Conference Committee Pension Reform Proposal (SB 1)
The Conference Committee on Pension Reform was created to address the growing $97 billion unfunded pension liability, the ever increasing General Revenue funds that must be used to meet pension obligations, and the “crowding out” effect that it was having on funding for other state services.
After months of negotiations the Conference Committee has proposed the following benefit and funding reforms to save the state approximately $160 billion in contributions over the next 30 years, in addition to lowering the immediate unfunded liability by $21-$23 billion.
Benefit Reform – Estimated $92 billion in Savings
Retirement Age Increase
For those 46 and older, there is no increase in retirement age. For every year before the age of 46 an additional four months is added to the retirement age. For example:
- For those 45 - normal retirement age plus 4 months.
- For those 40 - normal retirement age plus 24 months.
- For those 35 - normal retirement age plus 44 months.
- For those 31 and under - normal retirement age plus 60 months.
Effective Rate of Interest (ERI)
Lowers the "effective rate of interest" (ERI) used to calculate TRS' and SURS' "money purchase formula" benefits, which retirees may take as an alternate if it exceeds regular benefits. The effective Rate of Interest and Regular Interest for SURS and TRS will now be equal to interest on 30-year US Treasury Bonds plus 75 basis points.
Implement Salary Cap
Will implement a salary cap for Tier 1 Active Members at the member’s salary when the changes become effective, or the Tier 2 Salary Cap, whichever is greater. The current Tier 2 Salary cap is equal to $109,971 and is assumed to grow at ½ CPI per year.
Cost of Living Adjustment (COLA)
For all Tier I active members, inactive members, and annuitants, the automatic annual increase will be equal to 3% of $1,000 multiplied by years of service for members not receiving social security, and 3% of $800 multiplied by years of service for members who do receive social security.
Members with an annuity of less than $1,000 (without social security) or less than $800 (with social security) , multiplied by the number of years of service , will continue to receive an automatic annual increase equal to 3% compounded each year until their annuity reaches the maximum amount.
Each year’s new COLA will be paid on top of the previous year’s total annuity with COLA included. For example, with an assumed $50,000 annuity upon retirement in FY15:
1st year: 3% x $1,000 x 20 yrs of service = $20,600 ($600 COLA)
1st Year TOTAL ANNUITY: $50,600
2nd year: 3% x $1,030 x 20 yrs of service =$20,618 ($618 COLA)
2nd Year TOTAL ANNUITY: $51,218
3rd year: 3% x $1,061 x 20 yrs of service = $21,220 ($637 COLA)
3rd Year TOTAL ANNUITY: $51,855
The COLA will also have a staggered delay, occurring every other year beginning with the 2nd year, for retirees and current employees:
- Ages 50 and over — 1 year COLA delay/skip
- Ages 47-49 — Staggered 3 year COLA delay/skip
- Ages 44-46 — Staggered 4 year COLA delay/skip
- Ages 43 and under — Staggered 5 year COLA delay/skip
“I am pleased we were successful in passing pension reform through the General Assembly today in order to save retirements and protect Illinois taxpayers. This bi-partisan proposal will go a long ways towards putting our state back on solid financial footing, but it does not mean our work is done. We must continue to demonstrate fiscal discipline over the next several years to control spending, and pay down our bills if we ever hope to allow the ‘temporary’ tax to expire and to bring jobs back to Illinois.”
- House Republican Leader Jim Durkin
State Representative Jim Durkin (R-Western Springs) is joining forces with the wine and spirits industry to promote the “We Don’t Serve Teens…and You Shouldn’t Either” campaign to protect teenagers from the dangers of underage drinking.
“Most teens who drink are provided the alcohol from parents of other teens, older siblings, friends and relatives,” said Durkin. “Giving alcohol to teenagers not only undermines the efforts of parents to protect their children, it’s breaking the law.”
We Don’t Serve Teens is a national campaign to reduce underage drinking. The focus is on educating social sources that may provide teens with access to alcohol. The centerpiece of the campaign is www.DontServeTeens.gov, a website sponsored by a coalition of public and private sector organizations, including the Federal Trade Commission, the nation’s consumer protection agency. The message to neighbors, relatives and friends is “Don’t serve Alcohol to teens. It’s unsafe. It’s illegal. It’s irresponsible.”
