- Published: Wednesday, September 04, 2013 03:56 PM
As a member of the pension conference committee, I wanted to take this opportunity to provide a brief update. There are two topics that I would like to address: the timing of our work and recent news reports about items under consideration by the committee.
Regarding timing, I know that many people are frustrated that the committee has not yet completed its work and are anxiously awaiting our official proposal. Please know that I share this frustration: Hundreds of thousands of people rely on these pension systems to provide them with a secure retirement, and they deserve clarity and resolution as soon as possible. This problem weighs heavily on our state's fiscal condition and reputation, and we will all be better off when it is appropriately resolved.
This process has been lengthy, partly due to the difficult and contentious nature of the issue -- even as we hone in on a recommendation, conference committee members are hashing out every aspect of the topic carefully, and many components require significant compromise from all participants. Perhaps even more importantly, we are taking very seriously the need for a robust, credible actuarial evaluation of our final product. Consequently, we are requesting very thorough -- and, yes, time-consuming -- studies of our ideas.
These facts notwithstanding, the problem still stands before us and demands a resolution as soon as possible. I am completely committed to achieving this, and I am hopeful that I will be back in touch before too long to discuss our proposal.
This brings me to my second topic: a leaked media report about some of the committee's deliberations. On Friday, August 23, several news outlets published a list of items under consideration by our committee. These items included:
- A decrease in employee contributions by 1%;
- Replacing the current 3% automatic annual increase with a cost of living adjustment of one-half the consumer price index, potentially with floors and caps;
- Staggered delays to cost-of-living adjustments;
- Fully funding the pension plans over 30 years;
- Dedicating the pension funds money that is currently being used to make bond payments, beginning in Fiscal Year 2019;
- Switching to the Entry Age Normal actuarial cost method; and
- Changing interest rates used to calculate the money purchase option formula.
These ideas are in fact all under discussion by the conference committee, but nothing has been finalized yet and our conversations remain in a state of flux. That means that this is an ideal moment for you to share your feedback on these items as well as any other thoughts you have on the pension issue. Please email me at This email address is being protected from spambots. You need JavaScript enabled to view it. or call my office at (847) 568-1250. I look forward to hearing your thoughts as we hopefully enter the late stages of our deliberations, and I very much hope that we will be able to reach a compromise that, while painful, will be manageable for all stakeholders and will put our pension systems on a clear path to stability.
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