Illinois House to Consider Pension Reform Bills

The Illinois House Personnel and Pensions Committee on May 16 passed bills that would expand retirement plan coverage and change public pension plan funding and how payments are made.

The bills are identical. In what is perhaps a demonstration of bipartisan support for the legislation, Rep. Jim Durkin (R-Burr Ridge), the House Republican leader, introduced House Bill 4027 on March 24; Rep. Barbara Flynn Currie (D-Chicago), the House Majority Leader, introduced House Bill 4045 on May 8. The bills are now before the full House.

The State Journal-Register reports that the legislation builds on reform ideas from high-level state officials of both major parties: Gov. Bruce Rauner (R ) and Senate President John Cullerton (D-Chicago.

The legislation would:

• Require active Tier 1 employees who were enrolled in tier 1 of the State Employees Retirement System (SERS) to elect either to have automatic annual increases in retirement and survivor's annuities delayed and reduced, or to maintain current benefits except for additional limits on pensionable salary. It also provides additional benefits to persons electing item 1.

• Make funding changes, including shifting certain costs to employers.

• Restrict participation in the General Assembly Retirement System to persons who became participants before the effective date. 

• Require some parts of SERS to offer an optional accelerated benefit payment to certain members instead of a pension.

• Require a defined contribution plan for certain SERS members and establishes similar benefits if the governing body of the unit of local government adopts those benefits.

• Require the state to contribute $215,200,000 for fiscal year 2017.

• Provide a continuing appropriation for the state contribution and for certain consideration payments.

• Provide for the transfer of certain amounts to the Pension Stabilization Fund.

• Amends the Illinois Educational Labor Relations Act and the Illinois Public Labor Relations Act to prohibit bargaining and interest arbitration regarding certain changes made by the amendatory Act.

The legislation would go into effect immediately upon enactment.

But whether it will be is not certain, according to the State Journal-Register, which reports that public employee unions may not support it and that several members say they will not commit to support them because they contend there are questions about the legislation still to be answered. And it points out that at least two committee members voted against both bills in the committee proceedings.