Serving Illinois State Employees Since 1923

Monday, May 6, 2013

Pension Update

An agreement concerning pension legislation has been reached with Senate President Cullerton. Attached is a summary of what was agreed upon by Senate President Cullerton and the We Are One Coalition.
As you are aware, the House passed Senate Bill 1, now called the Madigan bill, which we feel is both unfair and unconstitutional. The details of the Madigan plan have been well documented, but are also included on the attachment. The Governor has stated he will sign Senate Bill 1 if it passes the Senate. Earlier a bill similar to Senate Bill 1 received 23 votes in the Senate. It takes 30 votes for a bill to pass the Senate. If Senate Bill 1 were the only option, we fear it might attract 6 more votes and then we have disaster. We do believe the Madigan bill is unconstitutional, but don’t want to gamble on a law suit, too much is at stake.
We all agree something must be done to salvage Illinois’pension plans. Yes, our members did not create this problem, but to believe the legislature would pass a bill that solely raised taxes enough to reduce the unfunded pension liability would be foolish. The Madigan Plan goes too far! Although not included on the attachment, the Cullerton bill guarantees state funding of the pension systems.
This afternoon, Cullerton will meet with his caucus to discuss this plan, He will endorse the bill. We have also demanded Senate Bill 1 be killed. We wanted to share a copy of the agreement at the same time it was released to Senate members.
If you have questions, please feel free to reply to this message. Please understand we are sending this email to every member of the local union that we have an email address for. If you do have questions, we will respond as quickly as possible. If there are a lot of questions, we may send out a blanket response to the entire membership, please be patient.
The new legislation will be Senate Bill 2404.
Below is the information. We have also sent you the following in a document over email.
Choice A:

·         3 percent simple COLA

·         Two year delay in receiving COLA for active state employees upon retirement

·         Receive retiree healthcare

·         Enrollment in optional cash balance plan on a pre-tax basis by making irrevocable election to join plan after choosing Choice A

·         Eligible for ERO (TRS only not SERS)

·         All future salary increases offered as pensionable


Choice B

Option 1:

·         3 percent compounded COLA

·         Three year delay in receiving COLA for active state employees upon retirement

·         Agree to  2 percent contribution increase

·         Receive retiree healthcare

·         All future salary increases offered as pensionable


Choice B

Option 2:

·         3 percent compounded COLA

·         No retiree healthcare

·         Future salary increases offered as non-pensionable


Choice for Retirees

·         Choose two year freeze on compounded COLA in non-consecutive years and continue to receive retiree healthcare

·         Choose to keep 3 percent compounded COLA without freeze and forego access to retiree healthcare


Senate Bill 1 (Madigan Plan)

·         Increase retirement age from 1 to 5 years for employees under 45 years of age

·         5 year or age 67, whichever comes first wait to receive COLA upon retirement

·         New formula to determine amount COLA to be based on, $1,000 per year of state service multiplied by 3 percent simple for most employees

·         Wage cap of $109,971 for determining retirement benefit.


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