This has to happen at a minimum

Dear Ken,

Thank you for getting in touch to advise me of your position on Senate Bill 512, which amends the Illinois Pension Code. 

I appreciate your taking the time to be a part of the democratic process, and I am grateful for the chance to respond to you about this matter.  I want you to know that I am a co-sponsor of this bill and will vote accordingly should this proposal come before the full House for consideration in the future.   

Senate Bill 512 is a proposal that I support, which would impact the current employees enrolled in any of the five state pension systems.  Under this legislation, current employees would decide between three retirement plan options: 

1. Unreformed Defined Benefits Plan: Allow current Tier 1 employees to continue under their current defined benefit plan, but with higher employee contributions to match the true cost of the benefit. 

2. Reformed Defined Benefits Plan: Allow current Tier 1 employees and new Tier 2 employees to participate in the reformed Defined Benefit plan.  Current employees who opt in the reformed DB plan will be credited for all benefits earned prior, with level of pay and service frozen at June 30, 2012.  The benefit levels under this plan would be the same as SB 1946, the pension reform bill that passed in the 96th General Assembly.

3. New Defined Contribution Plan: Allow current Tier 1 and new Tier 2 employees to opt into a self-managed plan.  Current employees who opt in the Defined Contribution plan will be credited for all benefits earned prior, with level of pay and service frozen at June 30, 2012.  The employer and employee contribution for this plan would be what they would be required to pay in reformed defined benefit plan.  The employee can contribute above the state matching rate but the state contribution will not exceed what it is required to pay under the reformed defined benefit plan.  It takes 5 years to vest in the DC plan, if the member does not attain 5 years of service they are entitled to a refund of employee contributions and any interest earned on those contributions.

Each of these options would only impact benefits earned after June 30, 2012.  All prior benefits earned up to that date would remain unchanged, and current employees who are presently retired will see no change to their benefits with this bill.

I do believe that this particular proposal, while not perfect, creates a system that can be financially sound for years to come and is also fair to current employees.  I am open to further discussion to make any reform plan the best possible plan.  Again, thank you for sharing your perspective with me.  It is a privilege to serve you and represent our area in Illinois’ State House.

Please contact me at any time with regard to this or any future legislative concern you may have.  Should you need any further information, please contact my district office at 815-547-3436.

Sincerely,

Joe Sosnowski
State Representative
69th District