Wednesday, February 27, 2013

Pension-Cutting Amendments in the Illinois House of Representatives

(A Call for Action from the We Are One Coalition of Illinois)

On Thursday, the House will be considering a series of pension amendments – all of which devastate the pensions that public workers paid and toiled for years to earn. The amendments are as follows:

House Bill 1154, Amendment 1: Completely eliminates cost-of-living adjustments (COLAs).

- This amendment leaves senior citizens defenseless against inflation.

House Bill 1154, Amendment 2: Eliminates COLAs unless an individual system is 80% funded.

- Thanks to the state’s fiscal irresponsibility in underfunding the pension systems, this amendment also effectively eliminates COLAs for a generation of retirees since the systems are not projected to reach 80% until the 2040s.

House Bill 1165, Amendment 1: Broadly and immediately raises retirement age to 67.

- There is no graduated phase-in for older workers, and no consideration of the hard labor performed by many public workers in physically strenuous jobs – for example, public safety officers, corrections officers, and nurses.

House Bill 1166, Amendment 1: Increase employee contributions by 5%.

- This is well over the 2% increase offered by the coalition that is strictly contingent on a balanced solution that includes an ironclad funding guarantee and revenue. A 5% increase would result in Illinois systems having the second-highest employee contribution rate in the nation, according to a Boston College survey.


Tell your state representatives not to devastate the pensions that public workers faithfully paid for out of every paycheck – even when the state did not.

Tell them not to devastate the pensions that retirees rely on as their most reliable source of retirement security – particularly the many public sector retirees who do not receive Social Security, such as teachers, state university personnel, and public safety workers, to name a few.

Tell them to get to work with the We Are One Illinois coalition of unions and to support a fair, constitutional solution backed by the coalition – like HB 3162 and SB 2404! (Read on for the details on these bills.)

Coalition-Supported Bills: HB 3162 and SB 2404

The We Are One Illinois union coalition is proud to announce its support for House Bill 3162 and Senate Bill 2404, identical bills that contain essential pieces of the coalition’s framework plan. Unlike many other proposals, HB 3162 and SB 2404 are fair and constitutional. The bills have three parts:

1. An Ironclad Funding Guarantee. For decades, Illinois politicians shorted payments to the pension systems, even as public workers faithfully and consistently paid their fair share. To ensure that today’s politicians cannot repeat the mistakes of their predecessors, HB 3162 and SB 2404 contain an ironclad funding guarantee. If the state fails to make its full payment, the retirement systems – or their members – can sue to ensure proper payment.

2. The Pension Stabilization Fund. HB 3162 and SB 2404 dedicate revenue to pay down the state’s pension debt. In short, revenue currently being used to pay off the state’s pension obligation bonds would be committed to the pension systems after the bonds are paid off.

3. Shared Sacrifice. Public employees are not to blame for Illinois’ pension problem, but they are willing to be part of the solution. With an ironclad funding guarantee to ensure pension shortfalls will never happen again, Tier 1 employees would be prepared to contribute an additional 2% of salary, phased in over the next two years, for their retirement.

HB 3162 features bipartisan support, led by Rep. Jay Hoffman (D-Belleville), Rep. Raymond Poe (R-Springfield), and Rep. Bill Mitchell (R-Decatur). A diverse set of six state senators are sponsors or co-sponsors of SB 2404 – Sen. Linda Holmes (D-Aurora), Sen. Pamela Althoff (R-McHenry), Sen. Melinda Bush (D-Grayslake), Sen. Toi Hutchinson (D-Olympia Fields), Sen. Kimberly Lightford (D-Maywood), and Sen. Mike Jacobs (D-Moline). Our coalition is working to add more co-sponsors to both bills. We also continue to work on additional framework solutions, such as closing corporate tax loopholes to generate $2 billion in new revenue…

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