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Today’s numbers

Wednesday, Dec 4, 2013

* The AP published some pension reform bill impact numbers from the Center for Tax and Budget Accountability

Employee 1

    Retired teacher, 30 years of service

    Initial annual benefit: $67,000

    Annual pension benefit after 20 years of retirement: $121,009 a year under the current pension system; $91,183 under the proposed changes

    Cumulative 20-year decrease: $284,030

Employee 2

    Retired Department of Children and Family Services caseworker, 25 years of service

    Initial annual benefit: $30,000

    Annual pension benefit after 20 years of retirement: $54,183 under current system; $46,122 under proposed changes

    Cumulative 20-year decrease: $76,765

Employee 3

    Retired teacher, age 75, with 30 years of service

    Initial annual benefit: $25,000

    Retiree’s COLA increase would remain unchanged until benefit reaches $30,000, which is years of service multiplied by $1,000. After that, the annual benefit would drop below what it would be under the current system.

    Annual pension benefit after 10 years: $33,598 under current system; $33,529 under proposed changes

    Cumulative 10-year decrease: $137

- Posted by Rich Miller        

  1. - Formerly Known As... - Wednesday, Dec 4, 13 @ 1:01 pm:

    Significant numbers, and a significant diminishment.

  2. - titan - Wednesday, Dec 4, 13 @ 1:04 pm:

    I just ran figures for a soon to be retired special ed teacher friend (35 years service), the cumulative 20 year difference would be $493,000 and change.

  3. - RNUG - Wednesday, Dec 4, 13 @ 1:06 pm:

    Right in line with what I was calculating the other night.

  4. - RNUG - Wednesday, Dec 4, 13 @ 1:09 pm:

    Should have added, these CTBA numbers had some assumptions about the CPI-U adjustment tot he $800/$1000 portion of the formula. A slight upward change in that CPI-U assumption will result in even greater diminishment. I used a couple of different CPI-U assumptions to come up with the ranges I was citing.

  5. - Working Man - Wednesday, Dec 4, 13 @ 1:11 pm:

    So Employee 1 + 2 will lose the most and have less to put back into the economy, especially at the local level. Retirees will need to cut back somewhere losing this amount of money. This will not help create jobs. And the way property taxes are in the Chicagoland area, I think you’ll see more retirees looking to move out of state.

  6. - anonymouse - Wednesday, Dec 4, 13 @ 1:12 pm:

    I guess its all syntax but decrease equates to diminishment in my mind.

  7. - Dan - Wednesday, Dec 4, 13 @ 1:12 pm:

    Very detailed analysis also on the TRS website. ( Bottom of the first bullet posting.

  8. - Son of SuperAbe - Wednesday, Dec 4, 13 @ 1:16 pm:

    Looks like real reform to me.

  9. - Darienite - Wednesday, Dec 4, 13 @ 1:18 pm:

    ++And the way property taxes are in the Chicagoland area, I think you’ll see more retirees looking to move out of state.++
    They will need to go to a state that pays no state income tax, or stay in Illinois.

  10. - dupage dan - Wednesday, Dec 4, 13 @ 1:19 pm:

    I said it before, those who rely completely on their Il pension (no SSA) really are the ones who are going to get skinned. I get a combined IL/SSA pension and my results will look more like the last example. Was this a calculated move so as to create a wedge between some of these groups? Can the big losers expect some support from those not losing so much? Does it really matter now that the legislation has passed? Does the equal protection part of the US Constitution become part of this as a result?

  11. - gesquire - Wednesday, Dec 4, 13 @ 1:19 pm:

    Yes but we’re getting a guranttee and the right to ask the retirement system to sue on our behalf.

  12. - Robert the Bruce - Wednesday, Dec 4, 13 @ 1:23 pm:

    Interesting examples. I bet both sides will be cherrypicking examples to prove their case, and I wonder which examples might represent an average retiree.

    Employee 1 and Employee 3 are both teachers with 30 years of service, but with very different initial benefits ($67k vs $25k). What is a more typical case for someone who spent most of their working life as a teacher? Is employee 1 typical? A pension of $91k still seems generous to me.

