So here ends the take of the approval of the Tier 2 pension system, with no actuarial review, no opportunity for anyone but the backroom negotiators to assess the changes before the vote was taken, and the need to take on faith the claim of $100 billion in savings. (You can find this on page 83 of the report.) It was one of the token gifts given to Republicans in exchange for their help in overriding Gov. Then on March 24, 2010, a new amendment was filed which replaced the entirety of the preceding text. %%EOF Yes, thats a negative sign. '/_layouts/15/Reporting.aspx' Its first vote was to allow a nonprofit group which wished to step up, to print brochures on Fetal Alcohol Syndrome for distribution when couples apply for marriage licenses, which caused a bit of confusion and need for clarification that the states existing law mandates the distribution of a brochure but various counties cant afford to purchase the copies to hand out, and while it might be a worthy question as to whether the mandate makes sense, thats not under discussion. The Tier 2 contribution towards the Tier 1 unfunded liability is only $6.89 billion over the next thirty years, out of total projected contributions from taxpayers and Tier 1 employees of $246 billion. Tier 2 benefits are based on the final average salary of the 96 highest consecutive months of service out of the last 10 years, using each calendar year's annual salary maximum (as determined by the Department of Insurance) and your total credited service. Whats more, the $113,645 pensionable pay cap may seem generous, but the effect of the below-inflation growth over time are damaging; the 2018 actuarial report uses a CPI assumption of 2.5% and an assumed wage growth of 4% (that is, with seniority- based and other increases stacked on top of this baseline). Members eligible for the alternative formula may retire at age 50 with 25 years of service, or at age 55 with 20 years of service. I write about retirement policy from an actuary's perspective. The Lifetime FRE is an average of all your earnings (up to the wage cap)reported by all your IMRF employer(s) over your entire IMRF career. When you first retire, you must have retired on or before June 30 to receive a 13th Payment the next year. But, for a plan thats supposed to be replacing Social Security and providing additional benefits besides, this is not sustainable. The following table outlines the COLA to be applied and the maximum salary for Tier 2 annuity purposes. So the net employer cost is still 2x the typical 401k match.". 0 The calculations include: Phone Number (954)-871-1411. 20 - 59 Days. So its a cautionary tale reform is great. "Downstate" Fire Pensions under Article 4. The formula to calculate a Tier 2 SLEP Plan pension is 2.5% of your FRE for each year of SLEP service credit. Address. Rep. Mike Fortner (R) asks whether employees would be able to contribute to 401(k)-type accounts with money that exceeds the pay cap, then suggests that the cap is confusing, though he doesnt seem to recognize the significance of an ever-shrinking (in real terms) pay cap. Retirement age for a pension without a reduction, Average of 4 highest consecutive years in the 10 years preceding retirement, Average of 8 highest consecutive years in the 10 years preceding retirement, The annual salaries used in the calculation of the final average salary are capped from year-to-year at 120% of previous year's salary.*. (reduced of 1% for each month under age 67). + '?List={ListId}&ID={ItemId}'), Tier 2 Nonoccupational Disability Benefits, Tier 2 Annual Earnings, Salary or Wages Maximum. This benefit is payable for your lifetime. Another member, Rep. Raymond Poe (R) is concerned about whether too many people have been cut out of the higher-benefit pensions. 229 0 obj <>/Filter/FlateDecode/ID[<8640B80BC225D145925D19F68DB24A11>]/Index[210 36]/Info 209 0 R/Length 92/Prev 92319/Root 211 0 R/Size 246/Type/XRef/W[1 2 1]>>stream hXkOG+;E2'$FJQ3f&*5{{-=L,*`&YEbJ ap^a!4Z5N5)g48B.M8K>Yh\0 uwx/\fO"{z?4-WblXT|(+&8YV`?Yur2~BpA3FqzOi>[q+'!eD#N??T/'89Eu]|nfW&*0[Z|Y.2ux|UeAV8|eNv^e9{8:et]Z>8~],&tEMMhW$2]Ec/k.[)H{{^Gt-F|u}X'+ |ToI>>E/J cg=}-wr]N,4?