Sunday, January 06, 2013

House to take another shot
at pension reform tomorrow

By Jamey Dunn

Supporters of pension reform in the House say they are still hopeful that the chamber can approve a plan before the current legislative session ends on Wednesday.

A House committee is scheduled to take up Senate Bill 1673 at noon tomorrow. Northbrook Democratic Rep. Elaine Nekritz said the bill scheduled for a hearing tomorrow would be similar to the plan that legislative leaders were negotiating over the weekend. The plan would:

  • Freeze cost of living adjustments (COLAs) for six years. 
  • Increase employee contributions by 2 percent of salary. 
  • Phase in contribution increases over two years. 
  • Cap pensionable salary at the salary employees are earning when the bill goes onto effect or the Social Security wage base, whichever is more. 
  • Include a guarantee that the state makes its annual required contribution to the pension systems. 
Once the cost of living increase returns, it would only apply to the first $25,000 of retirement incomes and would not be awarded until employees turn 67. A controversial cost shift, which would require schools outside of Chicago, universities and community colleges to eventually pick up the full employer cost for employee pensions, has been temporarily set aside in an attempt to clear the way for the passage of this plan.

Nekritz said the bill she plans to present tomorrow may have some “tweaks” as House leadership continues to try to hammer out a deal. She refused to predict the odds of getting the bill approved in the House and Senate but she said she thought it could clear a committee vote tomorrow. “This has been so fragile at every step along the way that if we can get it through committee, great. And then if we can get it off the floor, great. But I think we’re still making our way through all that.”

Senate President John Cullerton has made it clear that he believes employees must be offered consideration for the reduction of their benefits. He supports a plan that would ask employees to choose between keeping their state subsidized health care or losing their compounded interest rate COLAs. Employees that chose to keep their compounded COLAs would also see their pensionable salaries frozen at the current level.

However, Rep. Daniel Biss, an Evanston Democrat, said the argument can be made that the public policy benefit of keeping the pension systems soluble outweighs the constitutional protection of retirees' benefits. “I think it’s important that the General Assembly speak with one voice about how big a solution is needed. Otherwise, we’ll muddy the question before the courts,” he said. Union officials blasted lawmakers today for leaving them out of negotiations over the proposal currently on the table. “We are extremely disappointed that Governor Quinn and legislative leaders have shut out the voices of workers and retirees in their latest talks on pension legislation. Instead, once again, Illinois politicians are preparing to use unconstitutional schemes to ruin the retirement security of hundreds of thousands of Illinoisans while ignoring the state's revenue problem,” said a statement from the We Are One Coalition. The group has already threatened a lawsuit if the proposal is approved and signed into law. “If the General Assembly rams through last-minute legislation that violates the Illinois Constitution, we are prepared to sue to protect the hard-earned benefits of teachers, caregivers, corrections officers, university employees and others.”

Nekritz said that House members working on the issue have met with union leaders. “We’ve met with labor. I would characterize it as an impasse. And so we’ve met, but I think that we’re not likely to come to any agreement.”

The Senate is not in session, but Cullerton did tell members that the chamber could return on Tuesday to take up any legislation the House might pass. When asked if the uncertainty of a Senate return has complicated efforts to put votes on the bill in the House, Nekritz said, “There isn’t any aspect of this that doesn’t complicate it right now.”

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