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Introduced by Illinois House Speaker Michael Madigan and Illinois House minority leader Tom Cross. This bill has not been passed.

SB512 creates a three tier choice for current Cook County Employees:

1) Traditional Benefit Package: Current Tier 1 defined benefit structure, but requires a higher employee contribution.

  • Employees contribute 14.65% of their salary instead of the current 8.5%.

2) Reformed Benefit Package: This is the current Tier 2 defined benefit structure.

  • Retirement age is raised to 67, COLA is reduced to 3% of half of CPI, Final Average salary is the average of the highest 8 years in the last 10 years, and the maximum benefit amount is $106,000 annually.
  • Employees contribute 7% of salary instead of the current 8.5%.

3) Self Managed Plan: This is a defined contribution plan, similar to a 401(k).

  • Employees would contribute a minimum of 6% of salary and the Employer would contribute 6% of salary. Employees would then invest their savings through a plan administered by the pension fund.
  • Vest at 5 years of employment and keep the employer contribution.
  • Employees that only participated in the SMP would not be eligible for retiree health care through the pension fund.
  • Only 20% of the workforce can participate in the SMP at any time.

Current Employees pick their plan depending on their status:

A) Current Tier 1 Employee

  • Less than 5 years: Any Plan (1, 2, or 3)
  • More than 5 years: Traditional (1) or Reformed (2)

B) Current Tier 2 Employees and Future Employees

  • Reformed (2)
  • Self Managed Plan (3)

C) Employees that Choose Traditional or Reformed can “re-pick” every 3 years

  • If they do not “re-pick” they default into the Reformed Benefit Package.
  • Employees can only opt down.
  • Once an employee has chosen the SMP (3) they cannot revert back into the reformed benefit package (2).

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