Economy & Finance

Illinois House committee OKs pension overhaul plan

• Bookmarks: 4

— A long-awaited plan to address Illinois’ worst-in-the-nation pension problem cleared an early hurdle Monday when an Illinois House committee approved a proposal that freezes cost-of-living increases and calls for higher employee contributions.

Members of a pension committee voted 6-3 to give the go-ahead to the plan backed by Gov. Pat Quinn and House Minority Leader Tom Cross, sending it on to the full House for a floor vote. The plan received four Democratic votes and two Republican votes.

The plan emerged over the weekend when the House reconvened for the final days of the lame-duck session. New lawmakers are sworn in Wednesday, the day Quinn had set as a deadline for pension legislation.

The measure moves to the floor but when it’s called for a vote is uncertain. There are enough changes in the legislation that supporters don’t know how many rank-and-file votes they can muster.

The state’s unfunded pension liability is estimated at roughly $96 billion, and Quinn says the deficit grows by $17 million a day. The piling debt has hurt the state’s credit rating, limiting its ability to borrow. It also has eaten up more and more money for education and other public services.

The amended pension bill, sponsored by Democratic Rep. Elaine Nekritz, would not award annual cost-of-living increases until the age of 67 and would increase employee contributions by 2 percent of salary, spread over two years. Once cost-of-living increases take effect at 67, they would be applied only to the first $25,000 of a retiree’s pension.

It also would require the state to fully fund its portion of pensions under threat of legal action by the accounts’ administrators.

That’s key to hundreds of thousands of workers and retirees who have been forced to pay their share over the years. The huge shortfall followed decades of inattention by lawmakers and governors to save up for state workers’ retirement plans, including years where they skipped payments.

Various plans have been floated in the past year for bumped-up contributions and less-generous benefits for current employees, raising the retirement age and reducing cost-of-living adjustments for retirees. But the “cost shift” of the employer portion of teachers’ pensions from the state to school districts has stymied attention.
4 recommended
comments icon0 comments
0 notes
bookmark icon

Write a comment...

Your email address will not be published. Required fields are marked *