Recently, representatives from Cook County requested a meeting with the Illinois FOP Labor Council so that they could present their intentions to amend pension benefits for current employees, commonly referred to as Tier 1 employees (hired prior to January 1, 2011) and Tier 2 employees (hired on or after January 1, 2011. These benefits are controlled by the Illinois State Legislature and therefore require legislative action in Springfield. The meeting took place on April 22, 2014; Attorney John Roche and I attended the meeting.
While the County representatives did not have a legislative bill actually drafted, they described the structure of the bill as well as the concepts that they intend to include in the bill. These changes should be of concern to active and retired Cook County employees alike.
The contemplated bill would apply to active employees except for those eligible to retire in 2015. In a nutshell, the proposal would include an increase in contributions, a decrease in benefits and an increase in retirement age. Its terms would include unfavorable changes in final average salary formula, a salary cap and a reduced service multiplier. It also would include a one year freeze in COLA increases and then a reduction in COLA increases until the fund was at a funding ratio of over 100%. Further, it would provide for future suspensions of COLAs if the solvency of the fund deteriorates. While the bill would not seek to increase real estate taxes, it would provide for additional methods of funding. Although the proposal includes funding of retiree health insurance via a trust, the annual required contribution will be indexed by the CPI and not the medical inflation rate.
The County representatives indicated that beyond “tweaking”, they don’t intend on changing the structure of their proposal and will have a bill ready for presentation this upcoming Spring legislative session which starts April 29th.
We encourage you to reach out to your local representatives and tell them to OPPOSE Cook County Administration’s proposed changes to Cook County Employees’ Pension Plans, and to work with the Unions to come up with a workable, fair and reasonable solution to any pension shortfalls!