  13. - Working Man - Wednesday, Dec 4, 13 @ 1:23 pm:

    Darienite -

    Yep Florida (with Oberweis’s wife) or Washington State or Belize!!

  14. - Leave a Light on George - Wednesday, Dec 4, 13 @ 1:25 pm:

    What date are the pension changes effective?

  15. - Challengerrt - Wednesday, Dec 4, 13 @ 1:25 pm:

    I’m definitely out of here when I retire with 41 years! Their taking some of mine away so I’m taking some away from the State’s economy!

  16. - YAYLisa! - Wednesday, Dec 4, 13 @ 1:29 pm:

    Um…it’s a little disingenious to quote numbers from the Center for Tax and Budget Accountability and represent them as being honest and objective. They are entirely funded by public unions and liberal groups. Why don’t you just print the calculations of the Illinois Policy Institute and contend that they are totally unbiased, too?

  17. - Jack Handy - Wednesday, Dec 4, 13 @ 1:32 pm:

    I think the State will argue, “How can you call this a diminishment when the annuity is increasing yearly?”

    Not a good argument, but perhaps the best they got?

  18. - RNUG - Wednesday, Dec 4, 13 @ 1:45 pm:

    Leave a Light on George - Wednesday, Dec 4, 13 @ 1:25 pm:

    As it stands now, June 1, 2014

    for more details, see my comment in another thread.

  19. - Irish - Wednesday, Dec 4, 13 @ 1:46 pm:

    So the dilemma for a lot of us becomes;

    Does one go before December 31, so they get their COLA next January 1 and miss the 1 time skip. (Even though one is not quite ready to go.) and that COLA could be 1.5% due to the new rules.

    Or stay and gain several more months at a higher salary which could get a person almost to that 1.5% in an increase in pension, and bet that the COLA restrictions will be found unconstitutional.

    Working on my paperwork right now until I get the numbers crunched.

  20. - RNUG - Wednesday, Dec 4, 13 @ 1:48 pm:

    YAYLisa! - Wednesday, Dec 4, 13 @ 1:29 pm:

    CTBA makes no bones about their agenda, but they do put out honest numbers and explain exactly how they calculated them. They can’t lie about the numbers; it’s too easy to double-check their calculations.

  21. - RNUG - Wednesday, Dec 4, 13 @ 1:52 pm:

    Irish - Wednesday, Dec 4, 13 @ 1:46 pm:

    That’s it in a nutshell. It will all depend on your final average compensation number.

    Bet either State payroll or SRS is getting inundated with people trying to determine their FAC. Just what they need on top of the retirees trying to make their State Medicare Advantage choice.

  22. - Curmudgeon - Wednesday, Dec 4, 13 @ 1:53 pm:

    As a State employee with 34 years, the diminishment in 20 years would fall between $137,224 and $144,268, depending on the CPI changes (I used 1 to 6%). In 20 years, I could purchase 21.5 to 22.5 percent less with my pension.

    Based on what I used as a lifetime projection, the diminishment would be $213,931 to $225,438, with purchasing ability declining to 27.3%

  23. - Arthur Andersen - Wednesday, Dec 4, 13 @ 1:54 pm:

    I will second RNUG’s point about CTBA’s calculations, etc. I have read (and used) their work for years and never found a fudged figure.

  24. - Ready To Get Out (soon) - Wednesday, Dec 4, 13 @ 1:54 pm:

    Irish….if you decide to wait at a higher salary for a few months, don’t forget to average that out over four years and then multiply by your percentage. You might find that it amounts to pocket change as I did. Hope that helps.

    I am not waiting.

  25. - Irish - Wednesday, Dec 4, 13 @ 2:03 pm:

    Ready - I am in a recently unionized position. Our pay was low compared to our duties. As a result the first year of my last 48 months drags down my monthly benefit. I was hoping to replace those years with more months at current salary more commiserate with duties and responsibilities.

    I am waiting on figures from SERS showing both scenarios.

  26. - Norseman - Wednesday, Dec 4, 13 @ 2:05 pm:

    After having a chance to read the CCR and see it didn’t contain the cap for annuities over the calculable amount as in one of the earlier proposals, I recalculated the impact. I’m estimating a hit of $250,000 over 20 years. So these numbers look to on target.