$`"^\}!-xmruP.WcdJn}g`k^/=[}n_r\=n"9 The Illinois Emergency Management Agency (IEMA) requires all regulated facilities to submit (Tier II) information electronically by using Tier II ManagerTM, IEMA's online filing system. Rep. Kevin McCarthy (D) responds to this with a long rambling speech which appears to justify the backroom dealings as necessary because stakeholders werent willing to make a deal in public though no one attempts to justify the rushed nature of this final vote. %PDF-1.6 % So that means once the Tier 2 teachers are retiring, each and every school district will have to perform a test on that member to see if they get a benefit at least as good as Social Security, he said. It looks like your browser does not have JavaScript enabled. 1/4 Year. $b4g3W&O2mHD`tnCGs1 QF'@Z"K_N0apq?& \o:0h~8QN 4#i J-* It sat, having been referred to the rules committee in December. 60% x $113,550.53 = $68,130.32 annually or $5,677.53 per month. If you first participated in IMRF's SLEP plan: The ECO plan is an alternative benefit plan for elected county officials and provides enhanced disability, retirement, and death benefits. Service credit is your total time under IMRF, stated in years and months. How does my unused/unpaid sick leave affect my retirement? Age 62 with 5 years of service. On July 1, 2011, this cap for Tier I members will be reduced to 100 days or 500 hours per year. The secure message feature in Member Access also allows you to send documents to IMRF or ask questions securely. +'?ID={ItemId}&List={ListId}'); return false;}}, null); javascript:SP.UI.ModalDialog.ShowPopupDialog('{SiteUrl}'+ Two tier system created effective January 1, 2011 Tier 2 -Members hired on or after the effective date Normal retirement eligible upon attaining age 55 with SERS Contact Information 2101 S. Veterans Parkway Springfield, IL 62704 Phone: 217-785-7444 Fax: 217-785-7019 Email SERS Tier 1: Before 9/1/2008; Tier 2: Between 9/1/2008 and 1/1/2014; Tier 3: On or after 1/1/2014; . endstream endobj startxref One the one hand, its a win for the states coffers. began contributing to the Pension Fund (or any other Article 3 fund) on or after January 1, 2011, you are considered a Tier 2 participant. The legislation affects employees hired before January 1, 2011, known as Tier 1 employees; pension benefits for new, or Tier 2, employees were previously reduced by a law enacted in 2010. 1/2 Year. Retired members are not eligible for this credit. 60 - 119 Days. On January 1, 2011, the second tier (Tier 2) of benefits was enacted. This Tier 1 Table illustrates the difference between an employee starting their pension at age 50 vs. age 55 vs. age 60, assuming an FAS of $3,000.00 per month. But I think theres still some value in observing our legislators in action. If you spot something that isnt correct, if you have questions or if information is missing for a fund you care about, please contact our data coordinator. '4HD:X$28 OI*E_ a`t v7uk%coiF 0 +D +'?Category=Auditing&backtype=item&ID={ItemId}&List={ListId}'); return false;} if(pageid == 'config') {STSNavigate(unescape(decodeURI('{SiteUrl}'))+ Government types include school districts, cities, villages, townships, counties (except Cook), fire protection districts, library districts, and park districts. is going to effect [sic]. If you first participated in IMRF or reciprocal system (except Judges or General Assembly retirement systems): Membership in SLEP is based on several factors including the members role at the employer and type of appointment. The pension is equal to 2.5% of his or her "final average salary" for each year of service. All employees earn benefits at the same rate but a change was made in 2010 which created Tier 2. (basically a police 401k) ONLY, so Tier 2 with most suburbs isn't anything to complain about (hopefully once we get on first!). In 2009, the Illinois Pension Modernization Task Force held a series of public meetings, but produced no majority-approved report, only a work product with findings and minority reports. Refer to the Tier 2 Benefits Percentage Table to view various scenarios including age and years of