Fiscal Year 2013 Teachers' Retirement Insurance Program

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Governor Quinn's Public Pension Stabilization Plan

Governor Pat Quinn on April 20 outlined a “public pension stabilization plan” that he estimates will save the state between $65 billion and $85 billion by 2045 and will erase the systems’ unfunded liability by 2042.

There is no timetable or deadline for action on this plan, or a date when the changes will take effect if enacted, so TRS cannot advise members what they should do about retirement decisions to be made in the foreseeable future. If enacted, these changes would likely face a court challenge lasting several years.

Changes in benefits and contributions in this plan only affect active and inactive members. The plan does not change one thing for members who already are retired. TRS has not yet modeled aspects of the governor’s plan so we do not yet know how much this plan will cost active TRS members. TRS has not seen specific legislative language.

Here are changes that will affect active TRS members:

• A 3 percentage point increase in the member contribution, from 9.4 percent to 12.4 percent
• The retirement age will be gradually increased over several years to age 67.
• Upon retirement, the cost of living adjustment will be changed from 3 percent compounded to a COLA that is capped at 3 percent or one-half of the consumer price index, whichever is less. The new COLA is not compounded.
• Upon retirement, a member’s COLA will not begin until 5 years of retirement, or age 67, whichever comes first.

While the governor’s plan alludes to reducing the state “subsidy” for health insurance premiums that retired state employees receive, this part of the plan is likely not aimed at TRS members. Retired TRS members pay an average health insurance premium of $577 in retirement. State employees that have worked 20 years currently pay no health insurance premium in retirement. The reality is the state wants them to be like TRS members and pay a premium.

Other parts of the pension stabilization plan are:

• A strong guarantee written into state law that requires the state to pay its full annual contribution to TRS and the other pension systems.
• Over the next several years, school districts will have to begin paying the total annual cost of TRS pensions.
• Only public employees will be allowed to be members of the state’s public pension systems – no private organization employees are allowed. More information on the governor’s proposal is available by clicking here.

What's Happening at TRS

TRS Executive Director Dick Ingram will hold a series of “Town Hall” meetings throughout Illinois during April and May. Click here to view the presentation as a PDF (this version was updated on May 1).

Upcoming Town Hall Meetings: Meeting Information (PDF).)

• May 15 – Springfield (IRTA Regional Meeting)
• May 22 - Springfield

TRS Issues Update

Teachers’ Retirement System is committed to providing the latest up-to-date information available about the progress of legislation in the General Assembly that could alter the Illinois Pension Code and affect TRS members. The following resources are designed to help you track active bills in the legislature and to help you understand what those bills mean to you and your family.

• Major Legislation & Proposals - A TRS breakdown of the major proposals introduced in the General Assembly
• TRS Speaks– A statewide compilation of TRS responses to news articles and letters-to-the-editor
• All Pension Legislation– Brief descriptions of all pension legislation pending in the General Assembly and a link to the General Assembly’s official bill search and status Web site
• TRS Issues & Answers– Questions and answers about issues facing TRS members
  

To expedite your search for specifc information, please use our search engine on the top right hand corner of our Web site.

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