  27. - Leave a Light on George - Wednesday, Dec 4, 13 @ 2:07 pm:

    Thanks RNUG

  28. - Earl Shumaker - Wednesday, Dec 4, 13 @ 2:08 pm:

    Not only will these slashed COLAs have a dire impact on retiree’ and their families’ standard of living, but smaller COLAs will result in less money being plowed back into the local economies

  29. - cod - Wednesday, Dec 4, 13 @ 2:18 pm:

    The CBOT calculation is understating the reduction because averages underestimate the actual impact on an individual financial plan. Their accountants are calculating in the method used to estimate the average savings to the state. This method serves a purpose, but it is not appropriate for an individual because it makes the retirees total diminishment look smaller.

    Calculated from the annuitants perspective, the retiree cannot use the 20 year average because he has a 50% chance to live longer than that. The annuitant’s calculation projects how much he can spend per year at a steady rate over his life. The projection typically runs to age 95, and it requires saving part of the pension payouts for about half the lifespan, then spending those savings later to maintain an equal value for each year.

    It may be difficult to understand this financial planning principle, but if you get it wrong you will be in big trouble if you find yourself in the upper 50 percentile of life spans.

  30. - Retired UIUC - Wednesday, Dec 4, 13 @ 2:18 pm:

    One thing that is still not clear to me about the $800/$1000 portion of the formula. I have minimal Social Security credits (barely enough quarters in to qualify for a Social Security annuity - about $270 per month after WEP when I’m 65). This is from work done before I was covered by SURS, including when I was in the Army in Vietnam making something like $300 a month. Will they use the $800 part of the formula or will they use the $1000 part.

  31. - Phenomynous - Wednesday, Dec 4, 13 @ 2:19 pm:

    Employee 1 = $1,624,030 20 year benefit.

    I’m thinking that they paid nowhere near that much into the system, even with heavy return growth.

    Of course, this doesn’t make up for a broken promise.

  32. - Earl Shumaker - Wednesday, Dec 4, 13 @ 2:19 pm:

    My rep voted against this so-called “pension reform” legislation. One of the reasons he gave was because “the annual cost savings this bill generates has not been earmarked for pension reform”
    So here we go again. The reason we are in the pension mess we are currently in is because in lieu of raising taxes for state services and programs, money legally meant for the pensions was diverted to fund state services and programs.

    And now these legislators plan apparently to continue the same practice of “robbing Peter to pay Paul” with the money they plan to rob from the COLAs? Unbelievable

  33. - Anonymous - Wednesday, Dec 4, 13 @ 2:20 pm:

    Jorgensen vs Blagojevich

    In reaching this result, we acknowledge that substantial budgetary challenges currently confront the Governor and the General Assembly. The adverse economic conditions facing so many of our fellow citizens have taken an inevitable toll on the state’s treasury. Revenues are not keeping pace. Despite ongoing efforts by the Governor and legislature, shortfalls persist. We do not mean to diminish the seriousness of the situation or appear insensitive to the difficulties faced by our coordinate branches of government. Those difficulties are undeniable, and we are highly cognizant of the need for austerity and restraint in our spending. As administrators of the judiciary, we make every effort to economize whenever and however we can. One thing we cannot do, however, is ignore the Constitution of Illinois.

    This court did not set the salaries judges receive, nor did we make COLAs a component of those salaries. The salaries, including their COLA component, were provided by law in the manner described earlier in this opinion, Now that those salaries have been implemented, the constitution commands that they be paid. No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem

  34. - A small point - Wednesday, Dec 4, 13 @ 2:28 pm:

    Working Man, Darienite -
    Illinois does not tax retirement income. If you make less than $55,000 and are a senior, you are eligible for various property tax assessment freeze or reduction programs. Acknowledging these do not mitigate the full impact of reduced COLAs, but important to remember when assessing the full impact on these individuals….

