The Illinois General Assembly is fast-tracking Chicago Mayor Rahm Emanuel’s pension reform proposal as an amendment to one of its existing pension-related bills.
The amendment to bill SB 1922, which changes some disability benefits in Illinois pension law, is the result of Monday’s compromise between the mayor’s administration and some of the city’s labor unions to increase participant contributions to two of the city’s pension funds.
The amendment, introduced by House Speaker Michael Madigan, states that the overall financial condition of the $5.1 billion Chicago Municipal Employees' Annuity & Benefit Fund and the $1.4 billion Chicago Laborers' Annuity & Benefit Fund is “so dire, even under the most optimistic assumptions, a balanced increase in funding, both from the city and from its employees, combined with a modification of retiree benefits for both current and future retirees, is necessary to stabilize and fund the pension funds.”
The municipal plan is 38% funded, and the laborers plan is 58% funded.
The bill amendment would put into law the deal that would increase the city’s contribution to the two pension funds annually by a fixed amount until 2020, and then by an actuarially determined variable amount required to bring the plans’ funding ratios to 90%.
Plan participants would also see their contributions rise 0.5% for each of the next five years to 11% of pay from the current 8.5%.
Kelley Quinn, spokeswoman for Mr. Emanuel, said the mayor’s office currently does not have a statement to make.
