Lombard 'very confident in the numbers' despite actuary's suspension, village finance official says
Lombard is taking positive steps in the wake of news this past summer about actuary Timothy W. Sharpe's suspension that prompted one lawmaker to call for pension plans to be recalculated and reviewed, a village finance official said during a recent interview.
"After we were notified of Mr. Sharpe's suspension, the Village of Lombard sought proposals from actuary firms involved with police and fire pension funds in Illinois," Lombard Finance Director Tim Sexton told DuPage Policy Journal. "We received proposals from several firms, and are in the process of awarding a contract for the selected actuary."
The contract is coming soon but no time is being wasted getting the new actuary up to speed in Lombard, Sexton said. "We have discussed the previous actuary reports with the newly selected actuary and they are comfortable with the numbers and assumptions that were used and do not anticipate the need for any changes," Sexton said.
Lombard's action is likely to calm many a nerve among those closely affected by the village's pension funds. In late August, Illinois state House Rep. Allen Skillicorn (R-East Dundee) publicly called for recalculation and review of Illinois pension plans that Sharpe had been involved in.
"You cannot begin to address a problem if the magnitude isn't fully understood," Skillicorn said in his Aug. 29 statement calling for the recalculation and review. "With the suspension of Mr. Sharpe, it is imperative that we conduct a review and recalculation of every pension he was involved in. The state of Illinois carries a massive unfunded pension liability that is estimated to be anywhere from $150 billion to $250 billion affecting our credit rating, which is just barely above 'junk' status, while many municipalities are severely underfunded as well. The public has a right to know if the situation is even worse."
Skillicorn has represented the 66th State House District since he first was elected to the seat in 2016 and he ran as an unopposed incumbent during this month's midterm elections. The 66th State House District is located within Kane and McHenry counties and includes much or all of Huntley, Lake in The Hills and Algonquin.
Sharpe received a two-year suspension from the American Academy of Actuaries on Aug. 20, according to a notice of public discipline issued by the academy the same day. Sharpe received the suspension "for materially failing to comply" with portions of the academy's code of professional conduct, including provisions regarding honesty, integrity and competence, according to the notice.
At the end of his two-year suspension, if Sharpe wants to resume membership in the academy, he will have to undergo academy professionalism that will result in an academy reinstatement.
Sharpe's suspension garnered attention outside the academy because of valuations he performed on behalf of several municipal police and fire pension plans in the state. Sharpe also was working on pensions in the state prior to his suspension, while complaints against him were being investigated by the academy.
Sharpe and the academy have been at odds before his suspension. In January, a federal judge dismissed a lawsuit filed by Sharpe against the academy in which he sought damages and injunctive relief from "alleged unlawful dissemination of information regarding Mr. Sharpe's disciplinary proceeding within the organization."
The controversy and concerns around Sharpe's suspension isn't likely to touch Lombard, Sexton said.
"The Village of Lombard's police and fire pension plans are at a funding level that is much higher than the state average," Sexton said.
The most recent Illinois Department of Insurance Public Pension Division Biennial Report showed an average funding level of more than 57 percent for all fire pension funds and almost 58 percent for all police pension funds, Sexton said.
"From that same report, Lombard Fire Pension Fund is 76.14 percent funded, and the Lombard Police Pension Fund is 68.20 percent funded," Sexton said. "It should be noted that these valuations from this state report are calculated by the Illinois Department of Insurance, Public Pension Division's enrolled actuary, and not Mr. Sharpe. Therefore, we are very confident in the numbers."