Teamsters Oppose Bill That Includes Retirement Age Increase
CHICAGO, Dec. 1, 2010 /PRNewswire-USNewswire/ -- A new bill passed by the Illinois House of Representatives would bring sweeping changes to police and fire pension systems in Chicago and its surrounding municipalities, including raising the retirement age and altering how individual pensions are calculated.
"We cannot and do not support such changes," said John T. Coli, Trustee of Teamsters Local 700, which represents thousands of police officers and firefighters in the greater Chicago area. "Our members put their lives on the line every day in order to serve our communities. The hardworking men and women who take on these high-stress, high-risk jobs deserve better from their legislative leaders."
SB 3538, which passed the state House 95-18 on Nov. 30, would raise the retirement age from 50 to 55 for all Chicago and municipal police and fire employees hired after Jan. 1, 2011. Sheriff's employees who participate in the Illinois Municipal Retirement Fund also would be affected, but the bill would not affect Cook County Sheriff's employees.
In order to become law, the bill now must receive 36 votes in the state Senate.
For individuals hired after Jan. 1, 2011, the new pension system:
- Raises the retirement age to 55 with 30 years of service, or 50 with a 6 percent penalty on employee annuity for the next five years (with a maximum 30 percent annuity reduction over that period);
- Sets an employee's final average salary by using the eight highest consecutive years out of the last 10 (currently, systems average the four highest consecutive years of last 10);
- Reduces the Cost of Living Adjustment (COLA) to 3 percent or one-half of the Consumer Price Index (CPI), whichever is less;
- Pushes back the amortization rate for municipalities from 2033 to 2041, which would allow municipalities to reduce their annual contributions.
"Giving municipalities another eight years to reach 90 percent funding in their pension systems is not a viable solution. It is merely delaying the problem – kicking the can down the road – instead of facing it head-on," Coli said.
The bill also includes language that, starting in 2015, would require municipalities to make their full annual pension fund contributions, as determined by an independent actuarial assessment. Currently, municipalities are not required to meet the determined amount, but with this change, pension funds would be allowed to use municipal discretionary funds to make up the difference.
"This type of mandate would guarantee a direct stream of revenue to fully fund the pensions and prevent municipalities from shirking their responsibilities," said Becky Strzechowski, Local 700 Assistant Trustee. "A change like this would go a long way toward making sure the pension funds are more solvent.
"While we support this particular concept, we do not support this bill, nor will we support any bill that increases the retirement age and reduces the benefits for new hires. We consider that unacceptable under any circumstances."
SOURCE Teamsters Local 700