* No hat tip from the AP, but they were able to get the same pension reform outline that I obtained earlier today for subscribers.
This is not a done deal, by any means. There is no consensus as of yet on the pension reform conference committee. It’s a list of items that conference committee members have agreed to forward to the actuaries.
I’m also assuming that the Chicago Tribune will hate it. Why? Because despite lowering retirement income, the plan reduces employee contributions by a percentage point. The Tribune and Ty Fahner have been screaming for higher worker contributions for a long time now. So, why lower them? The concept of “consideration” is one reason. Give them something in return for taking other things away. Also, you gotta throw the unions some sort of bone if you’re gonna actually pass a bill.
Anyway, the AP’s take…
A bipartisan panel tasked with solving Illinois’ multibillion-dollar pension crisis is considering a framework that would save the state about $145 billion over 30 years, largely by ending automatic 3 percent cost-of-living increases for retirees. […]
It calls for setting retirees’ annual cost-of-living increases at half the rate of inflation, though it would set both floors and caps — which were not included in the outline — for what the rate would be. That formula would likely equate to smaller adjustments than the current 3 percent increases, compounded annually.
Employees would contribute 1 percent less to their own retirement, according to the document. But their annual pension benefit would be based on their salary over their career, rather than on the higher amount they’re making right before they retire.
It would reduce the state’s nearly $100 billion unfunded pension liability by about $18.1 billion and fully fund the retirement systems within 30 years.