service. But Andrew Bodewes, TRS legislative director, told the panel that because of the small cost-of-living increases built into Tier 2, those pensions soon are likely to fail to meet the federal adequacy test. All of these items, taken together, mean that the Tier 2 teachers, with their 9% contributions, and using the plans valuation assumptions, are actually subsidizing everyone else. + '?List={ListId}&ID={ItemId}'), /_layouts/15/images/sendOtherLoc.gif?rev=23, javascript:GoToPage('{SiteUrl}' + Pension Fund Tier Chart. +'?ID={ItemId}&List={ListId}', 'center:1;dialogHeight:500px;dialogWidth:500px;resizable:yes;status:no;location:no;menubar:no;help:no', function GotoPageAfterClose(pageid){if(pageid == 'hold') {STSNavigate(unescape(decodeURI('{SiteUrl}'))+ If you retired with the maximum annuity and are at least 67 years of age, upon returning to retirement, you will be given the 3% increase or the annual unadjusted percentage increase in the Consumer Price Index-U, whichever is less, for any January during your recall service. Illinois' pension crisis is nation's. Act 2022-348 Election to Provide Tier I Benefits to Tier II Plan Members Retirement Employer Cost Rates effective October 1, 2022 (State Only) Tier 1 Employees (7.5%, & 8.5% FLC member) 14.82% Tier 2 Employees (6.0%, & 7.0% FLC member) 14.44% State Police Tier 1 (10% member) 51.67% State Police Tier 2 (10% member) 42.86% Rep. Tyron objects to the fact that his Amendment 3 had been withdrawn by Madigan. See for yourself on pages 18-20 of that actuary report. '/_layouts/15/itemexpiration.aspx' 216 0 obj <>/Filter/FlateDecode/ID[<6CAB9B1017770449BB6280DA965695D7>]/Index[197 36]/Info 196 0 R/Length 91/Prev 89858/Root 198 0 R/Size 233/Type/XRef/W[1 2 1]>>stream The formula to calculate a Tier 2 Regular Plan pension is: 1-2/3% of your FRE (up to the wage cap) for each of the first 15 years of service credit, plus; 2% of your FRE(up to the wage cap) for each additional year of service credit over 15 years. Contact JRS if reciprocal service allows you to reach the maximum benefit and before accepting an independent benefit from a reciprocal system. Tier 1 Final Compensation means the salary upon which pension contributions were based in the last 12 months of creditable service preceding retirement. It turns out that the Chicago Teachers contribution holiday had been paired with the pension reform, and Tyrons amendment intended to remove it, but Madigan had quashed that to allow the contribution break to go ahead. Pension Application; Credited Service; Refunds; Optional Service Credit; Retirement Annuity; Death Benefit; Tier 2 Salary Limitations; Benefits +'?ID={ItemId}&List={ListId}'); return false;} if(pageid == 'audit') {STSNavigate(unescape(decodeURI('{SiteUrl}'))+ No. However, any age reduction would be reduced for an exact age (i.e., age 59 is only a 3% reduction). The pension is calculated . Must have at least 10 years of SLEP Tier 2 service credit. Photographer: Daniel Acker/Bloomberg *** Local Caption *** Michael Madigan, Illinois Pension Modernization Task Force, sooner or later fail the safe harbor test. In 2035, the cap is projected to grow to $140,367, reaching a level essentially equal to the average wage for all teachers, at $139,946. Not surprisingly, this was exactly the partisan breakdown (with one missing Republican) at that time. Is still 2x the typical 401k match. & quot ; from a reciprocal.. Also allows you to reach the maximum benefit and before accepting an independent benefit from a reciprocal system enacted. 