  35. - Confused - Wednesday, Dec 4, 13 @ 2:30 pm:

    RNUG or Rich

    Ok…kind of a sidenote but I was just wondering whether the rule of 85 still stands on its own since the amendment of retirement age states that the additional time would be added to the minimum retirement age? The rule of 85 technically does not have a minimum retirement age so does this mean it is rule of 85 plus x-amount of years or is it still just rule of 85?

  36. - just asking - Wednesday, Dec 4, 13 @ 2:39 pm:

    Retired UIUC seems to have a valid point. To expand it, what nexus exists between anything else in an annuitants financial situation and where you set their benefit. While not real significant in $ terms the $1,000/$800 concept seems real shaky when you match it with the constitutional contractual relationship stuff. For the right to sue and the guarantee to fund, the pension members are agreeing to an even smaller COLA if they get SS? Even if they are not receiving it because they are not old enough or choose not to because it increases the longer they wait to take it. Very convoluted. I have always felt Rita Ross, Mary Jane Birdsong and Anne Wilson along with the band would do the chubby checker thing to find constitutionality. The Senate Dem white paper or whatever really stressed that pension system members making some material choice validated the contractual relationship concept of a contract amendment. That would be a hook for the Supremes to hang their robes on. Can anyone see anything resembling a hook here? Is this on purpose?

  37. - titan - Wednesday, Dec 4, 13 @ 2:42 pm:

    +++ - Robert the Bruce - Wednesday, Dec 4, 13 @ 1:23 pm:

    … Is employee 1 typical? A pension of $91k still seems generous to me. +++

    A pension of $91k - in current dollars - could probably be deemed generous. But the current 3% COLA scenario historically worked out to be very close to actual inflation rate. If that holds true in the future the result would be the equivilant of reducing the intial $67k pension to a little over $50k in inflation adjusted dollars at the 20 year mark.

  38. - Where will it end - Wednesday, Dec 4, 13 @ 2:50 pm:

    The other question is will the ISC see the so called stabilization of the pension system enough consideration to offset the diminishment of the COLA.?

  39. - RNUG - Wednesday, Dec 4, 13 @ 2:52 pm:

    Retired UIUC - Wednesday, Dec 4, 13 @ 2:18 pm:

    I think it depends on the answer to were you a coordinated (paid into SS while employed by the State) or non-coordinated employee (didn’t pay into SS while a state employee)?

    The reason it matters is you paid a different amount into the pension system, depending on your status. If you worked for a State University in a teaching position then you were probably non-coordinated and paid 8.5% (8% pension plus 0.5% COLA) and the $1,000 * years figure should apply to you (unless you are in one of the “optional” plans). If you worked for a Community College under SURS, then you were probably coordinated and paid 4.5% (4% pension plus 0.5% COLA) and the $800 * years figure should apply to you.

    Don’t forget that, as a non-coordinated member, you are probably looking at losing part of your SS benefit due to the federally mandated government windfall / offset provisions even though you acquired the SS credits from work having nothing to do with your state employment.

    Because this is new and also because the fed offset rules are complicated, be sure to double-check with both your pension person and SSA, but I’m pretty sure that how it’s going to work for you.

  40. - Joe M - Wednesday, Dec 4, 13 @ 3:19 pm:

    ==The other question is will the ISC see the so called stabilization of the pension system enough consideration to offset the diminishment of the COLA.? ==

    Calling the State making its payments like it was supposed to be doing all along - a consideration, - is like giving a bank thief a good citizenship award for promising not to rob a bank next year.

  41. - RNUG - Wednesday, Dec 4, 13 @ 3:21 pm:

    Confused - Wednesday, Dec 4, 13 @ 2:30 pm:

    Just reread the whole (c) modifies (b) part of the minimum retirement age for the various sections. Short answer is I can’t tell about “rule of 85″.

    Here’s how I read it (SERS example, others similar):

    For minimums, the “8 years at age 60″, “25 years at age 55″ and “rule of 85 with a minimum of 35 years of service” still exist. However, if you will be less than age 46 on June 1, 2014 those age numbers will change upward. For every year of age below 46, add 4 months to the above minimum ages. The maximum change is 5 years, so it could become “8 years at age 65″ and “25 years at age 60″.

    It’s not clear if there is any change to the “rule of 85″ because that has no predefined minimum age, just a pre-defined minimum service of 35 years which tends to imply an age in the mid 50’s.

