* A few days ago, I told subscribers about the possibility that the Senate Democrats might hold a vote on the three smaller pension bills that passed the House back in March, rather than pass the bigger Madigan bill, SB!. Those three bills are now starting to move…
Thursday is shaping up as a pivotal day in the Senate on pensions, with Cullerton saying he intends to survey his 40-member caucus on Senate Bill 1 and other pension-reform options
One of those options may involve three obscure bills that the House passed in March and that quietly began moving in the state Senate Tuesday evening.
Legislation to hike the retirement age for employees under 45, cap “pensionable” salaries at Social Security wages and delay when retirees can get compounding, annual cost-of-living increases was discharged from the Senate Assignments Committee.
The House passed all three bills in March in a series of test votes on pensions to gauge support for a comprehensive pension-reform package. The three bills contain key pieces of what eventually got put into Senate Bill 1, which has faced a flurry of intense union opposition.
“All legislative options for a comprehensive plan are being considered,” Cullerton spokeswoman Rikeesha Phelon told the Chicago Sun-Times Wednesday.
Expect a vote on SB1 as well, but Cullerton expects that one to die.
* Meanwhile, I told subscribers a little bit about this earlier today. Sun-Times…
A House-passed plan that Speaker Michael Madigan has endorsed to fix Illinois’ nearly $100 billion crisis contains a flaw that could amount to a legislative stake-in-the-heart in the state Senate, the top Senate Democrat said Wednesday.
Senate President John Cullerton (D-Chicago) said the legislation contains a provision that eventually could leave retired suburban and downstate teachers with less in benefits than they are legally entitled to if they qualified for Social Security benefits, potentially forcing teachers and the school districts that employ them to begin paying into Social Security.
* The We Are One report relies on the Teachers Retirement System’s actuarial analysis. From the union report…
Quotes from the TRS actuarial analysis and explanation follow:
“The Tier 1 employer normal cost is now negative.”
• During her media availability, Rep. Elaine Nekritz characterized this as a good development for school districts, saying “[t]here would be no shift” if a TRS cost-shift bill passed.
• This fails to recognize that TRS pensions would no longer qualify for a Social Security exemption. Far from paying nothing, under a TRS cost-shift, school districts would ultimately be on the hook to pay the employer’s portion (6.2%) of Social Security benefits.
• Once school districts are required to pay Social Security taxes, this will almost certainly necessitate massive property tax increases across the state.
• SB 1 would be the largest unfunded mandate imposed on school districts in history.
“The current proposal…creates a Social Security compliance issue for Tier 1 in addition to the existing issues for Tier 2.”
• SB 1 creates the same problem in Tier 1 as exists in Tier 2 – an inadequate pension benefit structure.
• Again, if SB 1 becomes law, school districts would eventually begin paying Social Security taxes because TRS pension benefits are too low to qualify for a Social Security exemption.
• It is likely that the same problems for TRS will also affect SURS.
“SB 1 provisions result in Tier 1 and Tier 2 members paying for more than the cost of their benefits.”
• The SB 1 pension cuts are so absurdly deep that workers would actually be paying more than what their pension benefit is worth.
• This is more than just completely unfair. It is immoral and illogical. SB 1 creates a pension system that actually penalizes its members. The bill slashes pensions so aggressively that employees would face a monetary loss by being part of the pension system.
• The bill goes to extremes to hurt working, middle-class families.
* Senators expected to discuss pension plans
* Pension Solution Continues To Elude Legislators