SR0317 99TH GENERAL ASSEMBLY

SR0317 LRB099 11807 MST 33736 r

SENATE RESOLUTION

WHEREAS, Public Act 96-0889 was passed in 2010 and established, among other provisions, a "Tier 2" pension plan; and

WHEREAS, Public employees who began service on or after January 1, 2011 are now enrolled in what is commonly referred to as the "Tier 2" pension plan; and

WHEREAS, The Tier 2 pension plan dramatically reduced benefits for these members of the Teachers' Retirement System (TRS) and the State Universities Retirement System (SURS); and

WHEREAS, At the time of passage of this plan, it was estimated that this change would result in $64 billion in savings to State taxpayers; and

WHEREAS, Members of the Tier 2 pension plan in TRS and SURS do not participate in Social Security, and many experts believe that the Tier 2 pension plan does not provide benefits that are at least comparable to those provided by the Old-Age portion of the Social Security program; and

WHEREAS, Failure to provide benefits at least comparable to Social Security for Tier 2 members who do not participate in Social Security could result in severe unforeseen consequences for taxpayers in the State of Illinois; and

WHEREAS, Illinois taxpayers need to be advised of all the implications regarding this change, especially the possible impact on property taxes, higher education budgets, and school funding; and

WHEREAS, The Governor has called for the mandatory participation of current Tier 1 members in the Tier 2 plan after an undetermined date; and

WHEREAS, It would be irresponsible to pursue such a drastic change without a federal determination as to whether or not Tier 2 participants in TRS and SURS receive benefits that are in compliance with protections provided under the Internal Revenue Code of 1986; and

WHEREAS, Such a change would harm thousands of working families throughout Illinois and significantly impact our universities' and schools' workforces; and

WHEREAS, It would be irresponsible for the State of Illinois to enact such a drastic proposal without studying the financial impact it would have on taxpayers and working families; therefore, be it

RESOLVED, BY THE SENATE OF THE NINETY-NINTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, THE HOUSE OF REPRESENTATIVES CONCURRING HEREIN, that we urge TRS and SURS to pursue an Internal Revenue Service ruling on the compliance of Tier 2 with safe harbor provisions under Section 3121(b)(7)(F) of the Internal Revenue Code of 1986; and be it further

RESOLVED, That TRS and SURS provide a detailed analysis on the financial impact that the Governor's proposal would have on the members of working families who are currently in the Tier 1 pension plan; and be it further

RESOLVED, That this report be completed prior to any consideration of the Governor's proposal to move Tier 1 participants in TRS and SURS into Tier 2.