SPRINGFIELD – The following statement was released by Senate President John J. Cullerton following Senate passage of SB 2404:
“I’d like to thank my Senate colleagues, the representatives of teachers, nurses, police officers, and public employees who worked together to pass a plan to address our pension crisis.
The courts, bond houses, and our funding priorities demand a law that is clearly constitutional. This bill is fair and respects the plain language of the pension clause. For that reason, I believe that it has the best chance of withstanding a court challenge.
The framework of this bill also achieves the goal of relieving financial pressures starting with the $1 billion pension payment scheduled for FY 15. The plan is estimated to save the state $45 to 51 billion over the next 30 years.
Ambitious savings projections should always be balanced against the prospect of netting zero with an unfavorable court decision. Members of the Senate have calculated this risk and demonstrated their adherence to the plain language of the Illinois Constitution today.”
Under the bill, Active Members would have three options:
Choice A: Agree to a 3% simple COLA which they would receive two years later than when they would currently receive their first COLA, have access to retiree healthcare, receive all future salary increases as pensionable, be able to enroll in a cash balance plan, and members of TRS would be eligible for early retirement;
Choice B, Option 1: Retain the 3% compounded COLA, but have no access to retiree healthcare, and have all future salary increases always offered as non-pensionable; or
Choice B, Option 2: Retain the 3% compounded COLA but with a 3 year delay, have access to retiree healthcare, all future salary increases would be offered as pensionable, and contribute an additional 2% of salary.
Under the bill, Retirees and members who have given a notice of retirement as of January 1, 2013 would have two choices:
Choice A: Retain the 3% compounded COLA, but agree to skip their compounded 3% COLA on a two-year staggered basis in exchange for retiree healthcare access; or
Choice B: Retain the current COLA, but lose access to retiree healthcare.