State Universities Annuitants Association
Mini Briefing
March 25, 2010
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The 96th General Assembly of Illinois has definitely been one of the most historical sessions ever witnessed.  Trying to keep up with the antics of March 24th was harrowing to say the least.  The behavior was ludicrous and quite disturbing to say the least.  Every newspaper and media outlet ought to have enough material to keep the buzz going throughout the legislative spring break which begins Friday and commences on April 13th.

Many thanks to Steve Zahn for providing the Facts regarding SB1946 and its House Amendments:

SB 1946: 2 Tier Pension Benefits

*          HOUSE AMENDMENT #4 (Adopted)

HA #4 is a gut-and-replace amendment that performs the provisions contained in HA #2 with the following exceptions:

·          Removes Chicago Transit Authority (CTA) from this legislation, in other words, CTA’s new employees will not be subject to the reforms provided under this Act.  The reason CTA is removed, is because these provisions would be a benefit increase for CTA participants.

·          Clarifies that those members subject to the reforms, are those who become an employee and a participant of a retirement system or pension fund (on or after January 1, 2011).

·          Finally, HA #4 applies the same return to work provisions (suspension of an annuity while receiving a salary) to those new members of the Judges Retirement System (JRS) and General Assembly Retirement System (GARS).

*          HOUSE AMENDMENT #2 (Adopted)

HA #2 is a gut-and-replace amendment that makes several reforms to all the state and local Pension funds.

The legislation would make reforms to all retirement systems (local and state) under the Illinois Pension Code (except Chicago Police Pension Fund, Chicago Fire Pension Fund, Downstate Police Pension Fund, Downstate Firefighter Pension Fund, and IMRF SLEP):

For the state and local retirement systems (excluding JRS and GARS, these systems are reformed as explained later in the analysis):

ŸNormal Retirement Age (Vesting)

Unreduced benefits at age 67 with 10 years of service; reduced benefits at age 62 with 10 years of service, reduction will be at ˝ of 1% per month, which equates to 6% per year.

ŸPensionable Salary
Maximum pensionable salary shall be $106,800 and grow with ˝ of CPI-U (this is the current Social Security Wage Base).

ŸFinal Average Salary
Highest consecutive 8 years of last 10 years of service.

 

ŸAlternative Formula (SERS only)
Alternative formula shall be limited to correctional officers, state police, and state firefighters.  Can retire at age 60 with 20 years of service.


ŸCOLA
Simple interest COLA the lesser of ˝ the CPI-U or 3%.


ŸSurvivor Annuities
Survivor annuity will be set at 66.7%.


ŸSuspension of Pension
No new pension plan enrollees may receive a pension from 1 system and a salary from another system.  If this occurs, the pension is to be suspended.  However, when the individual ends his/her employment, his/her pension shall be reinstated.


ŸRestructure the Chicago Public Schools Funding Schedule
Allows CPS to pay normal cost for the next 3 fiscal years and extend their funding schedule by 15 years.  Allows  SURS participants to the option to participate in a self-managed plan (Defined Contribution Plan) which is currently available to current SURS participants.


ŸMcCarthy JRS/GARS Reforms
This legislation would contain the provisions of HB 6368 (McCarthy) by including reforms to the Judges Retirement System (JRS) and General Assembly Retirement System (GARS).

 

The proposal includes and now passed:    

·          normal retirement ages equal to the age a person becomes eligible for Social Security, which is
                now age 67 — or reduced at age 62.

·          pension formulas calculated at 3.0% of pay per years of service.

·          final average salary for annuity purposes based on a member’s average salary over his/her last 8 years of service. 

·          maximum annuities at 60%.

·          cost-of-living adjustments equal to the CPI-U or 3% compounded, whichever is less.

·          optional survivor annuities, paid by members, equal to 66.7%.

·          maximum pensionable salary shall be the Social Security wage base (currently $106,500) and adjust annually with CPI-U.

 

SB 1946 impacts 13 pension systems governed by the Illinois Pension Code.  These include:

·          Chicago Teachers’ Pension Fund

·          Metropolitan Water Reclamation District

·          Cook County Employees

·          Chicago Municipal Employees

·          Cook County Forest Preserve

·          Chicago Park District

·          Judges Retirement System

·          General Assembly Retirement System

·          State Employees Retirement System

·          IMRF

·          Teachers’ Retirement System

·          Chicago Laborers

·          State Universities Retirement System

 

While yesterday was a real twist to the political scene even for Springfield, it seemed that there was a definite message sent to many of the power players around the Capitol rail.  The sharing of any information from the power players was silent.  This turned into more of a turf battle than a call to work together. Leading up to this day, a train wreck was already in process or what some might call a true game of King of the Hill.  The legislative leaders were geared to move at all costs. No matter, the result was not a true answer to the problems ahead for the State.  SB1946 is not to be considered the end of all.  We need to make sure that we stay united in every sense of the word.   

Going forward, health care is still a focus for SUAA. Conversations with Rep. Kevin McCarthy on Tuesday, leads to the belief that the Governor will not be able to impose a high premium on the retirees.  Remember the Governor’s quote, “A promise made is a promise kept!”

Now more than ever currently employed and retirees need the State Universities Annuitants Association.

We are in the process of gathering information again.  Let us know your health care situation.  Are you enrolled in Medicare? Pre-1986? Pre-1980?  Were you required to enroll in any other Medicare program such as Medicare Part D?  Are doctors refusing to see you?  Do you have to pay for your services?  Can you easily switch to an HMO?

We are looking for real life facts.  Please share by emailing suaa@suaa.org.  We need the testimonies in writing not by phone conversation.  All responses need to be in the SUAA office by no later than April 12.