Thursday, November 29, 2012

A Walk Around the Capital

SUAA Mini Briefing
November 27, 2012

A Walk Around the Capitol

Veto Session began at Noon today with seemingly nothing on the agenda relating to pensions. The bustle is truly geared around gaming expansion, driver's licenses for undocumented immigrants, confidentiality of corporate tax returns, Mississippi River shut-down between Cairo and St. Louis, medical marijuana, budget spending issues and additional bonding to pay vendors.

Most likely all talk of Pension Reform will be held until the January Lame Duck Session (January 2nd through noon on January 9th, 2013) or possibly during the 98th General Assembly spring session. This is in all likelihood the best route to take because the number of votes required to pass a bill changes - veto session requires a bill that takes effect immediately a three-fifths vote to pass (71 in the House and 36 in the Senate). After January 1 the votes needed to pass drops to 60 votes in the House and 30 in the Senate.

New to the slate of bills that would affect SUAA/SURS is HB6252 - Pension CD-close State Systems sponsored by Rep. Andre Thapedi. (Retirees and those currently working are not included in this legislation.) (1) The bill provides a health insurance cost shift to new employees. (2) It also eliminates the eligibility for new employees to participate in SURS. Instead a tax sheltered annuity plan - 403(b) - would be established. (3) SURS-covered employers would be required to contribute 50% of the annual certified contribution in year 2014; in 2015 the employers would be required to pay 101% of the previous fiscal year's certified contribution or whichever is less. State would be responsible for the difference between the actual certified amount and the amount contributed by the employers. (4) The State's contribution to CIP (College Insurance Program) along with the CIP Continuing Appropriations Act is completely eliminated. Funding would fall upon employer and employee contributions and premium payment. Additionally this legislation effects TRIP in the same way.

All members are encouraged to weigh in on new or current legislation. Other pension bills which are still alive are: SB1673, HB6204, HB6209, HB6210 and SB3932. The possibility of additional pension legislation and health insurance are certain to come.

As time passes it could become the contention of at least certain legislators that a "one-size-fits-all" pension reform cannot function properly. However, since the identical aim seems to be at all systems there most likely will not be an attempt to alter any legislation to allow any custom fits.

Even though the Constitutional Amendment did fail it would be short-sighted to think that another amendment will not be forthcoming for the 2014 election. The next attempt will be of few words and to the point. The goal, of course, will be the repeal of the non-impairment clause in the Illinois Constitution (Article XIII).

Veto session will continue through Thursday of this week and again on Tuesday, Wednesday and Thursday of the first week in December (4, 5, and 6).

The Commission on Government Forecasting and Accountability (COGFA) has a Special Pension Briefing. This is receiving attention due to the $1Billion increase in required State pension contribution. See page 7 of the Report which is posted on the SUAA website.

Questions continue over health insurance; nothing new today to report. Medicare's open season continues until December 31.