Normal trims extra police and fire pension payments while keeping 2040 100% funding goal

Town of Normal finance staff told the council they would reduce some supplemental payments to police and fire pension funds as part of the proposed FY25‑26 budget but reaffirmed the town’s internal goal to reach 100% funding by 2040. Staff said the state requires 90% funding by 2040.

During the meeting Finance Director Mr. Heun said the town had previously made extra pension payments when surpluses occurred and that the proposed budget reduces those extra payments by about $2,000,000 compared with the prior plan while keeping a $1,000,000 supplemental contribution this year. Heun explained the distinction between the ongoing annual pension cost and the “catch‑up” payments aimed at reaching the 100% goal.

Heun and staff estimated the budgetary impact: current combined pension contributions for police and fire run about $8–9 million annually while the recurring annual cost after achieving 100% funding would be roughly $1 million a year. "Once we have completely funded the catch up, once that falls off, we're just paying the annual increase in liability for that pension plan," Heun said.

Why it matters: the catch‑up payments materially increased pension contributions in recent years, and reducing extra payments is one of the levers staff are using to absorb a sales‑tax revenue decline without cutting core services.

Council members asked whether the 100% by 2040 target is a state requirement; staff answered that the state requires 90% by 2040 and that the town has set the higher 100% internal goal. No formal vote was taken on pension policy at the session.