State Rep. And house minority leader Tom Cross introduced a bill last week with Illinois Rep. Elaine Nekritz of Buffalo Grove that aims to trim the state’s pension costs.
In an editorial this weekend, the Chicago Sun-Times called the plan promising and urged lawmakers to pass the bill and make real progress toward solving one of the state’s biggest financial worries.
The bill includes the following new provisions for Tier I state employees, or those hired before 2011:
- Cost-of-living adjustments apply only to the first $25,000 of the employees’ pension
- That limit is reduced to the first $20,000 for employees eligible for Social Security
- COLAs are delayed until the employee turns 67 or five years after retirement, whichever comes first
- This applies to all employees and retirees who are currently receiving COLAs
- Retirement age is increased by:
- No increase for employees age 45 and older
- One year for employees age 40 to 44
- Three years for employees age 35 to 39
- Five years for employees age 34 and younger
- Employees would be required to contribute more toward their pensions by:
- One percent starting July 1, 2013
- Two percent starting July 1, 2014
The state is facing $98 billion in pension debt and has the worst credit rating in the nation. Moreover, it was revealed Monday that the state is also dead last when it comes to funding education.
According to the Sun-Times, the Cross bill could save the state $167 billion over the next 30 years.