Illinois Governor Pat Quinn unveiled a plan to overhaul the pension system for state employees.
It would force state workers to choose between two plans, both of which would reduce their benefits.
If employees voluntarily go along with the governor's proposed changes, they would have to pay more into their retirement plans, work longer before they retire, and face reduced cost-of-living adjustments in retirement.
Galesburg Mayor Sal Garza is forming a 14-member task force to develop funding options for the city's pension funds.
“If it goes unchecked and unaddressed, we may find ourselves in the same kind of condition that the state of Illinois' overall pension system is in,” Garza said.
City leaders said the funding ratio has dropped over the past decade for the three pension funds in which the city participates. Garza said Galesburg will need to dip into its general revenues to pay pension obligations if something is not done.
A public policy group at the University of Illinois says the State University Retirement System (SURS) needs to be stabilized but not reformed.
The Institute for Government and Public Affairs proposal includes contributions from universities to the fund for the first time. The plan calls for universities to phase-in their contributions until they reach 3% in the third year.
Galesburg Mayor Sal Garza said the city is developing a strategy to avoid the same pension system headaches plaguing the state.
Illinois has billions of dollars in unfunded pension liabilities. While Galesburg's obligations are nowhere near those amounts, Garza is concerned that the police and fire pension systems are receiving less than 60% of what they should be getting from the city.
The city's IMRF (Illinois Municipal Retirement Fund) is at 90%, and Garza would like to bring the police and fire systems up to that level.