Having written about state government for two-plus decades, and removing proper nouns like Blagojevich, Quinn, Rauner and Pritzker, it’s quite possible I’ve not typed a single word more often than pension.
Like many other hot button words informing political discussions, pension – especially when modified with words like underfunded or crisis – has almost become shorthand: we all know what it’s supposed to imply but when pressed to define the particulars of the situation, deference to experts is essential. Expect a history lesson, bring a calculator and a working knowledge of actuarial science.
This context sets the table for discussing House Bill 5909, the subject of Friday’s House Personnel and Pensions Committee hearing. It might fairly be called the “Fix Tier 2″ bill; perhaps you have seen the yard signs or public demonstrations promoting this message. But that bill, along with Senate Bill 3988, also are jointly dubbed the Fair Retirement and Recruitment Act.
Tier 2 applies to state employees hired since Jan. 1, 2011. Those workers must stay on the job until age 67 to retire with full benefits; for Tier 1 employees the youngest age is 55. Tier 2 also promises a smaller pension benefit based on cost of living formulas and new formulas.
For the union perspective, one resource is ift-aft.org/fixtier2, a dedicated page from the Illinois Federation of Teachers. Organized labor fought against Tier 2 before its enactment, and the suggested fixes would largely eliminate the distinctions.
For the taxpayer perspective, a leading resource is Gov. JB Pritzker, who frequently mentions annual improvement in the pension funding ratio, along with improved credit ratings as government recovers from, among other self-inflicted injuries, the disastrous implications of budget stalemates from the last decade.
The broad strokes are clear. Lawmakers for too long promised pension benefits but didn’t pay the state’s share into accounts that fund those pensions. With the 1970 state constitution making it virtually impossible to undo those promises, the plausible path was setting new terms going forward.
That means every Tier 2 employee could see the terms when starting their jobs. Further, if nothing ever changes, eventually there will be no Tier 1 employees, neutralizing every argument about inequity. Perhaps by then there will be a Tier 3!
Illinois must act to ensure Tier 2 benefits don’t fall below the federal guarantees of Social Security – to the extent Springfield can trust Washington – but every other sticking point is a matter of political will and available funding. Unions should absolutely fight for their members, but lawmakers stand on the firm ground of fiscal responsibility.
This may not be the defining political fight of 2025, but observing Illinois government means never letting pensions move too far from the front burner.
• Scott T. Holland writes about state government issues for Shaw Local News Network. Follow him on X @sth749. He can be reached at sholland@shawmedia.com.
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