News
Pension Reform Legislation
Applies to Future Participants
On April 14, 2010, the Illinois governor signed Senate Bill 1946 into law. The new legislation creates a “Second Tier” of pension benefits applicable to public employees hired on or after January 1, 2011. The law does not change benefits for current and retired employees.
The following chart compares the First Tier of pension benefits with the newly created Second Tier.
| First Tier | Second Tier | |
|---|---|---|
| Eligibility |
Current & retired employees who are hired prior to 12/31/2010 |
Employees hired for the first time on or after 1/1/2011 |
| Pension Benefits |
Eligible for a benefit at age 50 with at least 30 years of service, at age 55 with at least 20 years of service, and at age 60 with at least 10 years of service |
Eligible for a benefit at age 67 with at least 10 years of service and a reduced benefit at age 62 with at least 10 years of service |
| Final Average Salary |
Average of highest 4 consecutive years within the last 10 years of service |
Average of highest 8 consecutive years within the last 10 years of service |
| Average Salary Limit | None |
$106,800 in 2011; amount increased annually by 3% or by 1/2% of the increase in the Consumer Price Index-Urban (CPI-U), whichever is lower |
| Cost of Living Adjustment (COLA) | 3% of the current monthly annuity |
Either 3% or 1/2% of the rate of the CPI-U, whichever is lower, and applied to the original annuity amount |
| COLA Eligibility |
If you retire on or after age 60, the first COLA occurs the Jan. following the first annuity payment, or between ages 50 & 60, the first COLA occurs in the Jan. of the 3rd year after retirement or in Jan. of the year you turn 60 |
Upon age 67 or first anniversary of the commencement of the annuity, whichever occurs later |
| Spousal Annuity | 50% of the pension the member had earned at the date of death |
66 2/3% of the pension the member had earned at the date of death |
| Spousal Annuity COLA | No COLA |
Either 3% or 1/2% of the rate of the CPI-U, whichever is lower, and applied to the original spousal annuity amount |
The Fund continues to follow any future amendments that may affect the implementation of the Second Tier. The complete text of the law, Public Act 096-0889, is available at www.ilga.gov.