Illinois House Speaker Michael Madigan filed an amendment to a comprehensive pension-reform package passed by the Senate last month that caps the salary on which a pension can be based and limits annual cost-of-living increases.
The House Personnel & Pensions Committee is scheduled to consider the legislation at an 8:30 a.m. Wednesday, May 1, meeting.
The 277-page proposed amendment tweaks ideas proposed by Rep. Elaine Nekritz and House Republican Leader Tom Cross and would cap the total annual salary on which a pension could be based at $109,971, which is less than the $113,000 Social Security guideline originally proposed.
- A new funding schedule requiring pension systems to be fully funded by 2044;
- A new method for certifying contributions beginning FY15 to average costs evenly over a pensioner’s employment;
- Supplemental annual contributions of $1 billion beginning in FY20 until all pension systems reach their funding goal;
- A funding guarantee to each pension system;
- A pensionable salary cap for Tier I employees similar to the Tier II cap;
- A new method of calculating the COLA based on a proposal by Sen. Christine Radogno in an amendment to SB 35;
- A delay in first or next year COLA increases to age 67 or the fifth anniversary of retirement;
- An increase in retirement age for employees under 45 years old;
- A graduated increase in employee contributions by one percent in July 2013 to two percent by July 2014;
- A prohibition on collective bargaining with regards to pension-related items;
- A prohibition on non-governmental organizations from participating in state retirement systems;
- A change in the effective interest rate;
- Prohibition on the use of pension funds to pay costs associated with health care; and
- Requirement for separate appropriation requests for normal costs and amortization of the unfunded liability.
Visit NIU’s State Pension & Budget Update website for updates from Springfield.