Local lawmakers sign onto new pension fix plan
By Susan Frick Carlman email@example.com February 28, 2013 9:54AM
Updated: April 2, 2013 6:22AM
Area legislators launched a fresh attack on the state’s pension crisis Wednesday with a bipartisan bill designed to address earlier efforts’ shortcomings.
Introduced by House Republican leader Tom Cross, R-Oswego, and District 57 Rep. Elaine Nekritz, D-Buffalo Grove, House Bill 3411 quickly took on another 29 General Assembly cosponsors, including 41st District Rep. Darlene Senger, R-Naperville, who called its provisions “a fair and equitable compromise.”
Also among those who signed onto the proposal, which was forwarded to the House Rules Committee, are 81st District Rep. Ron Sandack, R-Downers Grove; 47th District Rep. Patty Bellock, R-Westmont,;and 50th District Rep. Kay Hatcher, R-Yorkville.
Among the new ideas incorporated in the measure are the application of cost-of-living adjustments to the pensioners’ first $25,000 of retirement benefit when the public employee turns 67 or has been retired for five years, whichever occurs first. The bill creates a Tier 3 for university and school district employees that defines contributions and benefits for those hired in 2014 and afterward, and some current retirement system members, and shifts a portion of the responsibility for funding the plans to the participants’ employers. When implemented, the new level will replace the current Tier 2 established four years ago, Senger said.
Under the bill, the new employees would divide their contributions between the Teacher Retirement System and a newly established 401(k) benefit, and employees would then negotiate their local districts’ contributions. Senger characterized the pair of retirement funding mechanisms as a potential win-win.
“Now for new hires coming in, you basically have a defined benefit which is roughly half of what they have now,” she said, adding that districts have been clamoring for more control over their employees’ retirement benefits. “Because teachers do not receive Social Security, this brings them about equal to what they would receive in Social Security (benefits). ... Now if you’re in the process of negotiating, this gives another point for negotiation.”
Also in the bill are funding guarantees that can be enforced by legal action if necessary, and the provision of $1 billion in annual funding for the university and teacher retirement systems, beginning in 2020 and continuing until they are fully funded.
The state’s pension system currently has the largest unfunded balance in the nation, at about $97 billion.
Reached by phone Thursday morning, Senger — who has been taking part in working groups trying to fix the problem and is currently the spokesperson for the GOP legislators involved in the effort — was anticipating a lively exchange when the General Assembly convened later in the day. House Speaker Michael Madigan, D-Chicago, added four amendments to the bill late Wednesday “that don’t do anything,” Senger said.
Two of the added measures would pause cost-of-living adjustments. Another would require all state employees to work to age 67, including state police, and the fourth would increase employees’ TRS contributions by five perscent.
“It’s going to be very interesting today,” Senger said.
Overall, however, she was encouraged by the newest proposal in a string of pension pitches.
“This is the first time we’ve put a bill together that has so many members on it, out of the gate,” she said.