SPRINGFIELD - Illinois Democrat Party chairman and Illinois House Speaker Mike Madigan (Chicago) has decided pension reform desperately needs to progress, and his plan to push pension payments to the local level just isn't going to fly now. So, Madigan's decided to kick that part of his pension fix down the road, and allow his pension reform negotiators to work on reform ideas that can pass the General Assembly and hopefully not be challenged in court.
Look for a Madigan-okayed compromise plan to be presented during the House lame duck session that begins Sunday and is scheduled to continue right up until noon on Wednesday, when the new General Assembly is sworn into office. Senate President John Cullerton has alerted Senate members to be ready to return Tuesday.
Madigan's negotiators are leaking these pension reform points, and the all-important difference is the State Journal Register's first story sentence on the pension breakthrough:
Following a switch in position by House Speaker Michael Madigan, legislators next week could consider a new state pension compromise.
From the State Journal Register -
*Only the first $25,000 of pension benefits for teachers, university employees, state workers and lawmakers would be subject to a compounding, 3 percent annual cost-of-living allowance. For members of the State Employees Retirement System who also receive Social Security benefits, the amount subject to a COLA would be capped at $20,000.
*All COLAs might be paused for the next five to six years (that detail has not been finalized). COLAs also would not be paid until a retiree reaches age 67.
*Employee contributions to the pension systems would increase by 1 percentage point on July 1 and another 1 percentage point on July 1, 2014.
*An employee’s pension would be based on his or her salary upon passage of the bill or the wage base for Social Security, whichever is higher.
*The bill would require certain amounts to be transferred from the state’s general revenue fund to the pension stabilization fund, presumably to address the current $96 billion owed to the pension systems. If the state attempts to skip payments, the retirement systems could go to court to enforce the law. This provision is sought by public employee unions to prevent future pension crises.
*A cash balance plan would be created for employees who began work after Jan. 1, 2011.