City asks thousands of Chicago police officers to pay pension mistake

Thousands of Chicago police officers got a junk letter from their pension fund this week: Thanks to a payroll error fueled by the officers’ latest contract, roughly 3,000 are being asked to cut a check to their pension fund. plus interest.

The Fraternal Order of Police, Lodge 7, which represents most high-ranking police officers, said it planned to file a complaint about the error so the city would have to pay that interest fee instead of the workers.

The flub is hitting Level 2 members of the Chicago Police Pension and Benefit Fund, those who started working for CPD in or after January. 1, 2011. These members make up approximately half of the fund’s more than 12,000 active members. Sworn officers contribute 9% of their salary to their pension, which is automatically deducted from their paychecks.

PABF, in a letter to members, said the error was due to a fiscal year mismatch with the city.

This letter serves to inform you of a shortfall in payment of your pension contributions, says the message from PABF Executive Director Kevin Reichart. Due to a fiscal year discrepancy with the City of Chicago, the retroactive salary contract payment you received on 1/1/2022 has been calculated by the City into your 2022 annual salary cap.

As part of the new contract for Chicago police officers approved by the City Council in late 2023, union members received a 2.5% base pay increase that was retroactive to early 2022.

According to a post on the fund’s website, the city withheld 9% of the members’ due salary and duty availability pay for the requested payment.

Reichart did not respond to a request for comment, nor did the city’s Finance Department.

According to state law, the fund must receive the required contributions, plus 3% interest. Members are required to sign an acknowledgment letter and receive a check to PABF for the salary cap correction.

Failure to pay until August. 31 means that the principal amount plus interest would be withheld towards the pensioner’s pension payments when they retire. The union says the fee for some members is about $80 and for others as much as $1,300.

I know nobody likes getting a bill and this should never have happened, FOP President John Catanzara said in a video posted on the union’s YouTube page Monday. He blamed incompetence on the DMK’s Finance Department and chided the pension fund for not bringing the matter to the attention of members earlier.

The union will file a class-action grievance asking the city to pay the 3% interest charge the pension fund is seeking to slap on our officers, Catanzara said.

Given that those workers paid state and federal income tax on those earnings, Catanzara said the city should also refund the equivalent of the taxes charged on that income.

I don’t know where this all ends. It’s very disappointing where we were with this department and this administration, Catanzara said.

PABF is among the city’s lowest-funded pension funds, with enough assets to cover 21.76% of its liabilities by the end of 2022.

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