The governor has summoned the Illinois General Assembly to Springfield Wednesday to address the state’s more than $100 billion pension crisis. To set the tone for the discussion, today a group of reform-minded lawmakers joined the Illinois Policy Institute at a press conference to present a pension reform plan that is constitutional, would immediately cut Illinois’ $100 billion unfunded pension liability by nearly half, and would protect the benefits earned to date by current government workers.
Here are some highlights of the pension reform bill sponsored by state Reps. Tom Morrison and Jeanne Ives, and state Sen. Jim Oberweis, House Bill 3303 and Senate Bill 2026:

• Saves Illinois more than $221 billion over the next 30 years

• Is constitutional because it banks and protects the benefits that government workers have earned to date

• Ends the repayment ramp, and establishes a flat-rate payment schedule to retire Illinois’ pension debt and pay off benefits earned to date by current workers and retirees

• Going forward, current and future government workers would earn retirement benefits in a self-managed, 401(k)-style system. They would receive a generous 7 percent employer match every single paycheck after they contribute 8 percent (most workers currently contribute 9 percent).

• Does not affect current retirees but protects and pays what they have earned

“I have spent a lot of time speaking with teachers in my district, and based on these conversations I believe we owe them the opportunity to control their own retirement savings. They deserve a personal account where they get to invest their money as they see fit,” said Rep. Tom Morrison, R-Palatine. “Hard-working teachers have been yanked around by elected officials for too long; it’s time to get politicians out of the retirement business by passing House Bill 3303.”

This plan was developed by the Illinois Policy Institute, a nonpartisan research and education organization. At its core, this plan calls for expanding a retirement plan that already exists today in Illinois for university and community college workers, and has more than 17,000 voluntary participants.

The core components of this plan have been scored by the Commission on Government Forecasting and Accountability, and have been found to achieve savings greater than any other pension proposal to date. It also follows the lead of other states that have implemented pension reform.

Starting in June 2006, Alaska shifted all new employees to defined contribution plans similar the one proposed for Illinois. Michigan shifted all new state employees to 401(k)-style plans beginning in March 1997. And in 2011, Rhode Island passed a hybrid plan that allows workers to participate in a blended defined benefit and defined contribution plan. Nearly 85 percent of private sector workers are now enrolled in defined contribution plans.

“To prevent Illinois from going down the path that has led many companies to file for bankruptcy, Illinois must end its dependence on the defined benefit pension system and follow the lead of the private sector, by converting its retirement system to 401(k)-style plans,” said state Sen. Jim Oberweis, R-Sugar Grove. “This is the only way Illinois will be able to end its pension crisis and begin to make way for the economic growth our state needs.”

At the press conference, state Rep. Jeanne Ives, a co-sponsor of HB3303, called on her colleagues to start their pension reform talks Wednesday with her bill as the base.

“As legislators, if we don’t take the right votes then we are doing nothing to improve the business climate in Illinois,” said state Rep. Jeanne Ives, R-Wheaton. “House Bill 3303 is the right plan for fixing Illinois’ pension crisis and setting us up for a brighter, more prosperous future.”

In May, the spring legislative session ended without real pension reform being enacted. Illinois Policy Institute CEO John Tillman said Illinois should stop forcing government workers and teachers to participate in a pension plan so badly managed by politicians.

“The supposed gridlock between Illinois’ top political players and the General Assembly’s inability to enact real pension reform proves why politicians must get out of the retirement business,” said Illinois Policy Institute CEO John Tillman. “Politicians have created a system that has spiraled so out of control that not even the architects of the system can fix it. It’s time to put the power over workers’ retirements back where it belongs: in the hands of the workers.”

State Rep. Ron Sandack, R-Downers Grove, and state Sen. Michael Connelly, R-Naperville, also attended the press conference to show their support for real pension reform.