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Illinois Professional Firefighters Association

188 West Industrial Drive

Suite 134 Elmhurst, IL 60126-1608

v 630.833.2405 f 630.833.2412

www.ipfaonline.org

ipfa@aol.com

President: John Szeszycki

Vice-President: Tim Clemens

Board Secretary: Bob Zamor

Treasurer: Greg Knoll

Sgt.-at-Arms: Terry Cox

Executive Director: Greg Knoll

Staff Secretary: Carol Budz

Advertising Director: Terry Cox

TABLE OF CONTENTS:

Director’s Corner 2 Retirement, Savings 2 Sacramento Audit 3 Hartford Fire Index 4 Advisory Meetings 5 Dallas Police & Fire 6 IPFA Board Meeting 7 Budget Impasse Impact 7 Protective Hood Bulletin 8 Occupant Tenability Study 8 2016 Annual Reports 8 Webcast Training 9 2017 Spring Seminar 9 2017 State Fair 10 Honor Motorcycle Ride 10 IFSI Library is a Finalist 11 Scam Free 2017 12 Fire Safety Alliance 13 Pension Fairness 14 Comments from the Staff 14 2015 Expense Data 15 Secretary of State Show 16 Rule 23 PSEBA Decision 17 Line of Duty Denial 17 Pension Coalition Update 18 Calendar Photo Requests 18 Membership Update 18 Fire College 19

IPFA 2017 DATES TO REMEMBER:

DAY: DATE: SHIFT: EVENT:

Friday May 5 Red Spring Pension Seminar

Tuesday May 9 Gold Firefighter Medal of Honor - Springfield Wednesday May 10 Black Board Meeting

Wednesday August 10 Gold Board Meeting

Saturday August 12 Red IPFA Day at the Illinois State Fair

Wednesday October 11 Red Annual Meeting—Officer Elections

Friday November 3 Black Fall Pension Seminar

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T H E 2017 - Volume 1

Photo by Kevin Kelso, Kelso Productions, Inc.

PENSION BOARD SECRETARY EDITED VERSION

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DIRECTOR’S CORNER

Greg Knoll, Executive Director

This issue of the Size-Up contains an article updating re-search of various classes of expenses of downstate fire and police pension funds as compared to the other 16 major re-tirement systems in the State of Illinois. Downstate fire and police pension expense percentages are the second and third lowest of the 18 state-wide retirement systems.

The 2015 financial data for downstate fire and police funds from the Illinois Department of Insurance has been pro-cessed, the fire and police fund databases have been updat-ed, and new reports for each individual fund will be available at the spring pension seminar. For those members who would like copies of the report, just contact the office and we will send you a copy of your fund’s report.

A few of the articles are of concern to the Board . Politics are what they are, and the staff, Board members, and our Legislative Representative in Springfield are watching closely. It is hard to review a piece of legislation, prepare a response, and monitor its’ progress or lack of same when it is a “shell bill”, with no content to the Bill as posted. Remember to go to the web site for the latest legislative re-port, instructions on how to find your legislator, enter a wit-ness slip for a piece of legislation, or tips on what to say if you choose to contact a legislator as an individual. Be as-sured that Mark or I am registering witness slips to support or oppose proposed legislation that we feel is not in our best interest. I look forward to seeing some of you at the Spring Seminar. Please try to make time to come to the State Fair and volun-teer to help at the Fire Service exhibit. Otherwise, enjoy the read Remember to: be safe, take care of your partner, & have fun.

of equipment; they do not stop soot and chemicals from depositing on a firefighter’s neck and head – areas that are extremely vulnerable to dermal exposure. “NFPA has had the back of firefighters for more than 120 years,” said Ed Conlin, Public Fire Protection division manag-er. “Given the increase in occupational cancer incidents in the fire service, we feel it is best to err on the side of cau-tion as we await additional scientific research on PPE and learn more about the absorption of carcinogens near the forehead, jaw, neck and throat.” The NFPA protective hood bulletin recommends that fire departments establish an overall health and safety program and establish practices for care and maintenance in accord-ance with NFPA 1851, Standard on Selection, Care, and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting. For additional infor-mation, visit NFPA’s PPE cleaning page.

