Union proposal summary
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This document outlines choices for current Tier I active employees and current retirees under SB 2404 regarding their COLA and retiree healthcare access. For Tier I actives, Choice A offers a 3% simple COLA with a 2 year delay in exchange for retiree healthcare access and making future salary increases pensionable, while Choice B maintains the current 3% compounded COLA but offers no retiree healthcare access. For current retirees, Choice A provides retiree healthcare access but subjects the 3% compounded COLA to a staggered two-year freeze, while Choice B maintains the current COLA but offers no retiree healthcare access. The proposal also prohibits bargaining over the benefit changes, adds a pension stabilization fund schedule
Union proposal summary
- 1. SB 2404 (Cullerton-Holmes) Choice: Affecting Tier I Actives Choice A: Lower COLA Choice B: Keep Your COLA Agree to 3% simple COLA with a 2 yr. delay Receive retiree healthcare access All future salary increases offered as pensionable Enrollment in optional cash balance plan on a pre-tax basis by making an irrevocable election to join plan after choosing Choice A Eligibility for ERO (TRS only) Option 1: No change to 3% compounded COLA No retiree healthcare access Future salary increases offered as non-pensionable Option 2: No change to 3% compounded COLA Receive retiree healthcare access as consideration All future salary increases offered as pensionable In exchange for: A 3 year delay in 3% compounded COLA Paying an additional 2% in employee contributions over two years Choice: Affecting Current Retirees (and Tier I Actives Already Set to Retire as of 1/1/2013) Choice A Choice B No change to 3% compounded COLA, except that COLA is subject to a staggered two-year freeze Receive retiree healthcare access No change to 3% compounded COLA No retiree health care access Other Terms of the Proposal Collective Bargaining: Prohibits mandatory bargaining over the benefit changes and employee contribution increases in the bill. Pension Stabilization Fund: Adds the Pension Stabilization Fund schedule embodied in SB 2404, but starting in FY 2020. Funding Guarantee: Includes funding guarantee language requiring State contributions to the pension systems under the schedule in current law. Addresses Pension Abuses: (a) Prohibit persons hired by non-governmental entities (e.g., Municipal League) after the bill’s effective date from participating in public pension systems; (b) Exclude travel vouchers filed late from qualifying as “compensation” for SERS employees hired after the bill’s effective date; and (c) Separates normal cost from the unfunded liability in budget presentation.