A bill proposed Wednesday by Illinois legislators would cut annual cost-of-living increases for retirees, make government workers pay more toward their retirement and raise the age when full benefits can be received.
Rep. Elaine Nekritz and Rep. Daniel Biss drafted a bill to potentially help the state’s $95 billion pension debt. The proposal would raise employee beneficence, raise the age of retirement for government employees, and begin to share pension costs with school districts. It would increase the retirement age of new government employees as well. It would also allow the state to alleviate some of the future debt by having pension costs transferred to the school district.
The proposal would require state employees to contribute 2 percent more to their own retirement. It would also create a different system for retirement age eligibility. Older workers would be able to retire at the same age at which they presently qualify for, while younger employees would have to work longer.
Illinois legislators have tried to propose a new pension plan for the past year. Although the most recent proposal took place last spring, discussions were halted because of a lack of progress between political parties. In a press release from Nekritz, she said the plan can help state debt and state employees.
“(The proposal is) a balanced plan to simultaneously bring state pension costs under control for the long term and provide retirement security for hundreds of thousands of state workers and teachers.”
The bill was proposed on the final veto day of 2012, which was Dec. 5, Nekritz said. Progress on the proposal isn’t expected until January 2013.
With pension and benefit cuts, some Illinois legislators question whether the bill is constitutional.
“A unilateral reduction of pension benefits would be unconstitutional,” Senate President John Cullerton said. “I thought all constitutional problems were averted in the last proposal.”
Illinois teachers fall under the part of the proposal where school districts can decide what they will contribute to pension costs. The teachers’ pensions will gradually pass responsibility over to school districts. Teachers will have pensions cut and will have to contribute toward their own retirement.
Some Illinois teachers think the proposal is the state’s punishment for past blunders.
“They are making teachers pay for mistakes that we didn’t make,” said Christie McElwee, an English teacher from Decatur. “There is too much waste at the top, and something needs changed.”
McElwee said the new pension change could potentially deter students from becoming teachers in Illinois.
“If I were just now starting, I would move,” she said. “There is no advantage of becoming a teacher in Illinois, and the state will see the long-term effects of it.”
State legislators understand the plan could potentially harm employees. However, Nekritz said she understands debt severity and the need for a change.
In a press release, she explained the need for compromise throughout the Senate.
“I understand this is a difficult issue for all of us, and we do not approach it lightly,” she said. “We have supported other reform legislation and would definitely consider other good ideas moving forward.”