By ELIZABETH DONALD

Illinois Correspondent

Illinois unions are calling for a Day of Action to push the Illinois General Assembly to fix Tier 2 pensions during the lame duck session.

On Monday, Jan. 6, the Illinois Education Association, Illinois AFL-CIO and others are pushing for a one-day lobbying session, setting up a number for constituents and Labor activists to call their legislators and ask them to fix the Tier 2 problem.

In 2010, the Illinois state legislature and then-Gov. Pat Quinn approved a law in the middle of the recession that forced state leaders to deal with decades of underfunding by changing the way state retirement benefits and calculated. It only affected employees who began their jobs after Jan. 1, 2011 – known as the Tier 2 employees.

The changes removed the Tier 1 annual cost of living adjustment, raised the age of retirement from 62 to 67 and changed eligibility from five years of service to 10 years.

It also capped the maximum salary on which a pension could be based, and altered the calculation to discourage “pension spiking” with a big raise just before retirement to ensure a bigger pension.

The plan was strongly opposed at the time by AFSCME and other unions. Tier 2 employees pay in the same amount as Tier 1, but must work seven years longer and see a six percent lower benefit in the first year, and over 20 years, as much as 20 percent less retirement income than Tier 1, according to AFSCME 31.

All K-12 teachers and certified staff pay nine percent of their salary into the pension system. Higher-education employees pay eight percent and education support staff pay 4.5 percent, regardless of whether they are in Tier 1 or Tier 2.

‘SAFE HARBOR’ LAWS

Economists and Labor leaders have argued that the Tier 2 benefits are so low they might violate federal “Safe Harbor” laws, according to Capitol News Illinois. Safe Harbor laws require that state pension plans cannot offer a benefit that is lower than Social Security, since public sector employees can’t contribute to Social Security.

The current proposal for a fix is a compromise between restoring full parity with Tier 1 and continuing with the current system. It would set retirement back at age 62 with a minimum of 10 years of service; adjusts the automatic annual increase to be one-half the consumer price index or three percent, whichever is greater; and changes the final rate of earnings to the highest six years of salary in the last 10 years of employment, among other changes.

The last day of action saw more than 55,000 letters and messages in a single week, calling for a change to Tier 2 pensions.

HOW TO PARTICIPATE IN DAY OF ACTION

People who would like to participate should call 938-800-0430 on Jan. 6 to be connected to their legislator. Then, according to IEA, they should ask the legislator to pass the Fair Retirement and Recruitment Act (House Bill 5909/Senate Bill 3988) during the lame duck session.

“Public service employees cannot wait for Springfield to fix the mess they created with the broken Tier 2 system,” read the statement from IEA.

Unions sharing the call for action include Metropolitan Order or Police, Illinois Federation of Teachers, AFSCME Council 31 and others. Other organizations supporting the Tier 2 movement include Illinois AFL-CIO, IAFF, Fraternal Order of Police/Illinois Labor Council, Illinois Nurses Association, Illinois Troopers, International Brotherhood of Teamsters, LiUNA! Midwest, SEIU Local 73 and more. For more information, visit fixtier2.com.