Illinois House approves major pension reform bill – chicagotribune.com

21 Mar

SPRINGFIELD—The Illinois House today approved a major change in the state pension system that could save an estimated $100 billion by cutting down the exponential growth of automatic cost-of-living increases for retiree paychecks.

The 66-50 roll call represented the most far-reaching vote taken in the spring legislative session on pension reform and sends the measure to the Senate, which just approved a much less ambitious pension bill.

Political opposition remains strong, however, and prospects for the measure are uncertain. Illinois lawmakers have for years debated how to deal with the nation’s most underfunded public employee pension system without taking major action.

The legislation, sponsored by Rep. Elaine Nekritz, D-Northbrook, still would need to pass a Senate that has strong qualms about its constitutionality. But the measure was characterized repeatedly by supporters as a key component of any overhaul because it attacks the annual increases that are the biggest cost drivers in the pension system.

Under the proposal, automatic annual cost of living increases for state workers and teachers would only be applied to the first $25,000 of a person’s pension rather than the entire amount if it is higher. A retiree also would not get an annual cost-of-living increase until they have been retired for at least five years or until they are 67.

via Illinois House approves major pension reform bill – chicagotribune.com.

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