House advances bill addressing cost-of-living increases

SPRINGFIELD, IL – With a collective focus on getting control of Illinois’ public sector pension crisis, state Rep. Jehan Gordon-Booth (D-Peoria) and state Rep. David Leitch (R-Peoria) furthered their push for meaningful reform aimed at ensuring the retirement security of area constituents while being fierce stewards of taxpayer dollars.

“We must continue to work collaboratively to craft a solution to our pension crisis with all stakeholders committed to getting the job done,” said Gordon-Booth. “While nothing about this issue is easy, it is incumbent upon the Legislature to take affirmative action to halt our continued fiscal decline due to ballooning pension debt.”

Under House Bill 1165, passed by the House of Representatives on Thursday, cost-of-living adjustments (COLA) would be based on the first $25,000 an employee earns. Any salary beyond that threshold would receive an additional $750 each year. Taking into consideration lower-income annuitants, retirement plans valued at less than $25,000 would still be eligible to receive 3% compounded adjustments until they reach the threshold.

The COLA changes passed by the House are projected to save the state $15.1 billion in contributions to the State Employees Retirement System (SERS), and result in savings of more than $100 billion when including the General Assembly, State Universities and Downstate Teachers’ retirement systems, each of which are included in the legislation. COLA’s already earned remain will remain in place, and changes will only impact future cost-of-living adjustments for current and future retirees.

“A few of us opposed the financially irresponsible bill to create the 3% compounded COLA to begin with,” Leitch said. “Now that the day of reckoning has arrived, we must deal with the mess that threatens the very sustainability of the pension systems themselves.”

Additionally, under House Bill 1165, current and future retirees would have the year in which they can receive their cost-of-living adjustment delayed. While retirees who are age 67 and older would be unaffected by this delay, those under age 67 would have their COLA paused until either they reach age 67 or until the 5th anniversary of their retirement, whichever comes first.

For more information, contact state Rep. Jehan Gordon-Booth at (309) 681-1992 or state Rep. David Leitch at (309) 690-7373.