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).