• Pensions take center stage in House

    by  • February 28, 2013 • News • 0 Comments

    Illinois Senate President John Cullerton is on board with the newest Illinois House pension solution plan.house floor

    Spokeswoman Rikeesha Phelon says the Chicago democrat plans to amend his proposed pension fix with language from a bipartisan House plan announced yesterday. But Cullerton would retain other provisions he says would ensure the plan’s constitutionality.

    House republican leader Tom Cross and Democratic Rep. Elaine Nekritz say their plan would reduce the state retirement systems’ $96 billion debt by 30 percent and eventually move the state away from funding teacher and university professor pensions.

    The new twist would make public school and university employees enter a system that includes a 401(k)-style plan and negotiated contributions by the local employer.

    Cross says his plan would move the state from a defined benefit to a combination of a “defined benefit” plan coupled with a “defined contribution” plan.

    Features of the plan include higher contributions, an increased retirement age, and cost of living adjustment restrictions. Supporters say they believe it can pass a constitutional test, but cross acknowledges anything which passes will wind up in court anyway.

    And state employee unions are already gearing up against the proposal, notifying members of possible legislation that would strip state employees of their right to collective bargaining over health care costs and benefits.

    They warn the measure is a direct attack on state workers’ fundamental right to collective bargaining. Negotiating health care benefits and coverage is just as vital as bargaining over wages and other benefits.

    House to address pension amendments

    But on Thursday, Illinois house members will be asked to vote on a series of state pension changes, including proposals to require much higher employee contributions and eliminate retirement benefit increases.

    There are four amendments that will be addressed; one would end cost-of-living adjustments to pension benefits for anyone hired before Jan. 1, 2011. Retirees now receive a 3-percent compounded cola annually.

    Another amendment would stipulate that colas would be eliminated until the pension systems achieve an 80-percent funding level. Currently the five state-funded pension systems are funded at about 39-percent.

    A third amendment would raise the retirement age at which a person could collect full pension benefits to 67.

    And a fourth amendment would increase working employees contributions to their pensions by 5-percent of salary, in addition to what they are already paying into the system.

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