An Illinois House of Representatives committee advanced a comprehensive pension reform bill on Wednesday that is aimed at fully funding the state pension systems by 2044.
The Personnel and Pensions Committee approved the bill 9-1. It will now move to the House for a full vote.
Under the bill, state employees would contribute one percentage point more each of the next two years and pensions would be capped at $110,000 of salary. Cost-of-living adjustments would change to 3% of $1,000 per year of service. Currently, a compounding 3% annual COLA is granted.
The new COLA formula deviates from a proposal in the original Senate bill, which was passed March 20 and was sent to the House. That bill was put forward by Senate President John Cullerton and gave retirees a choice between receiving the compounding 3% annual COLA or retiree health care. Mr. Cullerton has insisted on providing an option to satisfy potential constitutional challenges.
Mr. Cullerton said in a statement Wednesday that he “concluded a series of meetings with representatives of teachers, nurses, police officers and other public employees. This coalition of labor leaders offered a credible and constitutional plan for consideration.” He did not elaborate on what the plan entailed.
The House bill also changes the state contribution to fully fund each pension plan by 2044 and includes a funding guarantee as well.
Illinois has repeatedly failed to enact meaningful pension reform in the last year as liabilities increase and credit ratings plummet. However, the addition of House Republican Leader Tom Cross and Democratic Rep. Elaine Nekritz as co-sponsors of the bill on Wednesday could suggest the General Assembly is closer to passing a bill. Both have sponsored similar pension proposals in the past.