New Law Saves Taxpayers Billions, Provides Retirement Protection for Illinois Workers
SPRINGFIELD - April 14, 2010. Governor Pat Quinn today signed into law the most significant public pension reform bill in our nation's history that will save taxpayers billions of dollars while protecting the retirement of state workers.
"From the moment I took office, I have worked to overhaul Illinois' pension system to provide relief to taxpayers while protecting the savings of Illinois retirees. This effort was realized when the General Assembly passed a major and unprecedented public pension reform bill, and I am proud to sign it into law. I congratulate House Speaker Michael Madigan and Senate President John Cullerton for their leadership on this crucial issue. I also commend members of the General Assembly for their bi-partisan support and for helping to bring in a new era of greater fiscal responsibility and accountability to Illinois," said Governor Quinn.
The new law will save taxpayers more than $200 billion over nearly 35 years, stabilize current employee pensions and provide new state workers with an attractive pension plan.
Senate Bill 1946 was sponsored by Senate President John Cullerton (D-Chicago) and House Speaker Michael Madigan (D-Chicago). The legislation caps pensionable salary at $106,800 and raises the retirement age for full benefits to 67 with ten years of service. Employees will be eligible for reduced benefits at age 62.
The changes apply to new hires only and take effect on January 1, 2011.
The new law eliminates the 3 percent annually-compounded cost-of-living rate increase and replaces it with simple interest raises of half the consumer price index (CPI) or 3 percent, whichever is lower. The legislation also forbids the practice of pension "double-dipping," where someone receives a public pension while drawing a salary from a different public system.
The new law is being hailed by lawmakers and public servants who applaud the state's effort to reign in spiraling public pension obligations and restore the state's financial integrity now and in the future. (See attached quote and background sheets).
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