NFPA ISSUES PROTECTIVE HOOD SAFETY BULLETIN

On January 27 The National Fire Protection Association (NFPA) has issued a safety bulletin on firefighter protective hoods. It is well-documented that firefighter Personal Pro-tective Equipment (PPE) is exposed to a wide range of tox-ins, pathogens and other hazardous substances. According to a study by the Centers for Disease Control (CDC) and the National Institute of Occupational Safety and Health (NIOSH), firefighters have a greater number of cancer diag-noses and cancer related deaths. Firefighter protective hoods are the most penetrable piece

Don’t interfere with anything in the Constitution. That must be maintained, for it is the only safeguard of our liberties.

No man has a good enough memory to be a successful liar.

Abraham Lincoln

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ANOTHER IMPACT OF THE ILLINOIS BUDGET IMPASSE –

I wanted to make you aware of an issue that was brought to my attention on Fire Service Legislative Day: Four Illinois Firefighter Line of Duty Death families have been awarded the death benefit and have not received it as a re-sult of the state budget impasse. The current benefit is $351,383 per the Court of Claims. I can tell you that AFFI President Devaney and the City of Chicago are working diligently to get this issue resolved and get an appropriation for these families. These families made the ultimate sacrifice and for them not to receive the death benefit due to the state budget impasse leaves me speechless. Will keep everyone updated. Thank you to President Devaney and the Chicago Fire De-partment. Editors Note: It’s a shame that the President of the Illinois Fire Services Association had to send this e-mail to each member organization. It’s also a sad statement when we had to run this article.

IPFA FEBRUARY BOARD MEETING

The IPFA Board met on Wednesday, February 8 in the new office space. Annual elections of Officers were held. The 2017 Officers are shown on the front page banner. The Board directed staff to send out electronic monthly leg-islative updates to all members with e-mail addresses. Those e-mails also contain links to the IPFA web site pages that allow members to look up their State Representative and Senator, check on the status of all legislation in the Illi-nois General Assembly, how to file witness slips for any piece of legislation, and suggestions for communicating with legis-lators. The Board also chose to order tribute coins with the current color logo on one side and the original IPFA maltese cross logo on the other. Drawings have been approved and the coins will be available later this year. Three members expressed and interest in serving on the IPFA Board of Directors. Steve Iovinelli from Franklin Park, C.J. McCauley from Melrose Park, and Rich Weikal from Maywood were added to the Board a this meeting. If you are a member in good standing and would like to serve on the Board, please contact the office.

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2015 DOWNSTATE FIRE AND POLICE PENSION FUND EXPENSE DATA COMPARISONS

Greg Knoll, IPFA Executive Director

Illinois Professional Firefighters Association (IPFA) has moni-tored pension fund performance since the organization’s inception in 1959. The Association has a database of down-state fire pension data that includes: assets, liabilities, fund-ing levels and rates of return beginning in 1964. The Article 4 downstate fire pension fund system is one of 18 major re-tirement systems enabled by Illinois State Statute. With the increased scrutiny of pension fund performance in our state, IPFA chose to further research fund performance by studying the three major expense categories. The prior issue of the Size-Up provided details using 2014 data. This issue shows 2015 downstate police and fire data that was released late last year. The three expense classes studied were: benefit payments, administrative expenses, and investment expenses. Those expenses were compared to the net assets of each retire-ment system enabled by state statute. The results were better that 2014. What the membership has to keep in mind is the multiple retirement systems show below are all governed by state

statute, with little common language across all plans. Employer funding guarantees do not exist for most systems. The mechanics of the minimum funding guarantee for Arti-cle 3 and 4 is still being finalized. With many employers hiring independent actuaries to pro-vide alternate levy calculations, IPFA uses IDOI data because funding levels and levy amounts are calculated using the same formula for all of the 650+ Article 3 and Article 4 pen-sion funds. When you take the time to look into the numbers, you learn that a retirement system can use different assumptions for rate of return and other factors that will alter the funding level to make it appear higher or lower than other funds that uses different sets of assumptions. Remember that Article 3 and 4 funds do not have a common end of year fiscal month and tend to use conservative rates of return and other assumptions that lower our funding lev-els as compared to other state-wide systems.

