State Senator Donne Trotter leads way to reform Illinois pension systems

SPRINGFIELD - Illinois State Senator Donne Trotter (D-Chicago) advanced a measure through the Senate last night that will save hundreds of billions of dollars over the next three decades and reform the state’s severely underfunded pension obligations.

Senate Bill 1946 only applies to future workers hired after the bill goes into effect on January 1, 2011 and reforms pension benefits for Illinois’ public pension systems. The measure increases the retirement age of future workers to 67 years old with 10 years of service in order to qualify for full benefits. Workers who have at least 10 years of service may retire at age 62, but will receive reduced benefits.

"One of the most important aspects of this measure is it does not affect the hard working people of our state who have paid their share into the retirement system for decades," Senator Trotter said. "They have earned those pensions. It is important they get the retirement income that has been promised to them."

Illinois has the worst unfunded pension liability in the nation – over $62.4 billion in unfunded accrued liability. This historic debt has caused instability for the pension systems and a reduction in the state’s economic progress. The unfunded liability has also caused Illinois’ bond rating to be downgraded within the past year, costing the state millions of dollars in extra interest costs when bonds are issued.

"In this historical fiscal crisis, we must act responsibly," Senator Trotter said. "This is the most comprehensive pension reform bill in Illinois history and will save hundreds of billions of dollars in the next three decades. These savings will help protect and stabilize our pension systems and relieve budget pressures in the future."