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Illinois Legislature Forges Ahead on Public Pension Liability

The Illinois legislature is considering a measure that would reform the public pension system in Cook County, the state’s most populous and where Chicago is located. The legislature’s action, which began before the state Supreme Court upended the 2013 pension reform law on May 8, is continuing to progress despite the ruling.

The bill, SB0843, was introduced in the state senate by Sen. John G. Mulroe (D-Chicago) on Feb. 11; the chamber passed it on April 21. The bill went to the state House of Representatives on that day; Rep. Elaine Nekritz (D-Buffalo Grove) is its sponsor.

SB0843 includes provisions that would make the following changes to the Cook County pension system:

  • imposing a cap on salary for pension purposes;

  • terminating the use of higher salaries earned in other retirement systems under the Retirement Systems Reciprocal Act;

  • incrementally decreasing “highest average annual salary”

  • incrementally increasing the required retirement age;

  • changing the manner of computing automatic annual increases in retirement annuities and widow’s annuities;

  • changing the program of enhanced benefits for elected county officers;

  • change funding, including the tax rate limitation;

  • authorizing alternative methods of funding;

  • in certain circumstances, authorize the diversion of certain state payments to the county;

  • requiring additional employee contributions; and

  • terminating a provision authorizing service credit to be granted under certain circumstances for service with a “governmental unit” as defined in the Retirement Systems Reciprocal Act.

The House Personnel and Pensions Committee passed SB 0843 on May 20; it is on the House calendar and final action is expected soon. If the measure is enacted as written it would be effective July 1, 2015.

Gov. Bruce Rauner (R) also is considering action, with Communications Director Lance Trover saying on the same day as the state Supreme Court ruling that amending the state constitution to make a distinction between benefits currently earned and those not yet earned should be part of the answer to the state’s pension woes.