Illinois’ Controversial Proposed Pension Reform
With many cheering, and many picketing, Illinois’ proposed pension reform is very controversial. Governor Quinn has avoided reforming the pension system until recently when he announced a bold plan that is designed to secure retirement for public workers and to fix the state’s pension issue at the same time.
The major highlights of this proposal include:
- 3% increase in employee contributions
- Reduce cost of living adjustment
- Delay the cost of living adjustment to earlier of age 7 or 5 years after retirement
- Increase retirement age to 67
- Establish 30-year closed actuarially required contribution funding schedule
This proposal is expected to save taxpayers $65 to $85 billion. However, there are concerns from those whose pensions are being adjusted. Many teachers in the state have taken to picketing government offices. School districts and teachers are concerned that under this reform the employer will be responsible for paying the costs of pensions. Elementary school superintendent Kevin Skinkis stated, “I am very concerned that the governor will shift [teacher retirement system] employer pension cost to school districts. This would cause. . . financial distress and it would force us to have to make some serious reductions to a budget that is already carrying a deficit.”
With only six days left in the spring legislative session, the entire state of Illinois is watching and waiting on the fate of public workers’ pensions.
This post was prepared by Chelsea Keenan Albany Law School ’14