CHICAGO – A bipartisan panel tasked with solving Illinois' multibillion-dollar pension crisis is considering a framework that would save the state about $145 billion over 30 years, largely by ending automatic 3 percent cost-of-living increases for retirees.
The Associated Press on Friday obtained an outline of ideas being considered by the 10-person committee, whose members have said they are making progress on an issue that has vexed lawmakers for years.
Sen. Kwame Raoul, a Chicago Democrat and the committee's chairman, acknowledged the outline but said the document is preliminary and the panel is not ready to issue a final recommendation.
"The committee has not come to a consensus," Raoul said. "Our work is not done."
But the outline is the most detailed information disclosed to date of what the committee is considering or how much savings any proposal on the table could achieve.
It calls for setting retirees' annual cost-of-living increases at half the rate of inflation, though it would set both floors and caps — which were not included in the outline — for what the rate would be. That formula would likely equate to smaller adjustments than the current 3 percent increases, compounded annually.
Employees would contribute 1 percent less to their own retirement, according to the document. But their annual pension benefit would be based on their salary over their career, rather than on the higher amount they're making right before they retire.
It would reduce the state's nearly $100 billion unfunded pension liability by about $18.1 billion and fully fund the retirement systems within 30 years.
Lawmakers voted in June to create the conference committee after reaching an impasse over two rival pension plans – one advanced by House Speaker Michael Madigan and the other by Senate President John Cullerton, both Chicago Democrats.
Madigan's plan would have saved Illinois about $187 billion over 30 years, while the savings in Cullerton's plan were estimated at $47 billion over the same timeframe.