Madigan’s Pension House Amendment to Cullerton's Senate Bill 1

According to a fact sheet distributed by Madigan’s office, House Amendment 1 to Senate Bill provides for: [This amendment passed out of committee 9-1. It will go to the House floor.]

• A new funding schedule requiring pension systems to be fully funded by 2044;
• A new method for certifying contributions beginning FY15 to average costs evenly over a pensioner’s employment;
• Supplemental annual contributions of $1 billion beginning in FY20 until all pension systems reach their funding goal;
• A funding guarantee to each pension system;
• A pensionable salary cap for Tier I employees similar to the Tier II cap;
• A new method of calculating the COLA based on a proposal by Sen. Christine Radogno in an amendment to SB 35;
• A delay in first or next year COLA increases to age 67 or the fifth anniversary of retirement;
• An increase in retirement age for employees under 45 years old;
• A graduated increase in employee contributions by one percent in July 2013 to two percent by July 2014;
• A prohibition on collective bargaining with regards to pension-related items;
• A prohibition on non-governmental organizations from participating in state retirement systems;
• A change in the effective interest rate;
• Prohibition on the use of pension funds to pay costs associated with health care; and
• Requirement for separate appropriation requests for normal costs and amortization of the unfunded liability.

from NIU’s State Pension & Budget Update website

“…A coalition of state public labor unions slammed the proposal.

“’While we want to work together to solve the pension problem, the amendment filed today by the House Speaker represents the same illegal approach to slashing hard-earned life savings protected by the Illinois Constitution,’ a statement from We Are One Illinois said.

“The group also warned that if the measure becomes law, ‘we believe a successful legal challenge is all but certain, with the bill saving nothing and the state's budget problems made worse.’

“The state's constitution prohibits any diminishment of public employee pensions, and leaders of Illinois' public employee unions have indicated they will go to court to prevent enactment of any new laws that are perceived as reducing pension payments and retirement benefits promised to their active workers and retirees…”

from Michael Madigan Pension Reform: House Speaker Proposes Fix For Illinois' Dire Pension System