An Important Update on Tier 2 Pension Legislation

I’m writing today to give you an important update on the legislative progress to fix Tier 2 pensions.

As you know, the We Are One Illinois coalition has been fighting for years to fix the broken Tier 2 system. Back in November, we unveiled the Fair Retirement and Recruitment Act, state legislation that would make significant strides toward fixing the main shortcomings of Tier 2 pensions. Since that time, we have been in extensive discussions with legislators and Gov. JB Pritzker’s office about a path forward for our legislation.

One of the main issues raised is the importance of ensuring that any legislative fix strengthens the financial standing of both our pension systems and the state as a whole. We have worked to find fiscally responsible solutions that will not add to the state’s unfunded pension liability, will not hurt the state’s credit ratings, and will not add significant costs to the state budget for upcoming years. We also acknowledge Gov. Pritzker’s stated desire to address the shortcomings in the state’s pension funding ramp.

After many months of discussions with key legislators, we believe we are close to a path forward that makes real progress to ensure public employees on Tier 2 can receive a more fair and decent pension while also strengthening the state’s finances for the long term. We expect to introduce this amended proposal shortly and will work diligently to pass it through the state legislature before the scheduled end of session on May 31.

This amended proposal addresses the four core areas where Tier 2 benefits have fallen short for public employees, including:

• Improving the final average salary calculation

• Lowering the retirement age

• Improving the cost of living adjustment

• Increasing the Social Security Wage base to address the so-called “Safe Harbor” problem

This newest proposal also reforms and modernizes the way we pay down the unfunded pension liability.

In short, this proposal can put us on a path to improve the inadequate and insufficient Tier 2 pensions for public employees while also addressing our state’s decades-long pension funding problems. While this legislation does not achieve our pension equity goal in its entirety, it represents a vitally important step in the right direction that will make a real difference in the retirement security of hundreds of thousands of public employees all across our state.

Please know that this proposal is not a done deal — we need you to contact your state legislators right away and tell them to pass the We Are One bill that would make significant improvements to Tier 2 pensions.

Thank you for your support and activism throughout this fight.

In solidarity,

Pat Devaney

We Are One Illinois