The Illinois House is looking to vote on a pension reform bill that would drastically reduce cost-of-living adjustments and increase employee contributions as the General Assembly’s lame-duck session comes to an end on Tuesday.
The House Personnel and Pensions Committee on Monday approved amendments to a Senate bill. The House adjourned before a floor vote was called and will resume debate on the bill at 11 a.m. CST Tuesday. The amendments include a “pause” on COLAs for all state workers and retirees for six years, no COLAs awarded until age 67 and once COLAs resume, they will only apply to the first $25,000 of pensions, said Ryan Keith, spokesman for state Rep. Elaine Nekritz, chairwoman of the committee
The bill, SB 1673, would create a plan to reach 100% funding in 30 years for the five state pension funds that have an aggregate $96 billion in unfunded liabilities. It guarantees that the state will make its full pension payments every year.
The bill also includes increasing employee contributions by one percentage point each of the next two years and capping a pensionable salary at the higher of a participant’s Social Security wage base or current salary.
The latest proposal scraps plans to shift employer contributions to local school districts and to implement a cash-balance plan.
Senate President John Cullerton has not taken a position on the bill except “that the proposal appears to impose unilateral pension reductions without offering participants a choice,” said spokeswoman Rikeesha Phelon in an e-mail.
“In order for reform to have real impact, it needs to hold up in court. It’s not clear that SB 1673 passes that critical test,” Ms. Phelon said. “The Senate will be paying attention to action taken by the House today before determining our schedule for Tuesday.”
Last spring, the Senate passed a bill that would give current employees and retirees two options — to keep retiree health care and accept a lower COLA, or keep the COLA and lose post-retirement health-care access. Those who elected to keep the COLA would lock in their current salary for pension calculation purposes. That bill never came up for a vote in the House.