teacher/poet/musician glen brown: A Review of Pension Bills and Other Activity Last Week in Springfield

23 Mar

The following information is from Alliance Legislative Report

Several pension reform bills were acted upon last week. This week, more movement occurred as the momentum for final passage of a pension reform measure continues to build. The House of Representatives approved HB 1165 (Madigan, D-Chicago) Thursday which would limit the Cost of Living Adjustment (COLA) for the Teachers’ Retirement System (TRS). The COLA would be frozen until five years after the employee’s retirement or age 67. The COLA would be a flat 3% of the first $25,000 of the pension or $750 per year. The House has already approved other bills that would cap the pensionable salary amount and increase the retirement age on a graduated scale. The Senate has not acted on any of the bills the House has sent over.

The Senate this week approved an amended SB 1 (Cullerton, D-Chicago). The bill now only affects active Tier I members of TRS and would not force any changes to current annuitants of TRS. The bill would:

· Require active TRS members to choose between keeping the compounding 3% COLA, or accepting a lesser COLA and remain eligible for health insurance upon retirement. This “election” would have to be made between January 1, 2014 and May 31, 2014. The changes would take effect on June 1, 2014

· Exempt from the election TRS members who have signed an agreement with their school district on or before January 1, 2013 making an irrevocable decision to retire in the future

· Freeze the salary, for pensionable purposes, of active TRS members who do not choose the lesser COLA

· Offer TRS members who choose the lesser COLA participation in a new “cash balance” retirement plan operated by TRS that would supplement their Tier I annuity

· Offer the Early Retirement Option (ERO) to those TRS members who choose the lesser COLA

· Give TRS the right to sue if the State does not make its pension contributions on time. The bill, as currently drafted, does not contain provisions to shift pension costs onto local school districts. More…

via teacher/poet/musician glen brown: A Review of Pension Bills and Other Activity Last Week in Springfield.

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