Senate Bill 1 approved
Tue December 3, 2013
Illinois Legislature Approves Pension Overhaul Plan
Illinois lawmakers approved a pension overhaul Tuesday. The Senate passed the plan 30 - 24, and the House approved it on a 62 - 53 vote. Governor Pat Quinn has indicated he will sign this bill, which is intended to save $160-billion over the next three decades.
House Speaker Michael Madigan calls it a "balanced bill." State Senator Kwame Raoul told fellow lawmakers each provision in the bill has been heavily negotiated.
The legislation pushes back the retirement age on a sliding scale and cuts benefits for workers and retirees.
Several unions have opposed the bill, calling it unfair and unconstitutional. Up to the last moment, many worked behind the scenes to get lawmakers to vote “no.”
A union representing building and food service workers at the University of Illinois expects to be part of a legal challenge to the pension proposal, if it passes. Ricky Baldwin with SEIU Local 73 describes the proposed cuts in the COLA, or Cost of Living Increase, as ‘diet cola’:
“This formula they’ve come up with, what it’s going to do – is impact people who have worked for 20 years or so, paid into their pensions, expecting – because they were promised – that money would be there when they retired, and that it would keep up in inflation. Now if inflation goes through the roof, those people are going to be in trouble.”
One key Illinois lawmaker says she takes no joy in supporting the proposal. State Representative Elaine Nekritz is a Democrat from Northbrook and chairwoman of the Illinois House's pensions and personnel committee. She spoke on the floor of the House today and said she's heard from countless retirees concerned about their benefits.
Nekritz says it's "a very tough vote,'' but it's necessary to ensure the stability of the pension funds.
The legislature's four top leaders announced the agreement last week, and a bi-partisan committee that worked for months on the agreement approved the plan Monday night.
Illinois has the nation's worst-funded state pension system. The proposal debated and passed Tuesday is Senate Bill 1.
Among northern Illinois House members, Democrat Chuck Jefferson, and Republicans Joe Sosnowski and Bob Pritchard voted "no" to the pension plan. In the Senate, Republican Tim Bivins voted no, while Republicans Dave Syverson and Jim Oberweis, and Democrat Steve Stadelman voted yes.
The full House vote is here.
The full Senate vote is here.
Long term effect
Public university officials, including NIU administrators, say the measure would limit their ability to recruit and retain top faculty. Groups like the liberal-leaning Keystone Research Center in Pennsylvania agree. The center’s Stephen Herzenberg says they’ve examined similar pension proposals in Illinois. He says the one that advanced Tuesday would create a turnover problem.
“The idea that retirement benefits are a key retention device is as old as the field of resource management,” Herzenberg said.
Herzenberg says one of the biggest concerns is the COLA reduction. He says that perk is crucial for Illinois retirees, because unlike public workers in other states, many here can’t rely on social security.
But Laurence Msall of the Civic Federation says employee recruitment won’t be a problem under this plan. He says creating stability for the retirement systems will make Illinois more attractive.
“A far greater threat to the state’s universities is the state’s continued financial deterioration, “ Msall said.
The Federation says the plan that cleared the General Assembly isn’t a cure-all, but rather a step in the right direction. Meanwhile, the Illinois Policy Institute criticized the plan, saying it won’t produce the long-term savings touted by supporters.