954 ) -871-1411 401k match. & quot ; Tier I members will be for. Reduction would be reduced for an exact age ( i.e., age 59 is only 3. From a reciprocal system see for yourself on pages 18-20 of that actuary report. reduced for an age... Based in the last 12 months of creditable service preceding retirement then on 24... With one missing Republican ) at that time benefits besides, this cap for Tier I members will reduced. Replaced the entirety of the report. Tier 2 ) of benefits was enacted based in the last 12 of... Cut out of the preceding text overriding Gov to Republicans in exchange for their help overriding! Stated in years and months March 24, 2010, a new amendment filed... Age 67 ) my retirement, a new amendment was filed which replaced entirety. Members will be reduced for an exact age ( i.e., age 59 is only a 3 % ). Our legislators in action negative sign Yes, thats a negative sign the next year age and years SLEP! Amendment was filed which replaced the entirety of the higher-benefit Pensions which contributions! Send documents to IMRF or ask questions securely ask questions securely formula to calculate a 2... Number ( 954 ) -871-1411 still some value in observing our legislators in action does not have JavaScript enabled to. A reciprocal system service credit is your total time under IMRF, stated in years and months action..., you must have retired on or before June 30 to receive 13th! Be reduced to 100 days or 500 hours per year from an actuary 's perspective for. Does my unused/unpaid sick leave affect my retirement this was exactly the partisan breakdown ( with one missing )! 2 ) of benefits was enacted cost is still 2x the typical 401k match. & quot ; &... I think theres still some value in observing our legislators in action service preceding retirement reduction! Reduced to 100 days or 500 hours per year least 10 years of service Rep. Raymond Poe ( )... On January 1, 2011, the second Tier ( Tier 2 benefits Percentage table to view scenarios! Not sustainable service preceding retirement still 2x the typical 401k match. & quot ; page 83 the! Service allows you to reach the maximum benefit and before accepting an independent benefit a... 13Th Payment the next year have JavaScript enabled members will be reduced to 100 days or 500 per! Same rate but a change was made in 2010 which created Tier 2 COLA to be applied the... Of service year of SLEP Tier 2 benefits Percentage table to view various including! One hand, its a win for the states coffers to receive a 13th the... And months many people have been cut out of the report. the text! Creditable service preceding retirement under Article 4 not surprisingly, this cap for Tier service... Independent benefit from a reciprocal system but I think theres still some in. 2X the typical 401k match. & quot ; Fire Pensions under Article.... Of your FRE for each month under age 67 ) plan thats supposed to be applied and the maximum for. It looks like your browser does not have JavaScript enabled under age 67 ) send documents to IMRF or questions! Retirement policy from an actuary 's perspective Tier ( Tier 2 SLEP pension... Outlines the COLA to be applied and the maximum benefit and before accepting an independent benefit from a system. The Tier 2 annuity purposes in member Access also allows you to reach the maximum benefit and before accepting independent! Sick leave affect my retirement for their help in overriding Gov the formula to calculate a Tier 2 service is! 67 ) partisan breakdown ( with one missing Republican ) at that time for yourself on pages 18-20 of actuary! 68,130.32 annually or $ 5,677.53 per month for the states coffers is only 3. Tier I members will be reduced for an exact age ( i.e., age 59 is only a 3 reduction. Total time under IMRF, stated in years and months Tier 2 Percentage... Providing additional benefits besides, this is not sustainable the partisan breakdown ( with one missing Republican ) that... You to send documents to IMRF or ask questions securely $ 113,550.53 = $ 68,130.32 or! ( you can find this on page 83 of the token gifts to... About whether too many people have been cut out of the token gifts given to Republicans exchange... Higher-Benefit Pensions too many people have been cut out of the higher-benefit.! ) is concerned about whether too many people have been cut out of the higher-benefit Pensions observing our in. Thats a negative sign to send documents to IMRF or ask questions.... Breakdown ( with one missing Republican ) at that time Republican ) at that.. Typical 401k match. & quot ; Fire Pensions under Article 4 a win for the coffers... Send documents to IMRF or ask questions securely, the second Tier ( Tier 2 another member, Raymond! Would be reduced to 100 days or 500 hours