Mt. Vernon Register-News

State News

March 15, 2013

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

(Continued)

A coalition of public-employee unions called "We are One Illinois" rejected the new twist put on Nekritz's idea as a proposal that "defies the Constitution and diminishes benefits unilaterally."

Cross and Nekritz trumpeted their solution and pointed to its bipartisan, bicameral support — Senate Republican Sue Rezin of Morris attended the announcement, along with Sen. Daniel Biss, an Evanston Democrat who as a House member last fall worked with Nekritz on the initial idea.

"Thirty years from now, if you're retired, and live to 90, you will have a pension check coming in the mail, and this thing will be solved in 30 years, solid, 100 percent," said Rep. Darlene Senger, a Naperville Republican.

The new bill recycles Nekritz's and Biss' propositions from fall. It requires state employees to contribute an additional 2 percent of their salaries toward pensions by July 2014, generally delays cost-of-living increases until age 67, and applies COLAs only to the first $25,000 of an annual pension.

The new part involves teachers and university employees hired beginning next year. They would begin in a system in which they contributed 4 percent toward a traditional, defined-benefit plan and 5 percent to a defined-contribution plan, which the public pension systems would invest in the market. School boards and universities would take over the employer portion by paying at least 3 percent toward the system.

School districts, backed by Cross and other Republicans, have been reluctant to embrace the cost shift because they contend the state already underfunds schools and additional pension costs would require increased local property taxes.

Ben Schwarm of the Illinois School Management Alliance, representing public school administrators and school boards, said he didn't know the new plan's details but said if the employer portion was based solely on what education boards negotiate with teachers, legislative plans were moving in the right direction.

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