  42. - foster brooks - Wednesday, Dec 4, 13 @ 3:21 pm:

    The elephant in the room is cola a pension benefit?

  43. - Ready To Get Out (soon) - Wednesday, Dec 4, 13 @ 3:26 pm:

    @Irish 2:03

    Exactly. Sounds like you are on the right path. I’m also union, but my overall average being at the top of the steps for years has been fairly steady with some growth. Staying around another year, or even months wasn’t worth it for me.

    Good luck!

  44. - RNUG - Wednesday, Dec 4, 13 @ 3:27 pm:

    foster brooks - Wednesday, Dec 4, 13 @ 3:21 pm:

    We will see. According to Eric Madiar and others, the protection of the pension clause is for both the pensions themselves AND “enhancements granted by the General Assembly”.

    Unless I was delusional that day, it was the GA that enacted the 3% AAI …

  45. - Sir Reel - Wednesday, Dec 4, 13 @ 3:29 pm:

    Gosh I should have retired 20 years ago! Unfortunately I retired last year and was looking forward to my COLA. After years as a non union employee with no raises, it was a major reason to retire - to get a raise. Oh well.

  46. - RNUG - Wednesday, Dec 4, 13 @ 3:32 pm:

    Joe M - Wednesday, Dec 4, 13 @ 3:19 pm:

    LOL. I may have to steal that bank thief line …

  47. - Confused - Wednesday, Dec 4, 13 @ 3:43 pm:


    A minimum requirement of 35 years would be a MAJOR change to the rule of 85 but I am not reading it like that. It says:

    A member who has at least 35 years of creditable
    service may claim his or her retirement annuity at any age. A
    member having at least 8 years of creditable service but less
    than 35 may claim his or her retirement annuity upon or after
    attainment of age 60 or, beginning January 1, 2001, any lesser
    age which, when added to the number of years of his or her creditable service, equals at least 85.

    I am with you in not really knowing one way or the other and i know there are a lot of people I know that are hoping it is not rule of 85 plus up to 5 more years depending on your age. I was reading it as the changes are being made to minimum retirement age-based requirements but with rule of 85 not having one, maybe it will sneak thru :) I am a young one so I have a LOT more years to go but because of you and this blog i seem to be well informed….so I get a lot of people asking

  48. - catrike - Wednesday, Dec 4, 13 @ 3:52 pm:

    There is only a reduction in the growth of the pension benefit no actual reduction or diminishment of the benefit itself. The predictions of Alpo diets are greatly exaggerated. The typical Illinois state pension will continue to dwarf those in our sister midwestern states.

  49. - Anonymous - Wednesday, Dec 4, 13 @ 3:54 pm:

    My husband figured out that we will take a loss of $162,000 over 20 years because of pension reform. That figure DOES NOT include what we are paying for his insurance that was suppose to be free. Retirees are taking a MAJOR hit.

  50. - Mason born - Wednesday, Dec 4, 13 @ 4:04 pm:


    Ya because if you were supposed to get 121k 20 years after you retire and instead you only get 91k you aren’t diminished at ALL? Nice try.

  51. - Marty - Wednesday, Dec 4, 13 @ 4:31 pm:

    The “Jorgensen v. Blagojevich” reference by Anonymous 2:20pm should be required reading before anyone takes a position on this subject. I fear the majority of our GA did not read before voting.

  52. - No-Name-Nick - Wednesday, Dec 4, 13 @ 4:56 pm:

    So can any body tell me? Does this bill essentially end the rule of 85? Does it affect when you can retire with so called “full” benefits?

  53. - RNUG - Wednesday, Dec 4, 13 @ 4:58 pm:

    Confused - Wednesday, Dec 4, 13 @ 3:43 pm:

    I see how you could read it that way. I was assuming the first sentence of 35 yrs service / any age is the overriding rule. If the bill stands, I guess some judge will have to figure it out.

  54. - RNUG - Wednesday, Dec 4, 13 @ 5:00 pm:

    No-Name-Nick - Wednesday, Dec 4, 13 @ 4:56 pm:

    It doesn’t end rule of 85. What we can’t tell for sure is if it modifies the requirement a bit.