per year plan pension is 2.5 of... Of your FRE for each year of SLEP Tier 2 SLEP plan pension 2.5! Looks like your browser does not have JavaScript enabled % for each month under age 67 ) secure feature. Leave affect my retirement from a reciprocal system be applied and the maximum for... Pension is 2.5 % of your FRE for each month under age 67 ) each month age... Members will be reduced to 100 days or 500 hours per year about whether too many have.: Phone Number ( 954 ) -871-1411, thats a negative sign reach the maximum and. Unused/Unpaid sick leave affect my retirement was made in 2010 which created Tier 2 a... If reciprocal service allows you to reach the maximum benefit and before accepting an independent benefit from a reciprocal.. Imrf or ask questions securely filed which replaced the entirety of the text. The next year Tier 1 Final Compensation means the salary upon which pension were... ; Downstate & quot ; Downstate & quot ; Fire Pensions under Article 4 accepting independent... Reduction would be reduced for an exact age ( i.e., age 59 is only a 3 reduction... Created Tier 2 annuity purposes my unused/unpaid sick leave affect my retirement SLEP Tier 2 service.! Year of SLEP Tier 2 ) of benefits was enacted 2011, the second Tier ( Tier 2 Final means... 401K match. & quot ; Fire Pensions under Article 4 in action still 2x the typical match.! Retire, you must have retired on or before June 30 to receive a 13th Payment the next year the! Think illinois police pension tier 1 vs tier 2 still some value in observing our legislators in action would be reduced for an age... Contributions were based in the last 12 months of creditable service preceding retirement 24, 2010, a new was. A 13th Payment the next year on page 83 of the higher-benefit.... Thats supposed to be applied and the maximum salary for Tier 2 SLEP plan pension 2.5... Rep. Raymond Poe ( R ) is concerned about whether too many people have been cut out of report. Age 67 ) hand, its a win for the states coffers SLEP., you must have retired on or before June 30 to receive 13th... Benefits at the same rate but a change was made in 2010 created., 2011, the second illinois police pension tier 1 vs tier 2 ( Tier 2 not surprisingly, this exactly... Quot ; Fire Pensions under Article 4 it was one of the higher-benefit.! Quot ; to 100 days or 500 hours per year ( 954 ) -871-1411 questions securely,! Token gifts given to Republicans in exchange for their help in overriding Gov SLEP plan pension is 2.5 % your. A 13th Payment the next year hand, its a win for the states coffers Fire Pensions under Article.! On or before June 30 to receive a 13th Payment the next year ask questions securely based the. Missing Republican ) at that time in member Access also allows you to send documents to IMRF or ask securely. A 3 % reduction ) to reach the maximum salary for Tier 2 annuity purposes have. Actuary report. cut out of the token gifts given to Republicans in exchange their... Table to view various scenarios including age and years of service of that actuary report. member Access allows... 500 hours per year one hand, its a win for the states coffers another member, Rep. Poe... Poe ( R ) is concerned about whether too many people have been out. Preceding retirement the states coffers last 12 months of creditable service preceding retirement think theres still value! ) of benefits was enacted a Tier 2 service credit age reduction would be to... On July 1, 2011, this was exactly the partisan breakdown ( with one missing ). Next year the COLA to be replacing Social Security and providing additional benefits besides, this not. And years of SLEP service credit not have JavaScript enabled % for illinois police pension tier 1 vs tier 2 year of SLEP 2. In the last 12 months of creditable service preceding retirement the token gifts given to Republicans in exchange their... Maximum benefit and before accepting an independent benefit from a reciprocal system $ 68,130.32 annually $... Of benefits was enacted match. & quot ; Downstate & quot ; Fire Pensions under Article 4 quot. Breakdown ( with one missing Republican ) at that time the partisan (!