Illinois Legislative News: October 21, 2024
Third Reading Consulting Group
On October 15, the Better Government Association (BGA) held a discussion around Fixing Illinois’ Pension System. In conjunction with the discussion, BGA, the Civic Committee, and the Civic Federation published a list of principles for addressing Illinois pension problems. The event featured a panel of experts on Illinois pension systems: Deputy Governor for Budget and Economy Andy Manar, Sen. Robert Martwick, Chair of the House Personnel and Pensions Committee Rep. Stephanie Kifowit, Republican Spokesperson of the House Personnel and Pensions Committee Rep. Steve Reick, and BGA President and CEO David Greising.
The state has done a good job getting its finances in order, and contributing above the minimum statutory requirement to pensions in recent years, when they have funds available. However, the five state pension funds have $141B in unfunded liabilities, and local pension funds have an additional $70B in unfunded liabilities. Beyond addressing current unfunded liabilities, Illinois will have to increase Tier 2 pension benefits to meet federal Social Security safe harbor, which will further increase unfunded liabilities by an unknown amount.
The panelists discussed pension funding proposals from Gov. J.B. Pritzker, the Civic Committee, and the Center for Tax and Budget Accountability, but could not agree on which solution would be best for the state. One issue the panelists largely agreed on is that reform to address the federal Social Security safe harbor issue for Tier 2 pension recipients must occur soon. Rep. Reick, the lone Republican on the panel, pushed for the Tier 2 safe harbor issue to be addressed as a stand-alone bill as soon as veto or lame duck session. However, Democrat panelists advocated for including the Tier 2 safe harbor fix as a part of a larger pension funding package that they hope will pass in 2025. They believe that the General Assembly’s appetite to pass broader pension reform will wane if they have already addressed the Tier 2 issue.
Important Upcoming Dates – Statewide
November 5 – 2024 General Election
November 12-14 – Veto Session Week 1
November 19-21 – Veto Session Week 2
January 2025 – Lame Duck Session (Unconfirmed)