In my opinion, it again seems that the data analysis doesn’t support comments I have heard concerning downstate pen-sion funds being “overly expensive to operate”.

The data shown below was edited to fit the space. The en-tire spreadsheet will be distributed at the spring seminar. If you are unable to attend, contact the office for a copy.

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2017 IPFA SPRING SEMINAR

On Friday, May 5, the 8th annual spring seminar will be held at Empress Banquets, 200 East Lake Street, in Addison, IL. Registration begins at 7:00 and the program begins at 8:00. Sessions this year include: Current Court Decisions, present-ed by IPFA Board Counsel Rick Reimer. He covers recent court decisions and other legal concerns having a potential impact to Article 3 and Article 4 Pension Boards. The next session will cover important dates for pension board operation. I will also cover individual participant key dates. The difference between Tier I & II benefits, and Article 3 and Article 4 language will be explained. The third morning session will cover Illinois Department of Insurance concerns. Presented by the Director of the Public Pension Division. She will cover items found in the 2015 and 2016 field and desk audits of various funds. Just before lunch Republican Representative Jeanne Ives of the 47th District will offer her opinions of different retire-ment systems in the State of Illinois. After the family style lunch, attendees will hear IPFA Legisla-tive Representative Mark Mifflin and Executive Director Greg Knoll cover legislation that may impact the fire service and downstate police and fire pension funds. The IPFA database of individual police and retirement funds has been updated with 2015 data so attendees will receive a copy of the funds assets, liabilities, funding level, and rates of return as shown by the department of insurance records and formulas. Up-dated data from the other 16 state retirement systems will also be reviewed. Another afternoon session will cover pension funds from a finance officer’s point of view. Included will be a life expec-tancy of police and fire personnel – the Skokie study.

boards. A continental breakfast is provided, along with break refreshments and a great family style lunch. IPFA Board Members will be present to conduct our 50/50 raffle, with all proceeds used to fund the three IPFA scholar-ships administered through the ICHIEFS Scholarship Founda-tion. The seminar flyer and registration form are on the IPFA web site. Illinois Professional Firefighters Association has been con-ducting seminars since 1971. This is our 8th Spring Seminar. We provide qualify Trustee Continuing Education at an affordable fee. IPFA hopes you choose to use our organiza-tion for your continuing education needs.

Information about disabilities in Illinois versus other states will also be covered. Bankruptcy to avoid pension obligations and the re-hire of retired employees will also be discussed. The final presentation on the program concerns the potential impact of the pres-idential election and interest rate changes on your fund’s equity and fixed income investments. As in the past, exhibitors will be present to provide information about the services they provide to individuals and pension

2016 ANNUAL REPORTS AVAILABLE

Office of the State Fire Marshal :

http://www.sfm.illinois.gov/Portals/0/docs/Misc-

EverythingElse/OSFMAnnualReport2016.pdf

Illinois Fire Service Institute:

https://www.fsi.illinois.edu/documents/annual%20report/FY2016.pdf

You are reading the Pension Board Secretary Edited Version of the Size-Up newsletter, a publication of Illinois Professional Firefighters Association. The table of contents on page 1 shows the entire contents of the newsletter that is sent to members of the Association. Some items are so important IPFA chooses to make all down-state pension board secretaries aware of the information. Please go to our website, learn about us, and consider joining IPFA to support our efforts.

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PENSION FAIRNESS for Illinois Communities

Last month a coalition of local government and business or-ganizations, along with a number of communities issued a 11 page White Paper report using the title shown above.

The executive summary contains language about inefficien-cies of the current system and several approaches to invest-ment and/or full consolidation.

The paper then goes on in an attempt to list what the group considers inefficiencies in the current system.

As IPFA staff began to confirm data and other items men-tioned in the paper, it became apparent that some costs and assumptions were made to exaggerate actual expense fig-ures.

One major calculation/assumption error on the coalition’s part resulted in a gross over-estimate of annual training obli-gations that are “placing a burden” on Illinois taxpayers. Actual cost figures from 2012 thru 2015 show that the coali-tion’s high range estimate was well over one million dollars too high per year.

