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Statehouse Update: Fall Veto Session unlikely to tackle pension reform, eyes turn to January

October 16, 2012
Lori Clark

Lori Clark

In Springfield …

The Illinois General Assembly reconvenes from Tuesday, Nov. 27, to Thursday, Nov. 29 and from Tuesday, Dec. 4, to Thursday, Dec. 6, for its Fall Veto Session. We also anticipate that the General Assembly will reconvene in early January 2013 for a “Lame Duck” session before the 98th Illinois General Assembly is inaugurated Jan. 9, 2013.

Although the issue of “pension reform” of the five state-funded pension systems, including the State Universities Retirement System (SURS), has been discussed by the media, elected officials, the governor, business groups, unions and other interested parties, there is unlikely to be any action taken by the General Assembly until the lame duck session in January.

At that time, it will require only a simple majority vote to approve legislation, instead of the three-fifths vote needed to pass during the veto session.

Critical Information to Read Before You Vote in November

There is a proposed Constitutional Amendment (#49) on the Nov. 6 ballot that, if passed, would impact the public pension systems, including SURS. If approved by the voters, this amendment would be added to the Illinois Constitution, effective Jan. 9, 2013.

The proposed amendment is very wordy (about 700 words long – so long that the actual language of the proposed amendment will not be included on the ballot), and there is considerable confusion because it contains a number of new terms and concepts that have not been defined.

In a nutshell, it will require a three-fifths majority vote of each chamber of the General Assembly or the governing body of a unit of local government, school district, or pension or retirement system to increase a benefit under any public pension or retirement system. For public universities, there has never been any definition of what the governing body is – the Boards of Trustees, SURS, the General Assembly, etc. If approved, it is very likely that many of these new terms and concepts would be challenged and ultimately would be decided by a court.

You need to carefully study this issue before casting your vote. You also need to inform your family, friends, neighbors and other interested parties about the possible impact of this issue so that they might make an informed vote.

Additional information on this proposed Constitutional Amendment can be found in a document produced by the Secretary of State. In addition, the State Universities Annuitants Association has more information on how this amendment, if approved, would impact SURS employees and annuitants. You can also use an Internet search engine (search: Illinois Constitutional Amendment 49) to find additional media coverage of the issue.

New Pension Reform Bills Introduced

Symbol of the State of IllinoisThere have been several new bills introduced in the Illinois General Assembly since it adjourned in the spring regarding pension reform:

HB 6204, introduced by Rep. Mike Fortner, amends the state-funded pension systems and requires each of these systems that does not already have a self-managed plan to establish and maintain one. It authorizes participants in these systems to irrevocably elect to participate in such a plan. It provides that, for the purpose of calculating traditional benefit package benefits and contributions, the annual salary of a participant may not, except under certain circumstances, exceed certain limits. It requires participation in the self-managed plan to the extent that a participant’s salary exceeds the salary cap. It also revises the schedule of contributions for participants and shifts a portion of the employer contributions for downstate teachers and university employees from the state to the actual employer. It authorizes the boards of trustees of each of these retirement systems to triennially recalculate the normal cost of benefit plans that they offer. Further, it changes the formula for calculating the minimum required state contribution to these systems, and provides that the state is contractually obligated to pay the annual required state contribution to these systems.

HB6209, introduced by Rep. Elaine Nekritz, amends the state pension systems, with the exception of the judges. It provides that Tier I employees and Tier I retirees must make an irrevocable election either: (1) to accept changes in eligibility for, and the amount of, automatic annual increases in retirement annuity or (2) to avoid those changes. It provides that a person who elects the first choice may have any future increases in income included as compensation and is entitled to certain healthcare benefits. If a person elects the second choice, they forgo those benefits. It prohibits departments from offering to a person who elects the second choice any future increase in income in a form that would constitute compensation.

HB 6210, also introduced by Nekritz, is very similar to HB6209, but it would amend only the General Provision, State Universities and Downstate Teachers Articles of the Illinois Pension Code.

We will continue to monitor and report on any new pension bills that might be introduced in coming weeks. The pension reform issue will likely reemerge as a top issue following the Nov. 6 election.

The Voices section of NIU Today features opinions and perspectives from across campus. Lori Clark is director of State and Federal Relations for NIU.