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1
SENATE RESOLUTION

 
2    WHEREAS, Public Act 96-0889 was passed in 2010 and
3established, among other provisions, a "Tier 2" pension plan;
4and
 
5    WHEREAS, Public employees who began service on or after
6January 1, 2011 are now enrolled in what is commonly referred
7to as the "Tier 2" pension plan; and
 
8    WHEREAS, The Tier 2 pension plan dramatically reduced
9benefits for these members of the Teachers' Retirement System
10(TRS) and the State Universities Retirement System (SURS); and
 
11    WHEREAS, At the time of passage of this plan, it was
12estimated that this change would result in $64 billion in
13savings to State taxpayers; and
 
14    WHEREAS, Members of the Tier 2 pension plan in TRS and SURS
15do not participate in Social Security, and many experts believe
16that the Tier 2 pension plan does not provide benefits that are
17at least comparable to those provided by the Old-Age portion of
18the Social Security program; and
 
19    WHEREAS, Failure to provide benefits at least comparable to
20Social Security for Tier 2 members who do not participate in

 

 

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1Social Security could result in severe unforeseen consequences
2for taxpayers in the State of Illinois; and
 
3    WHEREAS, Illinois taxpayers need to be advised of all the
4implications regarding this change, especially the possible
5impact on property taxes, higher education budgets, and school
6funding; and
 
7    WHEREAS, The Governor has called for the mandatory
8participation of current Tier 1 members in the Tier 2 plan
9after an undetermined date; and
 
10    WHEREAS, It would be irresponsible to pursue such a drastic
11change without a federal determination as to whether or not
12Tier 2 participants in TRS and SURS receive benefits that are
13in compliance with protections provided under the Internal
14Revenue Code of 1986; and
 
15    WHEREAS, Such a change would harm thousands of working
16families throughout Illinois and significantly impact our
17universities' and schools' workforces; and
 
18    WHEREAS, It would be irresponsible for the State of
19Illinois to enact such a drastic proposal without studying the
20financial impact it would have on taxpayers and working
21families; therefore, be it
 

 

 

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1    RESOLVED, BY THE SENATE OF THE NINETY-NINTH GENERAL
2ASSEMBLY OF THE STATE OF ILLINOIS, THE HOUSE OF REPRESENTATIVES
3CONCURRING HEREIN, that we urge TRS and SURS to pursue an
4Internal Revenue Service ruling on the compliance of Tier 2
5with safe harbor provisions under Section 3121(b)(7)(F) of the
6Internal Revenue Code of 1986; and be it further
 
7    RESOLVED, That TRS and SURS provide a detailed analysis on
8the financial impact that the Governor's proposal would have on
9the members of working families who are currently in the Tier 1
10pension plan; and be it further
 
11    RESOLVED, That this report be completed prior to any
12consideration of the Governor's proposal to move Tier 1
13participants in TRS and SURS into Tier 2.