This is written fast and furious because the hearings are tomorrow. Excerpts from the gobbledygook amendments made to SB 512 below:
Great indeterminacy. The only definite thing is a) the state won't pay more than 6%. Your retirement will be at least equal to Social Security benefits (what a joke).
To keep (for now) our "constitutionally guaranteed" defined benefit packages, we must all pay more, 15.31% of compensation (presumably salary and not all "compensation" including benefits?). Thereafter it is based on some actuarial formula that is in the hands of the state with history of rigging numbers. So your future contribution amount may be higher or lower (assume higher).
Sum up: it reads like it was written by mafia lawyers: sign or we kneecap you.
Sec. 8-103.3. Traditional benefit package. "Traditional
benefit package": The defined benefit retirement program
maintained under the Fund for employees who first became
participants in the Fund before January 1, 2011.
. . .
(1) Participants who elect the traditional or portable
defined benefit package shall contribute:
(A) In fiscal year 2013, fiscal year 2014, and
fiscal year 2015, an amount equal to 15.31% of salary [teachers only increase 3.35% but SURS employees must pay 7.3% more than we are now].
(B) In fiscal year 2016 and in each fiscal year
thereafter, a percentage of salary equal to the
actuarially determined normal cost of the traditional
defined benefit package ["We'll tell you later and you accept the numbers we give you, sucker!"], minus employer contributions [6%]
The following clause is a puzzler: they want us in Self-Managed Plans but no more than 20% of us?
Sec. 10-110. Maximum self-managed plan participation. By
July 1, 2012, the Fund shall certify the total active
participant population. When the number of participants that
elect the self-managed plan is equal to 20% of the total active
participant population, then no participant may elect the
RETIREMENT SALARY CAP:
(e) Notwithstanding any other provision of this Article,
the required contribution of a participant who first becomes a
participant on or after January 1, 2011 shall not exceed the
contribution that would be due under this Article if that
participant's highest salary for annuity purposes were
$106,800, plus any increases in that amount under Section
But they will adjust it for cost of living increases which are half the rate of inflation or 3% whichever is lower (if inflation is 4%, then you get 2%!). Not clear whether the half-inflation adjustments are annual DURING employment (i.e., cumulative increases) or only when you retire. If you start work now and retire at 67 (another requirement), then $106,000 will be worth a fraction of $106,000 today. Makes for good envy-based politics though and people (voters) don't think ahead.
Good news (cough, cough): The state promises -- PROMISES! -- that your retirement package will at least equal what you would get under Social Security. OMG! My wife worked for social security and the motto was "retirement is a three-legged stool; Social Security is only one leg, a good pension is another, then there is savings." Unless you work for the State of Illinois.