Dear Neighbor,
This week the House and Senate passed significant pension
reform legislation. As you may know, Illinois' pension systems are in
horrible condition. We have unfunded pension liabilities of over $80
billion. As the Pew Center on States' recent report highlighted,
Illinois' pension system is "in the worst shape of any state, with a funding
level of 54%". Bond rating agencies have dropped our ratings 3 times over
the last 13 months and we are at risk of having our ratings drop even
lower. To provide immediate and long-term stability to protect the benefits
earned and owed to public service professionals and retirees, it was imperative
that we act and do so quickly. The bill passed the House 92 (yes) - 17
(no) - 7 (present) and the Senate 48 (yes) - 6 (no) - 3 (present). I
voted yes.
SB1946, the pension reform bill that passed, changes the
benefit structure for FUTURE state employees; it does NOT cut or change the
benefits earned for any current employee or retiree. This bill is
expected to save the state $300 million to $1 billion in the upcoming year, and
according to the nonpartisan Commission on Government Forecasting and
Accountability, over $135 billion will be saved over the next 35 years.
To review the bill you can click here. In summary, the bill includes the
following provisions for employees not yet hired:
- Adjusts the retirement age at which workers can receive full benefits to age 67
with ten years of service. Lesser pension benefits are available at age
62.
- Limits the salary level on which pension benefits are based to
$106,800.
- Limits post-retirement cost-of-living adjustments to half the rate of
inflation or 3 percent, whichever is smaller.
- Bases pension benefits on the highest average salary earned during
eight consecutive years of pay rather than the four year calculation of
existing workers.
- Prohibits "double-dipping", in which one can collect a pension
from one system and draw a salary from another system.
This bill is one critical step to addressing our budget
crisis. We must also make needed contributions to the pension systems - I
am adamantly opposed to the state shirking its obligation to fund our pension
systems. I voted "no" on pension obligations notes and against the state
budget last year, and will continue to fight for a responsible budget that
includes the state's obligated contribution to the pension systems.
People feel strongly about this bill and the crisis facing
our state budget. I invite you to meet with me during my open office
hours on Thursday, April 1 from 3:30-6:30 pm at 5533 N. Broadway, where I look
forward to answering any further questions you may have. If this time
does not work for you please feel free to call me anytime at 773-769-1717 or
email me at hsteans@senatedem.ilga.gov.
Best,
Heather Steans
State Senator
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Heather Steans