  55. - No-Name-Nick - Wednesday, Dec 4, 13 @ 5:01 pm:

    Sorry didn’t see the discussion above.

  56. - RNUG - Wednesday, Dec 4, 13 @ 5:04 pm:

    No-Name-Nick - Wednesday, Dec 4, 13 @ 4:56 pm:

    I don’t remember reading any changes in the bill to the maximum benefits that could be earned.

    So-called full benefits still require 44 years and 11 months of service time for a 1.67 SERS employee (75% / 1.67%).

  57. - DuPage - Wednesday, Dec 4, 13 @ 5:05 pm:

    RNUG-Community college employees are not in the social security system, only in SURS.

  58. - RNUG - Wednesday, Dec 4, 13 @ 5:13 pm:

    DuPage - Wednesday, Dec 4, 13 @ 5:05 pm:

    Thanks for the correction.

    I never can remember where that split is for SURS participants. As far as I’m concerned, that is the most complicated of the 5 retirement systems. I’m got a spreadsheet I created on my other computer that mostly lays it out, but even using that I sometimes get confused on who (effectively speaking) falls under TRS rule equivalent and who falls under SERS rule equivalent.

  59. - Ruby - Wednesday, Dec 4, 13 @ 5:17 pm:

    For public employees this pension bill is changing the rules in the middle of the game, but for retirees this pension bill is changing the rules of the game after the game is over.

  60. - Anonymous - Wednesday, Dec 4, 13 @ 5:36 pm:

    The Constitution says membership in a pension system the benefits of which may not be diminished. As member of the system a benefit that I paid for for 30 years at 1% of my gross salary was the 3% AAI. I am already retired and only take a big hit on this. I get nothing.

  61. - Justa Joe - Wednesday, Dec 4, 13 @ 5:37 pm:

    Agree with Ruby

  62. - bullet - Wednesday, Dec 4, 13 @ 5:42 pm:

    all state pension people must have to keep an Il. res. to get $ so they all don’t move out of the state now and forever.

  63. - bullet - Wednesday, Dec 4, 13 @ 5:49 pm:

    1% of your salary, big deal the church gets ten. everyone wants all kinds of services , that means someone has to pay, the poor working fool who hardly uses any of them.

  64. - bullet - Wednesday, Dec 4, 13 @ 5:54 pm:

    hello, anonymous, when you eat a meal out don’t you tip 15%

  65. - Anonymous - Wednesday, Dec 4, 13 @ 6:09 pm:

    I did pay. The 1% was only the part for the AAI and I paid more for the annuity itself.

  66. - Anonymous - Wednesday, Dec 4, 13 @ 6:16 pm:

    The average FAMILY in Illinois makes 68,000 a year currently. Please put that into context when discussing pensions.

  67. - No Raise - Wednesday, Dec 4, 13 @ 6:36 pm:

    The Rule of 85 is not affected for anyone over 45 on the effective date of legislation, which cannot be earlier than June1, 2014. For those under 46, thee is a very slight increase which gradually goes higher up to 5 years for the youngest employees.

  68. - Mama - Wednesday, Dec 4, 13 @ 9:11 pm:

    People under the TRS system have to retire in Feb or lose a whole year. Should one throw that year away and retire the end of Dec? There are people in one state agency that are in 3 or 4 different pensions (SERS/SS/TRS or SURS) depending on their job(s). How does one work the numbers for people in more than one retirement system?

  69. - Person 8 - Wednesday, Dec 4, 13 @ 10:00 pm:

    There use to be a part in the law that stated workers who have 35 years of service could retire after year 35 with full benefits regardless of age. Did they whip this out, or is it still in there?

  70. - Ready To Get Out (soon) - Wednesday, Dec 4, 13 @ 10:22 pm:

    Anonymous @ 6:16 pm

    If you want to compare, I’d prefer to put it in the context of the salary of CEOs of the top 350 companies, which is $14.1 MILLION dollars (Washington Post, June 16, 2013). In that sense, our pensions are paltry.

