Essentially, all pension debt stems from Tier 1 benefits promised to state employees hired before 2011, like Crenshaw. Tier 2 employees hired after 2011 will likely pay more than their benefits will be worth to subsidize Tier 1 benefits.
Implementing optional Tier 3 plans is one of the solutions to Illinois’ woes set out in the Illinois Policy Institute’s Illinois Forward 2023. The General Assembly passed Tier 3 plans during the fiscal year 2018 budget process. A technical error left an implementation date out of the language, and it hasn’t been corrected since. Lawmakers could fix this oversight for fiscal year 2023, which begins July 1, 2022.
“A lot of times we’re not given the intricacies of how a Tier 3 or alternative pension plan could benefit us,” Crenshaw said.
Author(s): Dylan Sharkey
Publication Date: 3 Feb 2022
Publication Site: Illinois Policy Institute