20 Aug 2014
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Quinn Signs Law Aimed at Closing Pension Loophole for Lawmakers

A special session on state pension reform is slated to start Friday.

Quinn Signs Law Aimed at Closing Pension Loophole for Lawmakers

A day before lawmakers were due back in Springfield for a on pension reform, Gov. Pat Quinn signed legislation aimed at preventing lawmakers from cashing in on the state pension fund.

House Bill 3969, sponsored by State Rep. Tom Cross, R- Oswego, will prevent outgoing and former state legislators from boosting their pensions by taking another government job at a higher salary once they leave office.

The new law will require former lawmakers to either opt out of the higher pension at the new job, or require the hiring government agency’s pension fund to take on the additional cost.

Currently, General Assembly members who began serving before Aug. 22, 1994 and obtain a higher-paying job at the state, county or municipal level can receive a legislative pension based on their new higher salary as long as their new employer has a reciprocal agreement with the General Assembly Retirement System (GARS).

A law passed in 1994 meant that anyone elected to the General Assembly from that point forward would be able to collect a pension based only on their final salary as a member of the Illinois House or Senate, even if they went on to obtain a more lucrative government position. But those who served before the Aug. 22, 1994 cutoff date were exempt from the law.

“This is a loophole that has been abused over the years by former lawmakers and it has to stop,” Cross said.  “A former lawmaker will still be able to continue public service, but if they do it for a limited period of time—just to boost their pension—that will no longer be tolerated at the state’s expense.”

Pension session starts Friday

Late last month, Quinn called the Aug. 17 special session after pension reform talks stalled in May.

At the time, House Speaker Michael Madigan agreed to drop a plan that would shift the teachers pension burden onto local school districts.

But during a meeting last month with Quinn, officials learned that the shift could still be on the table, costing the district an estimated $11 to $12 million.

Board of Education President Roger Bonuchi said school districts could face the additional pension costs, phased in over a period of years, or see the General State Aid proration drop from 95 to 89 percent.

Village trustee Garrett Peck, who is running for the 49th District State Senate seat, weighed in on the special session, accusing Quinn of using it to “push higher property taxes onto suburban and downstate residents” in a press release.

“While I’m happy to see that Governor Quinn is finally taking some small action, unfortunately, he seems to be moving in the wrong direction with his insistence that local property taxpayers should pay for the failure of past governors and legislatures to meet their pension promises, “ Peck said.

“We are in this mess because politicians over promised with little or no regard for what the state could actually afford; then proceeded to inadequately fund the pension programs leading to the crippling $83 billion liability we face today,” Peck added. “Pushing that responsibility onto local property taxpayers is irresponsible and is not the solution.” 

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