Senate Bill 1946, legislation that makes drastic pension cuts for new teachers and public employees, was signed into law April 14 by Gov. Pat Quinn, deeply disappointing the IFT and other unions and organizations that had urged the governor to amendatorily veto the bill.
The new law, Public Act 96-0889, which will go into effect Jan. 1, 2011, increases the retirement age for new hires to 67 with 10 years of service. Final average salary will be calculated using the 8 highest consecutive years out of the last 10. The Cost of Living Adjustment (COLA) will be reduced to 3 percent or half of the Consumer Price Index (CPI), whichever is less. Maximun pensionable salary allowed under the new law is $106,800. The bill also mandates a $400 million pension holiday in Fiscal Year 2011 for the Chicago Teachers Pension Fund. A fact sheet on SB 1946 distributed during the lobby effort by the AFL-CIO is here
IFT President Ed Geppert issued the following statement on the signing into law of SB 1946:
"The IFT is deeply disappointed that Governor Quinn has signed Senate BIll 1946 into law as it was sent to him by the General Assembly.
"This new law will do grave and long-lasting harm to the state of Illinois’ ability to attract and retain highly qualified teachers and public employees. It requires new teachers and public employees to pay almost the entire cost of their retirement., an abrogation of the state’s share of responsibility for public pensions. Even private sector employers pay more than 6 percent of payroll towards employees’ Social Security.
"This law shifts the burden of the state’s past mistakes onto future teachers and public employees.
"Illinois will now have the highest teacher retirement age in the country. New teachers will think twice before teaching in a state that makes them teach kindergarten or physical education.until age 67 to earn a full pension. Surrounding states will have a distinct competitive advantage in hiring and keeping the best and brightest educators.
"The pension holiday for the Chicago Teachers Pension Fund will create approximately $13 billion in unfunded liability for Chicago taxpayers. Clearly, state elected leaders have learned nothing from their past mistakes, when they voted yet again to ignore the state's responsibility to appropriate its fair share of the cost of public pension funds.
"Actions taken by elected leaders on this new law will weigh heavily in determining IFT support for candidates in the Nov. 2 General Election."
###
The IFTand other unions worked hard to defeat this legislation, which was passed by the House and Senate in less than 24 hours. Director of Political Activities Steve Preckwinkle testified against the bill and his testimony can be heard below. But the bill swiftly passed both chambers, and is now Public Act 96-0889.
|