Mt. Vernon Register-News

State News

March 15, 2013

Ill. House GOP OK with new cost-shift on pensions

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SPRINGFIELD (AP) — The top Illinois House Republican and the Democrats' pension point person proposed yet another solution Wednesday to the state's public retirement system debacle, one that signals the GOP's first concession toward shifting teachers' pension costs to local school districts.

Minority Leader Tom Cross of Oswego and Rep. Elaine Nekritz, a Northbrook Democrat, suggested moving the state out of funding retirement for schoolteachers and university employees, maintaining defined-benefit accounts supplemented by a 401(k)-style, defined-contribution system.

If signed into law, the idea would reduce the state's annual contribution to five employee pension accounts by $2 billion, reduce the $96 billion funding shortfall by 30 percent, and reduce the deficit within three decades, according to Cross and Nekritz, who were joined by about a dozen other representatives and senators at a news conference outside the House chamber.

The new pitch was made on the eve of a House session scheduled by House Speaker Michael Madigan, D-Chicago, to allow open floor debate on four pension ideas. They include elimination of pension cost-of-living increases, an apparently extreme measure that Madigan put forth as a serious potential remedy because "there's a huge problem," spokesman Steve Brown said.

"Everything's serious," said Brown, "and it's just, keep working on the issue until we can find a majority of the Legislature willing to pass a bill and send it to the governor."

As for the Cross-Nekritz offer, Brown said Madigan was encouraged by the first indication by Cross that he would support the so-called "cost shift," transferring from state taxpayers to local boards of education the employer portion of pensions for schoolteachers' — whom Madigan notes are "non-state employees."

Senate President John Cullerton embraced the Cross-Nekritz idea but will also continue pursuing a proposal that he believes is constitutional because it offers annuitants a choice of post-career benefits, a spokeswoman for the Chicago Democrat said. That concerns Nekritz, who doesn't believe that Cullerton's ideas save enough money.

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