In an email to constituents, State Rep. Mike Tryon comments on pensions:

Friends,

Last year Illinois legislators approved a two tiered pension system whereby new hires after January 1, 2011 would be eligible for pensions under a revised set of guidelines.

The new tier did not affect existing beneficiaries of the pension system.

The estimated savings from creating the second tier is $300 million to $500 million per year.

While those reforms go far in controlling the future pension obligation, the current unfunded pension liability remains at approximately $80 billion.

The pension system, as it stands today, is unsustainable.

This week I signed on as a co-sponsor of House Bill 149, which would address pensions for employees hired prior to January 1 of this year.

This bill would allow current state employees, university employees, teachers, judges and lawmakers to choose from three different plans:

1. They could keep their current benefits, but would have to make higher contributions in order to cover the benefits’ true costs.
2. They could choose to participate in the second-tier pension plan created for future state employees by the General Assembly last year.
3. They could participate in a defined contribution plan in which employees and the state would both contribute at least 6 percent of the employees’ salaries.

This bill takes into account the Constitutional protections tied to pension benefits and gives pension participants a choice for a plan that will best suit their individual needs.

Benefits that have already been earned would not be affected and the pension changes would take effect on July 1, 2012, which is one day following the expiration of the current AFSCME contract.

Employees would have until January 1, 2012 to choose one of the three plans.

While employees hired prior to January 1, 2011 would have a choice between all three plans, those people hired after January 1 would choose from options two and three.

If approved, the changes are expected to decrease the current unfunded liability of $80 billion by $25 billion to a total of $55 billion.

Legislators are facing some very difficult decisions in the upcoming weeks and months. But if Illinois is to become a financially sound state, the pension system must be addressed.

As always, do not hesitate to call or email me if you have additional questions on this or any other issue. I can be reached at (815) 459-6453 or via e-mail at mike@miketryon.com.

Best Regards,

Michael W. Tryon, State Representative, District 64