Was Pension Fix Snuck In the Budget?
AFSCME members protest in Will County in 2013.
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While legislation aimed at amending the state’s pension law to “fix” tier 2 pensions to quell any issues with federal “safe harbor” laws didn’t advance, a provision did make it into the Budget Implementation, or BIMP, bill in the final hours of the legislative session.
Tucked into the BIMP was a provision creating a new “Social Security Wage Base” reserve fund.
The Tier 2 SSWB Reserve Fund is created as a special fund in the State treasury. The Fund may receive revenue from any authorized source, including, but not limited to, transfers and appropriations from other funds in the State treasury. Any interest earned on moneys in the Fund shall be retained in the Fund.
Is this the fix groups involved were working for?
Short answer? No.
Sources say the provision is not intended as a “fix” to the Tier 2 issue, but is a fallback in case the state runs into a court decision or IRS trouble relating to any safe harbor issues.
The “We are One” coalition of unions working for the change issued a statement at the close of the legislative session criticized lawmakers for punting the issue.
“This issue isn’t going away,” the statement said. “Public employees are leaving their professions and our state because they can’t rely on a pension that ensures dignity in retirement. Public employee shortages have been reported all across Illinois, impacting critical services for our residents. Delaying a fix only makes the problem more costly and damaging.”
The budget includes $78 million for the safe harbor fix, but it isn’t clear if there will need to be more money set aside.
The Governor’s office and House Speaker’s office did not respond to requests for comment.
A spokesman for Senate President Don Harmon says the pension issue “remains under review.”
