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Statehouse update: Legislators scramble to pass bills from committee, pension reform resurfaces

March 20, 2013
Lori Clark

Lori Clark

In Springfield …

The Illinois General Assembly has been busy with committee activities over the last two weeks. This week is the last week to get bills through committees in their house of origin.

Higher Education-Related Legislation

In the Senate Higher Education Committee, SB 2163 passed unanimously out of committee Tuesday, March 12.

Sponsored by Sen. Chapin Rose, SB 2163 requires that full-time employees of public universities who are members of any reserve component of the U.S. Armed Forces or of any reserve component of the Illinois State Militia will be granted a leave from his/her public employment for any period actively spent in military service. NIU already has this policy in place.

SB 2229, sponsored by Sen. Michael Frerichs, also passed unanimously out of committee.

This bill provides that, beginning in the 2013-2014 academic year, any person who has served more than 10 years in the Illinois National Guard will be awarded an additional grant to the Illinois public university or community college of his or her choice, consisting of a tuition and fee waiver for not more than the equivalent of an additional two years of full-time enrollment, including summer terms.

SB 1592, introduced by Rose, was amended and passed unanimously out of committee. This bill contains many of the recommendations set forth in a report by the Monetary Award Task Force.

It provides that if MAP recipients are not permitted to continue attending a higher education institution because they are not earning the minimum grades needed to attend that institution, then they cannot receive MAP grants during the following year. It further provides that the Illinois Student Assistance Commission (ISAC) is to request that the Illinois Association of Student Financial Aid Administrators makes recommendations on possible changes to how ISAC determines the number of grants to be offered and to whom they are offered.

Higher education institutions, if requested, are required to provide specified information concerning MAP recipients to demonstrate the value of the program, and to determine where improvements could be made.

SB 1944, also introduced Rose, was discussed in the Higher Education Committee hearing March 12, although no vote was taken because of concerns expressed by the University of Illinois.

Beginning with the 2014-2015 academic year, the bill would require that a public university must admit an applicant for admission to the university if the applicant:

  • will graduate from an approved high school;
  • has a high school equivalent cumulative GPA of at least 3.5 on a 4.0 scale;
  • has received a composite score of 28 or higher on the ACT;
  • enters into an agreement with the university that she/he will major in a STEM field; and
  • submits the application before the deadline established by the university.

Sen. Rose is concerned with the loss of Illinois’ most talented students to other states, and he might amend this legislation to create a task force to study this issue.

The House Higher Education Committee met March 13. The only bill considered that is of interest to NIU is HB 2910, introduced by Rep. Jerry Costello. This bill extends the time that a qualified returning veteran has to return to Illinois from six months to one year after leaving federal active duty service in order to qualify for the Illinois Veteran Grant Program. The bill was passed unanimously out of committee.

'Road to Retirement' highway signPension Reform

Various pension reform measures are being considered in both the House and the Senate.

While some of these measures are being passed in both the House and the Senate, it is anticipated that there will be a comprehensive pension reform package developed at some point in the legislative cycle that will include most, if not all, of the elements that have been approved by the chambers. Steve Cunningham continues to work on pension reform for NIU and the public universities.

The House of Representatives began moving on some bills intended to reform some or all of the state-funded pension systems.

HB 1166, sponsored by Speaker Mike Madigan, as amended, passed the House. There are two impacts.

First, it would cap “pensionable” salaries at Social Security wages (currently $113,700), indexed for inflation. This provision only will apply to employees hired before Jan. 1, 2011. The second provision would increase retirement ages, on a sliding scale, for employees hired before Jan. 1, 2011 and younger than the age of 45 (this does not apply to judges). The retirement age would increase one year for those aged 40 to 45, three years for those aged 35 to 39 and five years for those under 35.

Both of these measures also are included on a comprehensive pension reform package being developed by Rep. Elaine Nekritz and Minority Leader Tom Cross (HB 3411).

Senate Bill 1, sponsored by President John Cullerton, passed March 13 out of Senate Executive Committee. SB 1 incorporates two choices for pension reform.

The first option, or Part A, is similar to Senate Bill 35 (see below) and a bipartisan measure being sponsored in the House, HB 3411. This measure includes unilateral benefit cuts, including a freeze on the cost-of-living allowance on retirees benefits and higher employee contributions. It strengthens the state funding formula for the pension systems, but it does not include a cost shift to the employer (public universities and local school districts).

The second option, Part B, takes effect only if Part A is ruled unconstitutional. Part B offers employees and retirees a choice between reduced COLAs and keeping retiree health insurance, or keeping a full COLA but losing health insurance. Part B also strengthens the state funding formula for the pension systems, but it does not include a cost shift.

Photo of a stairwellSB 35, sponsored by Sen. Daniel Biss, is the same as HB 3411: It would create a new Tier 3 category, establishing a hybrid of a defined benefit and defined contribution plan for new teachers and university employees.

Tier 3 includes a cost shift (to the university and local school district) and would apply to employees hired after January 1, 2014. Those employees now in the Tier 2 system (employees hired after January 1, 2011) would be permitted to switch to the Tier 3 benefit package. The defined benefit plan will require contributions of 4 percent from Tier 3 employees, and those employees will earn benefits each year based on 1.1 percent of final salary. The retirement age would be increased to 67.

Tier 3 also includes a defined contribution plan that requires employees to contribute 5 percent of salary, with local schools and universities contributing at least 3 percent and as much as 10 percent.

SB 35 also changes Tier 1 benefits for all retirement systems, with the exception of judges. It reduces and would delay COLAs, and COLAs would be paid only on the first $25,000 of benefits for those without Social Security or the first $20,000 for those with Social Security. Retirees would receive no COLA until age 67 or five years after retirement, whichever comes first. Retirement age would be increased by five years over existing law and phased in over time.

Employee contributions would be increased by 2 percent, phased in over two years for Tier 1 employees, and the pensionable salary would be capped at the Social Security base ($113,700). The state funding formula would be strengthened.

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