Bill Status of HB6258 97th General Assembly
Short Description: PEN CD-PENSION REFORM
Rep. Elaine Nekritz - Daniel Biss - David Harris - Chris Nybo, Kelly Burke, Kelly M. Cassidy, William Cunningham, Robyn Gabel, Ann Williams, Linda Chapa LaVia, William Davis, Sara Feigenholtz, Greg Harris, Elizabeth Hernandez, Charles W. Krezwick, Karen May, Deborah Mell, Cynthia Soto, Michael J. Zalewski, Cory Foster and Eddie Winters
| 1/8/2013||House||Session Sine Die|
Statutes Amended In Order of Appearance
Synopsis As Introduced
Amends the General Provisions, General Assembly, State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code. In the General Provisions Article, creates a cash balance plan for new hires of the State Universities and Teachers' Retirement Systems and for certain Tier II participants. Increases the retirement age for certain Tier I members and participants. Changes the conditions of eligibility for, and the amount of, automatic annual increases for Tier I retirees. Increases required employee contributions for Tier I members and participants. Limits pensionable salary for Tier I participants. Changes the required State contribution to each of the affected retirement systems so that those systems are 100% funded by 2043. Guarantees certain funding levels. In the State Universities and Downstate Teacher Articles, shifts costs to local employers. Makes other changes. Amends the State Finance Act. To the list of standardized items of appropriation, adds "State retirement contribution for annual normal cost" and "State retirement contribution for unfunded accrued liability". Defines those terms. Amends the Governor's Office of Management and Budget Act. Adds those terms to a list of classifications to be used in statements and estimates of expenditures submitted to the Office in connection with the preparation of a State budget. Amends the State Mandates Act to require implementation without reimbursement. Includes an inseverability provision. Makes other changes. Effective immediately.
| ||Balanced Budget Note (Office of Management and Budget)|
| ||HB 6258 could provide significant savings to the fiscal year 2014 budget, approximately $1.6 billion from reduced retirement contributions. However, because the bill contains an inseverability clause, a successful legal challenge to any single provision of the bill would invalidate the bill in its entirety.|
| ||Fiscal Note (Government Forecasting & Accountability)|
| ||HB 6258 will not have a discernible fiscal impact upon the operations of the Commission on Government Forecasting and Accountability. |
| ||Pension Note (Government Forecasting & Accountability)|
| ||A recent cost study by SERS’ actuary projects the State to save $326 million in contributions in FY 2014 and over $27 billion in contributions through FY 2045 by adopting the benefit changes in HB 6258. SURS’ actuary projects the State will save $333 million in contributions for FY 2014 and approximately $18.8 billion in contributions through FY 2045 by adopting the benefit changes in HB 6258.
TRS’ actuary projects that the State will be able to reduce contributions in FY 2014 by $1.22 billion by adopting this bill. Additionally, the State is projected to save $114.17 billion in contributions through FY 2043. TRS’s actuary did not provide data for FY 2044 and 2045
| ||State Debt Impact Note (Government Forecasting & Accountability)|
| ||HB 6258 would not change the amount of authorization for any type of State-issued or State-supported bond, and, therefore, would not affect the level of State indebtedness. However, after each series of Pension Obligation Bonds and Notes are paid off, the General Revenue Funds being used to pay those debts off would be relegated to the Pension Stabilization Fund until State FY 2045 or until each of the designated retirement systems reaches 100% funding ratio. |