Crain’s Chi Business’s Greg Hinz has details, ” from multiple sources in both chambers, and from both sides of the aisle”:
The big savings projected to total about $160 billion over 30 years would come from reduced annual cost-of-living adjustments (or COLAs, as they’re generally known). Right now, everyone in the state funds gets a flat 3 percent a year, compounded.
Under the proposed new formula, the COLA only would apply to one’s years on the government job, times $1,000. That means, for instance, that a 25-year government veteran would get a 3 percent annual COLA only on the first $25,000 of their pension, even if the total pension was $50,000. That employee would get no COLA on that second 25-grand.
More on that . . .
Then retirement age:
Another savings would come from raising the retirement age. Those workers who are at least 45 years old would see no change. But younger workers would gradually have to work up to five years longer to start receiving their pension. (In some plans, you can retire as young as 58.)
In exchange, workers would contribute 1 percentage point less of their salary toward their retirement than what they pay now. Rates now range from 6 or 7 percent to 11 or 12 percent, depending on the specific pension fund.
Plus details . . .
With expected results:
If it works as described, taxpayers would save $160 billion or so over the next three decades and the pension systems would become fully funded.
Unions expected to “put up quite a fight next week” in special session Dec. 3. But Mayor Rahm and Gov. P-Quinn like it a lot. Full details to be announced Friday. Rather exemplary hard work by Hinz here.