  71. - RNUG - Wednesday, Dec 4, 13 @ 11:11 pm:

    Person 8 - Wednesday, Dec 4, 13 @ 10:00 pm:

    You didn’t specify which system you were referring to, so I’ll give a short description of each of the 5 systems since the rules vary quite a bit. I’m going to round some of the service time up to whole years. And other than SERS, which is the most straightforward of the bunch, I’m going to skip all the nitty gritty accrual details.

    Under SERS normal formula (the typical actual State employee), you are entitled to retired at any age with 35 years but your pension was 35 times whatever the accrual rate was. This hasn’t changed. The current rate is 1.67% per year. If you multiple 35 years * 1.67%, you end up with a pension of 58.45% of final average compensation. This plan maxes out at 75% with 45 years.

    If you are SERS life safety (various risky jobs), then you fall under a higher 2.2 rate. It maxes out at 80% with 32 years of service.

    (Note: there are some life safety variations to some of the other systems, but I’m not going to cover all those variations.)

    If you happen to be in JARS (a judge), you max out at 85% with 26 years.

    If you happen to be in GARS (general assembly and other elected officials), you max out at 85% with 20 years.

    Under SURS (universities), under the traditional formula you max out at 80% with 36 years. There are some other options with differing results.

    Under TRS (teachers), in general you max out at 75% with 34 years. There is at least one option that can result in over 75%.

  72. - RNUG - Wednesday, Dec 4, 13 @ 11:18 pm:

    Mama - Wednesday, Dec 4, 13 @ 9:11 pm:

    The people at whichever system you are currently a member of should be able to do the necessary calculations for you based on whatever retirement date(s) you specify.

  73. - RNUG - Wednesday, Dec 4, 13 @ 11:22 pm:

    Correction to 11:11 pm post: that was JRS, not JARS …

  74. - Anonymous - Thursday, Dec 5, 13 @ 12:39 am:

    I think GARS also get an additional 3% for every year over 20 and that Madigan is already over 100%.

  75. - Person 8 - Thursday, Dec 5, 13 @ 5:45 am:

    Thanks RNUG,
    Sorry I didn’t specify. Looking at the law, just before the RULE 85 it states:

    (b) A member who has at least 35 years of creditable service may claim his or her retirement annuity at any age.

    So a young Tier One workers who started in their early 20’s would reach 35 years around 57-58. Would they still be able to retire using this rule, or is it now just 65.

    The part that confuses me is the “Notwithstanding”. Does this mean ignore subsection b?
    (c) Notwithstanding subsection (b) of this Section, for a
    Tier 1 member who begins receiving a retirement annuity under
    this Section on or after July 1, 2014, the required retirement
    age under subsection (b) is increased as follows, based on the
    Tier 1 member’s age on June 1, 2014:

  76. - Person 8 - Thursday, Dec 5, 13 @ 6:24 am:

    Didn’t specify again.TRS

  77. - chuck - Thursday, Dec 5, 13 @ 6:26 am:

    The problen for the State is when they applied the law to current retirees. They have already entered into a contractual relationship. They unilaterally changed that and diminished benefits with the new COLA provision. The new law would stand a much stronger standing if current retirees had been exempted.

  78. - Mason born - Thursday, Dec 5, 13 @ 7:17 am:

    Person 8

    Just FYI RNUG made a typo at 11:11 security staff under SERS get 2.5% per year not 2.2%.

  79. - RNUG - Thursday, Dec 5, 13 @ 7:57 am:

    Mason born - Thursday, Dec 5, 13 @ 7:17 am:

    Anonymous - Thursday, Dec 5, 13 @ 12:39 am:

    Thanks for keeping me honest. It’s hard to summarize this stuff while flipping between screens to copy the various numbers …

  80. - RNUG - Thursday, Dec 5, 13 @ 8:01 am:

    Person 8 - Thursday, Dec 5, 13 @ 5:45 am:

    I read it to mean that (c) modifies / changes the ages specified in (b). As a couple of us were discussing earlier, we can’t tell if the “rule of 85″ is modified by (c). I think the consensus ended up we don’t think so but aren’t sure.