Drinking can cause serious health and safety consequences – as well as legal consequences for the person providing the alcohol. For more information on stopping teens’ easy access to alcohol, practical tips on talking to kids about alcohol and alcohol advertising, and what to say to friends and neighbors about serving alcohol to teens, visit www.DontServeTeens.gov.
Governor Quinn Adds Six Counties to State Disaster Declaration
Volunteer Efforts Underway to Assist Victims of Recent Tornadoes; Department of Insurance Offering Free Counseling in Washington
SPRINGFIELD – Governor Pat Quinn today declared Douglas, Jasper, Pope, Wabash, Wayne and Will counties state disaster areas following violent storms and tornadoes on Sunday that affected several regions of the state. The declaration increases the number of declared counties to 13. On Monday, Governor Quinn declared Champaign, Grundy, LaSalle, Massac, Tazewell, Washington and Woodford counties state disaster areas after a severe storm system ripped across Illinois, spawning at least two EF4 tornadoes.
“Yesterday I saw firsthand the devastation caused by these deadly storms,” Governor Quinn said. “While the recovery will be long and hard, we will work in the coming days, weeks and months to assist these communities and help the people who live there rebuild their lives."
On Monday, Governor Quinn personally inspected the damage in some of Illinois' hardest hit communities: Washington, Diamond, Gifford, Brookport and New Minden.
The state disaster declaration makes available a wide variety of state resources that can help affected communities respond and recover from the storms. The state of Illinois has personnel and assets that can be mobilized to help local government officials with disaster recovery, including such things as trucks, heavy equipment to remove debris, communications equipment and provide assistance with security and other public safety issues.
Governor Quinn also announced that volunteer efforts are well underway to assist the victims of the November 17 tornadoes that devastated several communities in Illinois. Financial donations to volunteer disaster response agencies are the best way to help. Cash donations allow these agencies to purchase exactly what is needed, when it is needed. If materials are donated, they should only be those items specifically requested by officials, and these should be brought to officially designated collection centers.
Those who wish to volunteer in person should not go to the disaster scene, since there are far more volunteer offers than there are volunteer needs, and the arrival of unexpected volunteers will interfere with recovery efforts. Volunteers should first go to a reputable volunteer agency that is responding to the disaster, and they will be assigned when and where their services can best be used. Volunteers should be patient and wait until they can be adequately trained by relief agencies. The most crucial need will be for volunteers during the long-term recovery phase, which could last for several months.
Volunteer information for specific areas is listed below. For more information visit Ready.illinois.gov for information on specific sites that can utilize volunteers.
- Gifford (Champaign County). American Red Cross-Central Illinois chapter, (217) 351-5861.
- Coal City (Grundy County). Coal City High School, Mr. Rich Kapinus, (815) 207-0926.
- Washington County. No need for volunteers or donations at this time.
- City of Washington (Tazewell County). Call (309) 573-4035.
In addition, the Illinois Department of Insurance (DOI) will offer free one-on-one insurance counseling services to assist Washington residents recovering from the November 17 tornado. DOI staff will help individuals with the insurance claims process by providing information on how to properly document storm damage, whether to make temporary repairs, what a consumer’s homeowner policy covers and what to expect during the claims process.
The first day of counseling will take place on Tuesday, November 19 in the Wal-Mart Supercenter parking lot at 1980 Freedom Parkway in Washington. Those seeking assistance should arrive by 10 a.m. DOI staff will offer free counseling daily thereafter from 9 a.m. to 4 p.m. If available, consumers should bring an inventory of contents, policy information and all documentation they have received from company adjusters or public adjusters.
Other state assistance to impacted communities to date includes:
- Four Technical Rescue Teams were sent to Washington.
- One Technical Rescue Team was sent to Gifford.
- Two three-man engine companies will work 12-hour shifts through Wednesday in Gifford to provide much-needed relief to the town’s firefighters.
- More than 40 light towers have been delivered to assist with nighttime operations in Washington (26), Pekin (6), Gifford (10) and Brookport (2).
- Command vehicles have been deployed to Washington and Pekin to support response operations.
- Law enforcement support has come from the Illinois State Police, Illinois Department of Natural Resources conservation officers and Illinois Commerce Commission officers.
- One five-person Emergency Management Assistance Team support trailer and 10 Starcom radios have been provided to Brookport.
- 40 Starcom 21 radios have been provided to assist Washington responders with emergency communications.