So, the most-in-trouble public pension system in the U.S. STILL KEEPS A 3% COLA FOR THEIR RETIREES!
From John Curry, December 4, 2013
Their COLAs were "compounded" before but now they are
still at a non-compounding 3% rate. Ohio STRS didn't allow their retirees keep
their 3% non-compounding pension. How can this most seriously impacted Illinois
pension system still manage to pay a 3% COLA to its retirees and Ohio STRS
can't? You don't think it has anything to do with Ohio's 88.5% payout for 35
years, do you? John
Illinois General Assembly passes pension reform bill
By Kevin Olsen
December 3, 2013
The Illinois General Assembly approved a wide-ranging pension reform
bill Tuesday aimed at saving $160 billion over the next 30 years and bringing
the state-administered plans to 100% funding by 2045.
The Senate passed the measure 30-24 with three abstentions; the House
approved it 62-53 with one abstention. Gov. Pat Quinn is expected to sign the
legislation.
The bill is similar to one passed by the House, but rejected by the Senate
this summer. It decreases cost-of-living adjustments, caps pensionable salaries
and raises retirement ages, but actually decreases employee contributions by one
percentage point.
Also, up to 5% of employees hired before Jan. 1, 2011, will be eligible to
join a defined contribution plan starting July 1, 2015; the plan will be revenue
neutral for the state and employee contributions will remain at the same level.
DC investment options will include investments handled by the $13.1 billion
Illinois State Board of Investment, Chicago. The employer contribution will be a
uniform percentage of compensation that is determined each year. If a member
joins the DC plan, pension accruals will be frozen.
COLAs will change to 3% non-compounding on $1,000 a year per year of
service or $800 for those retirees who receive Social Security, from a straight
3% compounding rate for both types of retirees. The $1,000 or $800 figure will
increase annually based on the rate of inflation. Salaries eligible for a
pension will be capped at $110,000 and that cap would grow at the lesser of 3%
or half of the inflation rate. The retirement age will increase for participants
45 years old and younger. It will rise four months for each year a member is
under 46, capped at five additional years.
In order to reach 100% funding, the state will contribute $364 million in
fiscal year 2019 and $1 billion annually through 2045. Also, starting in fiscal
year 2016, the state will contribute an additional 10% of the annual savings
from pension reform. The retirement systems, but not individual participants,
may file suit in the Illinois Supreme Court to compel the state to make the
required contributions.
posted by Kathie Bracy at 11:21 PM
