The Illinois Senate passed a pension reform bill Wednesday for the teachers' pension plan, just hours after rejecting a separate, more comprehensive bill that would have put the state retirement systems on track to be 100% funded by 2043.
The Senate passed a bill 30-22, proposed by President John Cullerton, that will allow teachers a choice between keeping a compounding 3% annual cost-of-living adjustment increase or retiree health care. The move could save up to $40 billion over the next 30 years.
Earlier in the day, the Senate rejected a bill 30-23 that could have saved a projected $150 billion over the next 30 years and dealt with all of the state retirement systems.
The bill had several wide-ranging changes for the worst-funded state pension system in the country, including creation of a hybrid plan for members of the $38.1 billion Illinois Teachers' Retirement System and $14.3 billion Illinois State Universities Retirement System hired after Jan. 1, 2014. The bill also would have pushed funding to state school districts and universities.
Other measures in the rejected bill include increasing the retirement age, changing the conditions for automatic cost-of-living adjustments, increasing employee contributions, pension salary caps and changing the required contributions from the state to fully fund all the retirement systems by 2043, with funding guarantees.
Earlier this month, the Illinois House soundly defeated several pension proposals and amendments, many similar to the components of the comprehensive Senate bill. The House did approve an amendment to cap pensions at the Social Security benefit base.