Gov. Rauner's New Pension Plan

Jul 8, 2015

In the midst of a budget stalemate, Illinois Gov. Bruce Rauner says he's re-introducing his five-point agenda, with some changes. The Republican is also putting out a new pension plan.

Put aside, just for a minute, Illinois' immediate fiscal problem of having no spending plan in place, and the chaos that could bring; the state still has the nation's biggest unfunded pension liability. The state Supreme Court tossed lawmakers' last plan for dealing with it.

Gov. Rauner says he'll soon introduce a new, 500 page proposal.

"What we've tried to do, is incorporate the ideas of all the various leaders to create an opportunity for significant cost savings in the pension systems throughout the state of Illinois."

Details are forthcoming. But broadly, Rauner's plan gives state employees and public school teachers a choice: take a smaller retirement benefit immediately, or take a smaller benefit down the line by choosing to forgo having future salary hikes count toward your pension.

That concept builds off a so-called "consideration" model advocated by Democratic Sen. President John Cullerton, whom Rauner has publicly gone out of his way to compliment for making an effort to cooperate with him. Rauner continues, including at the Wed., July 8 press conference during which he unveiled the new pension concept, to assail Democratic House Speaker Michael Madigan as standing in the way of compromise. Madigan has said he has, and will continue to, work professionally with the governor.

The governor's plan does more though. Workers would get incentives for opting into the new, lesser benefit package. They'd be paid a bonus for switching, and could choose perks like a one-time salary bump or extra vacation time.

It also makes changes to the baseline used to determine pension benefits, like having overtime pay kick in after 40 hours instead of 37.5 hours.

The package would also give municipalities struggling to keep up with police and firefighter pensions more time to make their payments, including special plans for Chicago and Cook County in partial accordance with demands of Mayor Rahm Emanuel and County Board President Toni Preckwinkle.

Already though, unions -- which helped bring the last case before the Illinois Supreme Court -- is criticizing the new variation Rauner has put forth. Unions' We Are One coalition says that Rauner's "framework is unconstitutional, unfair to workers and retirees, and a waste of taxpayer dollars and time," and says the governor should begin working with legislative leaders in earnest.