(Chicago) – Extra: Senate President John Cullerton (D-Chicago) re-launched the Illinois pension reform drama with the first bill introduced in the new Illinois Senate.
On Wednesday’s inauguration of the new 98th General Assembly, after being battered with critical news media coverage of the lame, lame-duck session, Cullerton unveiled his reform plan, Senate Bill 1, that seeks to reform six state pension systems – the General Assembly, the Illinois Municipal Retirement Fund, State Employees, State Universities, Downstate Teachers, and the Judges.
The bill aims for the pension systems to be fully funded by 2043.
The senate president’s legislation, in which Cullerton is currently the only sponsor, contains a literal “Plan B” built into the bill if a portion – “Part A” – is thrown out by a court as “unconstitutional”.
Cullerton’s “Part A”, caps pensionable salary, temporarily suspends and reduces the amount of automatic annual increases and increases required employee contributions.
Specifically, the bill suspends additional COLAs until January 1, 2020, sets a salary cap for pension purposes equal to the Social Security benefit base (currently $113,700), increases employee contributions by 2%, and sets a funding goal of 100% funding by Fiscal Year 2043.
When COLAs are allowed in 2020, the maximum COLA is $600 for members in Social Security and $750 for those without social security.And a member must be 67 to receive a COLA.
The sweetener for AFSCME?
The State’s contribution will also become an enforceable obligation.
In “Part B”, Cullerton’s bill requires employees to chose either to accept reductions in the amount of, as well as delays in eligibility for, automatic annual increases or to give up certain healthcare benefits and future increases in pensionable income.
Specifically, GARS, SERS, SURS, and TRS tier I employees and retirees in these systems will have to choose either to accept a Tier II COLA for their annuity and delay when the COLA first applies or to maintain the current COLA, but they will lose retiree healthcare. Any future salary hikes will not qualify as “compensation.”
Additionally, judges and IMRF are left out of Cullerton’s overhauls. The bill addresses the funding streams for judges and abuses in IMRF, but the larger reforms are not applied to those systems in this bill.
Cullerton’s bill is currently sitting in the Assignments Committee.
The Senate, which is in session on Thursday, January 10 – the only day in January – returns full-time to Springfield on February 5.