PENSION PLAN’S KEY COMPONENTS

NEW WAY TO CALCULATE COST OF LIVING ADJUSTMENTS

COLA will be based on 3% of a maximum annuity amount based on their years of service.

The cap will be $1,000 for each year the employee had worked ($800 for those coordinated with Social Security).

Current and future retirees under age 67 would have their COLA paused until either they reach age 67 or until the fifth anniversary of their retirement, whichever comes first. *For future COLAs. Retired members will keep the compounded 3% annual increased they receieved up until the enactment.

NEW FUNDING SCHEDULE

Systems will be required to reach 100% funding in 30 years, beginning in fiscal year 2015 and ending in 2044.

FUNDING GUARANTEE

Pension systems can bring legal action to force the state to make required payments if it fails to do so on schedule.

SUPPLEMENTAL CONTRIBUTIONS

Beginning in 2020, the state will annually contribute $1 billion in addition to regular contributions to pension systems.

These additional contributions will continue until all systems reach their funding goal. EMPLOYEE CONTRIBUTION INCREASE On July 1 employee contributions increase an additional 1%. On July 1, 2014, contributions increase an additional 2%.

RETIREMENT AGE INCREASES For current employees who are under 45 years old, the minimum retirement age will increase by the following number of years based on the employee’s current age:

NON-GOVERNMENT GROUPS BANNED

New employees of several “non-governmental” organizations (such as the Illinois Municipal League, the Illinois Principals Association and the Special Olympics) will be prohibited from participating in the pension systems.