How Leaders Want To Overhaul Illinois Pensions
Details are out on what the leaders of Illinois' General Assembly want to do to the state's retirement systems. They've released an outline of their deal.
After years of debate about what to do about the $100 billion dollars of unfunded liability Illinois has racked up for its pension systems, legislative leaders announced on Wednesday they had agreed to a deal. But they were tight-lipped about what all it involved.
That information has now been spelled out in a one-page overview, a memo passed out to members of the House and Senate.
The plan calls for changes in how the size of a pension is calculated, for both state workers who are already retired and current workers' future benefits.
Instead of automatic, compounded 3-percent annual bumps in benefits that critics blame for swelling the cost,
Illinois will use a formula that factors inflation and the length of an employees' career with the state.
Also, the retirement age will go up for any worker who is 45 or younger.
If a worker wants, he or she could forgo getting a set amount, and instead opt into a 401k-style plan.
In exchange for the cuts to benefit cuts, workers would get a small break - they'll put one-percentage-point less of their salary toward their pension. And if the state doesn't hold up its end of the deal, a worker could file a lawsuit.
To keep all of that set, the plan says the state can no longer bargain over pension benefits when negotiating contracts with unions.
Unions have knocked the plan, and say they'll sue to stop it; but others say it doesn't go far enough in reining in costs.
Legislators will vote on the deal on Tuesday.