On Dec. 5, 2013, Gov. Quinn signed SB 1, the comprehensive pension reform bill, into law (Public Act 98-599). The bill's components, mostly based on an earlier conference committee report, represent compromise language hashed-out by legislative leaders. Both chambers approved the bill almost simultaneously on Dec. 3, 2013. (The House voted 62-53 and the Senate voted 30-24.)
The main elements of the reform package include:
- Reduction of the Automatic Annual Increase for current and future Tier 1 retirees
- Automatic Annual Increase deferments for future Tier 1 retirees
- Capping pensionable earnings for Tier 1 participants
- Delaying the retirement age for current Tier 1 state workers under age 45
- Eliminating the use of sick and vacation days for service credit or pensionable earnings for future participants
- Changes to the Effective Rate of Interest
- Reduction of employee contributions (1%) for Tier 1 participants
- Funding guarantees
- The option for 5% of present Tier 1 participants to join a new defined-contribution plan
The law is being challenged in court, but unless a stay is granted by the courts, it will go into effect on June 1, 2014,
SURS continues to analyze the 327-page law to determine its full impact on members, employers and the System in general. We have prepared a synopsis and a Power Point Presentation outlining the bill's components – see below. SURS staff is also preparing a list of answers to Frequently Asked Questions, along with Special Edition Advocate newsletters outlining how pension reform provisions affect our different member groups. The editions will target annuitants/survivors, Tier 1 members, Tier 2 members, and SMP members.
In addition, SURS Outreach Department will be hosting on-campus presentations and webinars, as well as working with SUAA on annuitant seminars. To sign up for the Pension Reform webinars click on the link below. To find out if SURS is making an on-campus presentation at your school, contact your HR Department.
Click on the following for more detailed information: