State Lawmakers Draft Bill to Overhaul Public Pensions

Legislators Fail to Consult Public Employee Unions on
Retirement Changes

The Illinois House of Representatives is considering legislation this week that will significantly change public employee pensions across the state.

Being drafted without input from public employee unions, Senate Bill 1946 could affect all state pension systems. It is expected to change municipal pension systems as well, including those governing Cook County and the City of Chicago.

House leadership has not provided any details to organized labor, but labor leaders expect the legislation to affect new hires in myriad ways. It will:

• Raise the retirement age for state pension systems to 67 with 10 years of service, or 62 with a six percent penalty on employee annuity for the next five years (amounting to a 30 percent annuity reduction over that period);

• Cap pensionable income at Social Security level, which is $106,800 (currently no cap);

• Set final average salary at the highest consecutive salary over eight of an employee’s last 10 years (currently, systems average the final four consecutive years of your last 10);

• Reduce cost of living increases (COLAs) to the lesser of three percent, or one-half of the Consumer Price Index, adjusted to inflation, with no compounded interest;

• Set survivor benefits at 66.7 percent (currently 50 to 100 percent);

• Require eight years to vest in any pension system; and

• Suspend participation in a second pension system if an employee receives a salary from another.

“The Teamsters will actively oppose Senate Bill 1946 until we have an equal opportunity to discuss the sweeping changes lawmakers are seeking to make to our public pension systems,” said John T. Coli, President of Teamsters Joint Council 25. “Our union represents more than 13,000 public employees who deserve respect and consideration from state legislators.”

The bill could also make changes to the state’s alternative formula, which offers a higher annuity and reduced retirement age for employees working in hazardous jobs. Teamsters who now participate in this formula include State Police Master Sergeants and various employees of the Illinois Department of Transportation, including highway maintainers.

Participation in the alternative formula could be limited to State Police and correctional officers only if the bill passes, which would also raise the retirement age to 60 with 20 years of service (currently, retirement begins at 50 with 25 years of service).

Joint Council 25 encourages all affiliated locals to ask members to contact their state representatives and tell them to vote NO on Senate Bill 1946 until an agreement has been reached with public employee unions.

To find your state representative, CLICK HERE.

Teamsters Joint Council 25 represents more than 100,000 hardworking men and women throughout Illinois.

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