State universities and community colleges reached an agreement with Illinois House Speaker Mike Madigan (D-Chicago) to assume responsibility for the retirement costs of their workers. “Whenever one person spends money and another person pays the bill, it’s bad policy, especially for government,” Madigan said.
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Under current law, the state pays the employer’s share of community college and state university employees’ pension costs. Under this agreement, should it become law, the institutions would gradually increase their contribution by one-half of a percentage point per year, starting in Fiscal Year 2015, so that in 22 years they are paying the full employer’s share of 11 percent of wages.
“The goal here, the plan at the end of all this, the employer will pay the pension costs,” Madigan said. A plan affecting Tier 2 benefits is still being negotiated. Employees are Tier 2 if they were hired in 2011 or after.