Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. REGULATION AND LEGISLATION
July 08, 2015 01:00 AM

Illinois governor unveils new pension reform bill

Meaghan Offerman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Crain's Chicago Business
    Bruce Rauner

    Illinois Gov. Bruce Rauner announced Wednesday a bill aimed at reducing pension costs at the state, county and city levels.

    The bill adopts aspects of Mr. Rauner's earlier tiered proposal to encourage certain employees to move into Tier 2, which is for employees hired on or after Jan. 1, 2011, or into a new Tier 3 hybrid plan, along with previous legislation aimed at reducing Cook County and Chicago pension costs.

    Specifically, the bill adopts all aspects of SB777, an earlier bill that would reduce Chicago's required pension contributions to the $2.9 billion Chicago Policemen's Annuity & Benefit Fund and the $1 billion Chicago Firemen's Annuity & Benefit Fund over five years, starting in 2016 and extend the deadline for the fire and police pension funds to reach 90% funding to 2055 from the current 2040 deadline.

    The new bill also would extend the 90% funding deadline for downstate municipal police and fire pension funds to 2055 from the current 2040 deadline and transfer the investments assets of 642 downstate police and fire funds to the $35.6 billion Illinois Municipal Retirement Fund, Oak Brook.

    According to documents provided by a spokeswoman for Mr. Rauner, the bill also includes the following:



    • Future public safety employees would be enrolled in a hybrid defined benefit/defined contribution plan.

    • Certain members of state pension funds, the $10.2 billion Chicago Public School Teachers' Pension & Retirement Fund and downstate public safety plans would have to choose between reduced cost-of-living adjustment benefits or excluding future salary increases from pension benefit calculations.

    • Cook County employees would have to choose between reduced COLA benefits or excluding future salary increases from pension benefit calculations, or accept provisions of an earlier Cook County pension reform bill, which includes higher employer and employee contributions.

    • The state would cover “normal costs” for Chicago teacher pensions — the contribution required to cover active teachers now covered by Chicago Public Schools — and CPS no longer would cover part of teachers' 9% employee contribution.

    • Illinois municipalities would be able to file for bankruptcy protection.

    Jesse Sharkey, vice president of the Chicago Teachers Union, called the new bill unconstitutional.

    “The legal theory (Mr. Rauner) is using has resulted in an unconstitutional mishmash of proposals, which diminish and impair pensions,” said Mr. Sharkey in a statement on CTU's website Thursday. “Chicago's public school educators should not have to choose between having an arm cut off or a leg — meaning, we should not have to decide which hard-earned right we must give up in order for the state to make contributions to our fund as it does to others across Illinois.”

    Also Wednesday, S&P lowered Chicago's credit rating to BBB+ from A-, citing the city's “structural imbalance.” A negative outlook also reflects S&P's concerns over large upcoming police and fire pension payments.

    In May, Moody's Investors Service downgraded Chicago's credit rating to junk over continuing pension concerns, noting the Illinois Supreme Court's ruling May 8 that the Illinois pension reform law of 2013 was unconstitutional could narrow Chicago's options for addressing its own pension problems.

    Related Articles
    Illinois pension reform law unconstitutional, state Supreme Court rules
    Illinois, Chicago run out of options
    New Jersey pension contribution fight key in fiscal-year countdown
    Pennsylvania governor vetoes pension reform bill to put new employees in DC plan
    Amended bill to short Chicago teachers pension fund contribution fails
    Illinois Senate passes bill to aid Chicago Public Schools in pension fund contr…
    Illinois high court to hear Chicago pension appeal
    Fitch downgrades Illinois as budget impasse continues
    Civic group proposes merging administration of Illinois, Chicago teachers pensi…
    Recommended for You
    Investors hail SEC guidelines on exchanges
    Investors hail SEC guidelines on exchanges
    Standards-of-conduct rules approved along party lines
    Standards-of-conduct rules approved along party lines
    SEC passes Reg BI package by 3-1 vote
    SEC passes Reg BI package by 3-1 vote
    Private Markets
    Sponsored Content: Private Markets

    Reader Poll

    August 10, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Gaining Momentum: Where Next for Trend-Following?
    How Has 2022's Carnage Reshaped Global Stock and Bond Markets?
    Can Sustainable Labeling of Financial Products Prevent Greenwashing?
    Hedge Funds 2.0: Back to the future
    Is there a mid-cap gap in your DC plan?
    Why pursue direct lending in the core middle market?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    August 1, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit