ILLINOIS CAN SAVE $577M ON PENSIONS BY ADDING A DATE TO A LAW

Link:https://www.illinoispolicy.org/illinois-can-save-577m-on-pensions-by-adding-a-date-to-a-law/

Excerpt:

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

TO FIX ILLINOIS’ PENSION CRISIS, FIRST CHANGE ITS CONSTITUTION

Link:https://www.illinoispolicy.org/to-fix-illinois-pension-crisis-first-change-its-constitution/

Excerpt:

Illinois allocates more of its budget to pensions than any other state, but pension spending has only skyrocketed. A constitutional amendment is the only way to reform the state’s unsustainable and underfunded pension systems.

Daley College Professor Mike Crenshaw is far from retirement, but he constantly worries whether the State Universities Retirement System will be solvent for him.

“I have 20 years until I can retire, and my biggest fear is that the money’s not going to be there,” Crenshaw said.

….

Because pension benefits are defined in the Illinois Constitution, only a constitutional amendment approved by voters could change pension structures. Amending the constitution would open the door to changing the compounding raises to simple inflationary adjustments – protecting the systems for retirees and ending the excessive drain on taxpayers.

Author(s): Dylan Sharkey

Publication Date: 18 Jan 2022

Publication Site: Illinois Policy Institute