  81. - Confused - Thursday, Dec 5, 13 @ 8:13 am:

    Is the loss of the Cola, really a loss? Who retires with household budget based on a long term projection with the Cola included? Wouldn’t one retire by planning what your pension is at day one? And, for SERS employees, how many of you tried really plan by investing in your deferred compensation plan? The AP article exacerbates the “loss” to employees.

  82. - RNUG - Thursday, Dec 5, 13 @ 8:14 am:

    Mason born - Thursday, Dec 5, 13 @ 7:17 am:

    That darn ‘D’ I got in summer school typing class just keeps coming back to haunt me! Think it had anything to do with being the only boy in a class of about 25 teenaged girls?

  83. - RNUG - Thursday, Dec 5, 13 @ 8:19 am:

    Confused - Thursday, Dec 5, 13 @ 8:13 am:

    At lot of the SERS people I worked with were heavily into the deferred comp program and, if they maxed that out, either traditional or Roth IRAs.

    And when you know the AAI is guaranteed, you do include it as part of your inflation protection plan in retirement.

  84. - Person 8 - Thursday, Dec 5, 13 @ 8:27 am:


    Yeah, defiantly confusing. If you take it at its word, even without the 85 rule, a 30 year old who already has 6-8 years of service should be able to retire around 57-58 irregardless of the new retirement at rule.

  85. - No Longer A Lurker - Thursday, Dec 5, 13 @ 8:31 am:

    A question if I may, how is this amount given in the TRS example being figured….

    From TRS

    For example: A member aged 55 that will retire at 61 with 30 years of service and an initial pension of $48,216:

    1st COLA — $49,145
    5th COLA — $53,305
    10th COLA — $59,312
    15th COLA — $66,361
    20th COLA — $74,632
    25th COLA — $84,338

    So If I understand this correctly the threshold for this example is 30000, so therefore 3% of 30000 is 900. 900 added to 48216 is 49116 not 49145. What am I not understanding here? Thanks

  86. - Dan - Thursday, Dec 5, 13 @ 8:50 am:

    Lurker, as I understand it, the $1000 per year ($30,000 with 30 years) is adjusted for inflation annually, which might explain the inconsistency you see. A partial answer at best.

  87. - RNUG - Thursday, Dec 5, 13 @ 9:22 am:

    No Longer A Lurker - Thursday, Dec 5, 13 @ 8:31 am:

    The $800/$1,000 multiplier is increased annually by the CPI-U. You have to guess at a number for the CPI-U since it is part of the formula. Working backwards from the numbers listed, I THINK they applied about a 3.2% CPI-U adjustment to the first year, which makes the $1,000 actually $1,032. That gets you within a dollar or two of the listed numbers. And it comes out fairly close to the 5 year number.

    If I was doing the example, I wouldn’t have used that high of a CPI-U. The higher the CPI-U used, the less the diminishment because more of the pension gets the fixed 3%. I’ve been using between 1.0% and 1.5% in my personal models, which shows more diminishment. People can honestly disagree over the future CPI-U figure.

    Also, I haven’t been applying a CPI-U adjustment to the first year like it appears was done here.

  88. - Mason born - Thursday, Dec 5, 13 @ 9:33 am:


    One boy and 25 girls it was 1 boy and 10 girls in my school (small School). while it hurt my grade i wouldn’t have taken the class if fewer girls. Of course maybe just maybe i should have seen the whole computer thing coming but as Homer would say Doh!!

  89. - illinifan - Thursday, Dec 5, 13 @ 9:59 am:

    Do we as university employees have a right to sue for return of the extra .5% we paid to fund the COLA? Since we won’t receive the COLA promised, then the state fraudulently collected these extra funds from us?

  90. - No Longer A Lurker - Thursday, Dec 5, 13 @ 2:50 pm:

    Rung, thanks for the clarification. I somewhat thought there was some fudge to the numbers based on the CPI

  91. - RNUG - Thursday, Dec 5, 13 @ 11:29 pm:

    No Longer A Lurker - Thursday, Dec 5, 13 @ 2:50 pm:

    Just for the record, it’s Retired Non-Union Guy aka RNUG … makes it easier to find your response if I’m skimming the comments

Sorry, comments for this post are now closed.

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