Yet another plan to fix the state’s public pension system has been proposed. The Illinois Policy Institute has unveiled a plan that would require state employees to transition to a 401(k)-type retirement plan, similar to what some 15,000 university employees are doing.“Our pension reform plan immediately reduces the unfunded liability by half and gives government workers the secure retirement they deserve,” said John Tillman, chief executive of the Illinois Policy Institute.
In the case of schools, the proposal calls for the employer contribution to shift from the state to local school districts.
While current employees already vested in the pension system would have to enroll in a 401(k)-type plan, they wouldn’t lose those vested pension credits.
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Under the plan, the retirement age for public employees would rise and the cost of employee health care contributions would rise on a sliding scale based on age and income.
Tillman says the plan also pays down the $9 billion backlog of bills and repeals the 2011 state income tax increase. He says the plan is based on findings by the Commission on Government Forecasting and Accountability, so it should sit well with lawmakers.
State Rep. Tom Morrison (R-Palatine) has introduced H.B. 3303, which is based on the institute’s pension reform plan. There are two other plans that have garnered support. Any new pension law is expected to face a court challenge.