Illinois Senate Approves Measure to Lower Chicago Schools’ Pension Contributions, Extend Funding Deadline

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The Illinois Senate on Wednesday passed a bill that decreases the annual pension contribution required from Chicago Public Schools over the next two years.

The bill also gives CPS four more years to reach its 90 percent funding target.

From Pensions & Investments:

The measure passed the Senate on Tuesday by a 37-1 vote and headed to the House.

SB 318 requires the state to contribute $200 million to the teachers’ pension fund for the current fiscal year ending June 30, 2016, and extends the deadline for the teachers’ pension plan to reach 90% funding to 2063 from 2059. Currently, the pension plan is about 51.5% funded.

Further, SB 318 reduces Chicago Public Schools’ required pension contribution for fiscal year 2016 to $207 million and provides a tax levy to help cover pension costs.

A statement on the pension fund’s website says it opposes the changes. “An increase in state contributions and the reinstatement of our tax levy are important steps toward full funding,” said Charles A. Burbridge, the pension fund’s executive director, in a letter on pension fund’s website.

The contribution cut is massive; the 2016 payment’s original amount was in the ballpark of $700 million, but will be reduce to around $200 million if the bill moves forward.

 

Photo credit: “Gfp-illinois-springfield-capitol-and-sky” by Yinan Chen – www.goodfreephotos.com (gallery, image). Via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Gfp-illinois-springfield-capitol-and-sky.jpg#mediaviewer/File:Gfp-illinois-springfield-capitol-and-sky.jpg

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