Multiple agencies and organizations, including IPFA, provide

Continuing Education for Article 3 and 4 Trustees. The Coa-lition chose one of the most expensive training programs to estimate these expenses. Expenses for all 18 state enabled retirement systems are shown on the next page.

Another mis-speak in the white paper was the percentages equity investments for downstate funds.

IPFA has taken the position that the equity/fixed investment ratio as it is currently written does not allow for funds under $10,000,000 in assets to maximize interest income. Our point of view is to remove the ratio restrictions and let all downstate funds invest at up to a 65% equity / 35% fixed income investment ratio.

A study of 2014 investment returns indicated that the aver-age rate of return for downstate funds with assets in excess of $10,000,000 was 37% higher for downstate fire funds (7.18% v. 5.23%). Article 3 funds were 24% higher (7.39 v. 5.93%).

Removing the equity fixed-income restrictions would allow the smaller funds to have a substantial increase in their rate of return.

More information will be available at our 2017 Spring Pen-sion Seminar. We hope to see you there.

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PENSION COALITION UPDATE

The Pension Coalition is comprised of seven different organiza-tions representing fund participants, finance officers and mu-nicipal treasurers. Personnel from the Public Pension Division and Lauterbach & Amen also participate in Coalition meetings and activities. Our current Determination Letters are now valid indefinitely, provided we maintain compliance of the Article 3 and Article 4 plan documents with any IRS code changes. The purpose of forming the coalition was to work with the In-ternal Revenue Service to maintain the qualified plan status for ALL Article 3 and 4 funds. Imagine over 650 individual funds contacting the IRS, filing ap-plications and related forms or reports. Coalition efforts re-duce fees and expense to each individual fund by thousands of dollars. The key to the continued success of the Coalition is the individual fund contributions. Well over a hundred funds have not made payments in one or both of the filing cycles. Please go to http://lauterbachamen.com/Coalition.html to

make sure your fund has made contributions to cover the ex-

penses of both filing cycles.

APPELLATE COURT AFFIRMS

POLICE PENSION BOARD DENIAL OF LINE OF DUTY BENEFITS

FOR PHYSICAL FITNESS TESTING INJURY

Richard Reimer, IPFA Board Counsel

Swoboda v. Bd. of Trustees of the Village of Sugar

Grove Police Pension Fund, 2015 IL App (2nd) 150265

The Second District Appellate Court recently issued a deci-sion affirming the Pension Board’s determination to deny line of duty benefits to an officer who suffered a disabling injury during physical fitness testing.

The Board of Trustees of the Village of Sugar Grove Police Pension Fund (“Board”) reached a decision to deny the ap-plication for line of duty benefits of Officer Thomas Swoboda who suffered a disabling injury to his shoulder during physi-cal fitness testing. Swoboda was attempting to bench press approximately 200 pounds when he injured his shoulder. The department physical fitness testing only required offic-ers to bench press 75% of their body weight, up to a maxi-mum of 175 pounds, or do 30 push-ups consecutively.

The Pension Board determined Swoboda was not injured performing an “act of duty,” as defined by Section 5/5-113

of the Pension Code. The Appellate Court confirmed an act of duty requires an officer to be performing an act which involves either a “special risk” or be “imposed by statute, ordinance, or police regulation.” The Pension Board made no finding as to whether the physical fitness testing was “an act imposed by statute, ordinance, or police regulation.”

Instead, the Pension Board found the bench press exercise did not constitute a special risk not ordinarily assumed by a citizen in the ordinary walks of life.

The Appellate Court agreed with the Pension Board’s finding that many civilians in all walks of life routinely exercise and lift weights for work or personal reasons. The Appellate Court noted,

“Citizens in ordinary walks of life engage in weightlifting. Whether they do so occupationally or recreationally is of no moment. The risk of sustaining a weightlifting injury is not a ‘special risk’.”

Reimer Dobrovolny & Karlson represented the Pension Board in this matter.

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Illinois Professional

Firefighters Association

188 Industrial Drive, Suite 134

Elmhurst, IL 60126-1608

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ELMHURST, IL

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