State Senator Bill Brady (R-Bloomington) has signed on as a co-sponsor of Senate Bill 2404 which would implement pension funding changes proposed by the “We Are One” pension labor coalition.
“In his budget address last week Governor Quinn repeatedly stressed the importance of pension reform. Unfortunately, while the Governor may recognized the overwhelming need to reform our indebted pension system, he has failed to lead on the issue and propose reforms,” said Brady. “In January I attended a pension summit hosted by the ‘We Are One’ coalition where various reforms were discussed. Senate Bill 2404 contains many of those reforms. While I applaud our public employee unions taking this step in the right direction, I also believe we must have a discussion about prospective COLA’s as well as future earned increases, while maintaining the constitutional mandate against reducing the benefits already earned by employees.”
While the measure would not make changes to employee benefits, it does offer several funding changes. Senate Bill 2404 would:
- Require “tier 1” employees, those hired or elected before Jan. 1, 2011, to pay an extra 2 percent of their salary in contributions to the systems. This higher contribution would be phased in over two years starting with an extra 1 percent in the 2014 fiscal year and the second 1 percent phased in a year later. This reform would apply to members of all state retirement systems, except the Judges retirement system
- Change the pension funding formula to increase state payments to the four systems beginning in the 2015 fiscal year by requiring the state to fund 100% over 30 years.
- Create a tough funding guarantee under the Illinois Constitution’s pension protection clause, allowing the systems and individuals to sue to enforce state payments.
- Require the state to make additional payments beginning in the 2016 fiscal year using funds freed up by paying off pension bonds.
“Illinois leaders have sat back too long waiting for the pension crisis to fix itself,” said Brady. “Unfortunately, irresponsible management over many years has brought Illinois’ pension system to the brink of collapse. It’s time to address these problems, make sure that our pension system is fiscally solvent, and ensure that the people who have paid into it all their working lives get the benefits they have earned.”