task force think “downstate police officers are the only public employees who are just not smart or sophisticated enough to manage their own money.”

That kind of silly, self-pitying declaration doesn’t ring true in the overall context of how other public pension funds are invested in this state.

Pritzker dismissed criticism of those who do not share his view on this subject. But others should not.

Both the proponents and opponents of this plan need to be given an extended opportunity to explain why they have concluded this proposal does or does not offer an improvement in the present situation. Of particular importance to consider are the transition costs of merging separate police and fire pensions funds into two investment vehicles.

He who makes the most persuasive case — not the most emotional — should win.

Whatever happens, no one should get the idea that the modest gains predicted will have a major impact on the overall fire and police pension underfunding problems.

Many of these pension plans are in dire financial straits, suffering from funding shortfalls that won’t be solved by consolidation. Nonetheless, if it can do what its proponents claim it can, there’s no reason to leave money on the table.

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