Legislative Report

By Leo Welch

The following are a few of the bills that have been introduced in the 2013 Illinois General Assembly. As one might expect, they are adverse to members of state employees’ pension systems, including members of the State University Retirement Systems which covers current employees as well as retirees.

Current status of these bills may be determined by checking The Illinois General Assembly’s web site and using the bill number, such as HB73 or SB1.

HB73 STATE HEALTHCARE CONTRIBUTIONS (JAKOBSSON N) Amends the State Employees Group Insurance Act of 1971. Provides that, beginning in State fiscal year 2015, contributions required for the basic program of group health benefits shall be calculated using a sliding scale that takes into account the following variables: (i) length of service, (ii) ability to pay, (iii) pension income, (iv) Medicare eligibility, and (v) whether an individual has made an election under a specific provision of the Illinois Pension Code. Prohibits these contributions from being less than the contributions paid for these benefits in State fiscal year 2014. Also makes technical changes. Effective July 1, 2014.

HB96 PEN CD: CLOSE STATE SYSTEMS (THAPEDI A) Amends the State Employees Group Insurance Act of 1971. Shifts the costs of health insurance coverage for future employees of certain higher education institutions from the State to those institutions. Creates a new health benefit program for those employees, once they become annuitants, and for their dependent beneficiaries. Terminates provisions providing for the ongoing transfer of funds from the General Revenue Fund to the Teacher Health Insurance Security Fund and the Community College Health Insurance Security Fund. Amends the Illinois pension code. Requires certain employers to provide a tax-sheltered annuity retirement plan to eligible employees. Requires current benefits in the State-funded retirement systems. Prohibits the State-funded retirement systems from accepting new members or participants. Changes the amount of the required State contributions to the State-funded retirement systems and, in the State Universities and Downstate Teacher Articles, shifts the liability for making those contributions to employers. Amends the State Pension Funds Continuing Appropriation Act. Terminates continuing appropriations from the General Revenue Fund to the Teacher Health Insurance Security Fund and the Community College Health Insurance Security Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

HB1032 UNIV EMPLOYEE EDUC BENEFITS (TRYON M) Amends various Acts relating to the governance of State universities. With respect to any contract or collective bargaining agreement entered into, amended, or renewed on or after the effective date of the amendatory Act, provides that a university is prohibited from entering into a contract or agreement that offers its employees or contractors tuition waivers, grants, scholarships, or any other higher education benefits for the children, spouses, or other family members of the employees or contractors. Provides that nothing in this prohibition prevents or diminishes the right of a child, spouse, or other family member of an employee or contractor to borrow money for higher education expenses or apply for and be awarded a tuition waiver, grant, scholarship, or other award for higher education expenses, provided that there is no conflict of interest and no preference is given on account of the person being the child, spouse, or other family member of an employee or contractor. Provides that nothing in this prohibition shall diminish the value of contractual rights existing before the effective date of the amendatory Act that are enjoyed by employees and contractors of the university or their children, spouses, and other family members. Repeals provisions that permit the children of employees of a State university who have been employed by any one or by more than one State university for an aggregate period of at least 7 years to receive a 50% tuition waiver. Effective immediately.

HB1296 PEN CD: NO INVESTMENTS IN GUNS (MITCHELL C) Amends the General Provisions Article of the Illinois Pension Code. Requires each pension fund and retirement system established under the Code to make its best efforts to identify all firearm manufacturing companies in which it has direct or indirect holdings and, under certain circumstances, to divest itself of holdings in those companies. Effective immediately.

HC11 CONAMEND: REPEAL PENSION RIGHTS (SOSNOWSKI J) Proposes to amend the General Provisions Article of the Illinois Constitution. Repeals a provision that specifies that membership in any pension or retirement system of the State, and unit of local government or school district, or any agency or instrumentality thereof shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. Effective upon being declared adopted.

SB1 PEN-CD: REFORM STATE SYSTEMS (CULLERTON J) Amends the General Provisions, General Assembly, Illinois Municipal Retirement Fund (IMRF), State Employee, State Universities, Downstate Teacher, and Judges Articles of the Illinois Pension Code. Contains a Part A, which is intended by the General Assembly as a stand-alone reform of the General Assembly, State Employee, Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code and takes effect upon becoming law. Contains a Part B, which is intended to provide alternative provisions that take effect only if an when a corresponding portion of Part A is determined to be unconstitutional or otherwise invalid or unenforceable. In Part A, caps pensionable salary, temporarily suspends and reduces the amount of automatic annual increases, requires the systems to be 100% funded by 2043, and increases required employee contributions. In Part B, requires persons to make an election either to accept reductions in the amount of, as well as delays in eligibility for, automatic annual increases or to forgo certain healthcare benefits and future increases in pensionable income. Effective upon becoming law, except that specified portions of Part B take effect upon the date following the date upon which certain contingencies occur.

SB1224 PEN CD: SALARY-NO SICK/VACATION (MURPHY M) Amends the Illinois Municipal Retirement Fund (IMRF), Cook County, State Employees, State Universities, Downstate Teachers, and Chicago Teachers Articles of the Illinois Pension Code. For participants who first become participants on or after the effective date of the amendatory Act, prohibits (i) payments for unused sick or vacation time from being used to calculate pensionable earnings and salary and (ii) unused sick or vacation time from being used to establish service credit. Effective immediately.

The bill most likely to move in the General Assembly is Senate Bill 1. Senate President John Cullerton is the chief sponsor and apparently has the support of Speaker of the House, Michael Madigan.

Madigan has refused to meet with the “We Are One” coalition of unions. The coalition requested a meeting to discuss compromises regarding SB1 and other pension bills. One lobbyist stated that Madigan has “declared war on the unions.”

If this is the case, Illinois joins Wisconsin, Ohio, Indiana, and Michigan in attacking public employee unions. This battle, to say the least, will be interesting to follow.