UPDATE 1:45 pm : The House on Thursday afternoon passed HB1165 which is commonly known as the Nekritz-Biss (Cross) plan.
This plan, which passed 66-50, cuts the 3 percent automatic compounded Cost of Living Adjustments on annuities of more than $25,000. It would apply to active and retired participants in all the pension systems except for judges.
The House has previously voted to cap pensionable salaries at $113,700, or the rate of Social Security, and to increase the retirement age by five years for those 35 and younger, increase it by three years for those ages 35-39 and one year for those ages 40-45. There is no change for those age 46 and older.
House Speaker Michael Madigan noted at the end of the debate on HB1165 that it’s likely all these changes will be lumped into one omnibus bill and sent to the Senate.
(Note: This story has been updated with additional information and a clarification on the impact on insurance access for active Tier 1 employees)
Sen. President John Cullerton put a bill in front of the Senate Wednesday — twice — that would have a direct impact on active Tier 1 TRS employees who have not yet submitted their letters of retirement.
IEA is OPPOSED to the bill.
The bill, known as SB1, forces current Tier 1 employees to choose to freeze their pensionable salaries (the salary on which their pension would be based) where the salaries are today and to forgo access to any state provided health insurance, to retain a 3 percent compounded COLA in retirement.
Or, active Tier 1 employees can continue to count salary increases toward their pensions but they would see their COLA reduced in retirement to half of the consumer price index or 3 percent simple COLAs, whichever is less, to retain access to a (as yet undefined) healthcare plan. The legislation even suggests that this access could be to a plan in which the participating retiree could be required to pay for the entire cost of their health insurance (unlike TRIP as we know it today).
More about SB1:
- It does not include any current TRS retirees or anyone who has already declared through irrevocable letters of retirement that they are leaving the profession.
- It includes provisions that are similar to (but not as strong as) key components of the We Are One Illinois bill, SB2404, covering establishment of a pension stabilization fund, and the right for TRS members to sue the state if the state doesn’t make its future payments.
- There is no 2 percent increase in member contribution in SB 1.
- There also is no shifting of the cost of pensions from the state to local school districts.
The bill needed 30 votes to pass. The first attempt to pass the bill fell one vote short: 29 Yes, 22 No, 4 Present. President Cullerton then withdrew the bill. It was heard again about 15 minutes later. This time it passed 30 Yes, 22 No, 2 Present.
This bill has only been passed by the Senate. It must be passed by the House and signed by the governor to become law.
Check the IEA website regularly for updates on the pension fight.