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| 1 | SENATE RESOLUTION NO. 317
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| 2 | WHEREAS, Public Act 96-0889 was passed in 2010 and | ||||||
| 3 | established, among other provisions, a "Tier 2" pension plan; | ||||||
| 4 | and
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| 5 | WHEREAS, Public employees who began service on or after | ||||||
| 6 | January 1, 2011 are now enrolled in what is commonly referred | ||||||
| 7 | to as the "Tier 2" pension plan; and
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| 8 | WHEREAS, The Tier 2 pension plan dramatically reduced | ||||||
| 9 | benefits for these members of the Teachers' Retirement System | ||||||
| 10 | (TRS) and the State Universities Retirement System (SURS); and
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| 11 | WHEREAS, At the time of passage of this plan, it was | ||||||
| 12 | estimated that this change would result in $64 billion in | ||||||
| 13 | savings to State taxpayers; and | ||||||
| 14 | WHEREAS, Members of the Tier 2 pension plan in TRS and SURS | ||||||
| 15 | do not participate in Social Security, and many experts believe | ||||||
| 16 | that the Tier 2 pension plan does not provide benefits that are | ||||||
| 17 | at least comparable to those provided by the Old-Age portion of | ||||||
| 18 | the Social Security program; and | ||||||
| 19 | WHEREAS, Failure to provide benefits at least comparable to | ||||||
| 20 | Social Security for Tier 2 members who do not participate in | ||||||
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| 1 | Social Security could result in severe unforeseen consequences | ||||||
| 2 | for taxpayers in the State of Illinois; and | ||||||
| 3 | WHEREAS, Illinois taxpayers need to be advised of all the | ||||||
| 4 | implications regarding this change, especially the possible | ||||||
| 5 | impact on property taxes, higher education budgets, and school | ||||||
| 6 | funding; and | ||||||
| 7 | WHEREAS, The Governor has called for the mandatory | ||||||
| 8 | participation of current Tier 1 members in the Tier 2 plan | ||||||
| 9 | after an undetermined date; and | ||||||
| 10 | WHEREAS, It would be irresponsible to pursue such a drastic | ||||||
| 11 | change without a federal determination as to whether or not | ||||||
| 12 | Tier 2 participants in TRS and SURS receive benefits that are | ||||||
| 13 | in compliance with protections provided under the Internal | ||||||
| 14 | Revenue Code of 1986; and
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| 15 | WHEREAS, Such a change would harm thousands of working | ||||||
| 16 | families throughout Illinois and significantly impact our | ||||||
| 17 | universities' and schools' workforces; and
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| 18 | WHEREAS, It would be irresponsible for the State of | ||||||
| 19 | Illinois to enact such a drastic proposal without studying the | ||||||
| 20 | financial impact it would have on taxpayers and working | ||||||
| 21 | families; therefore, be it
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| 1 | RESOLVED, BY THE SENATE OF THE NINETY-NINTH GENERAL | ||||||
| 2 | ASSEMBLY OF THE STATE OF ILLINOIS, that we urge TRS and SURS to | ||||||
| 3 | pursue an Internal Revenue Service ruling on the compliance of | ||||||
| 4 | Tier 2 with safe harbor provisions under Section 3121(b)(7)(F) | ||||||
| 5 | of the Internal Revenue Code of 1986; and be it further
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| 6 | RESOLVED, That TRS and SURS provide a detailed analysis on | ||||||
| 7 | the financial impact that the Governor's proposal would have on | ||||||
| 8 | the members of working families who are currently in the Tier 1 | ||||||
| 9 | pension plan; and be it further | ||||||
| 10 | RESOLVED, That this report be completed prior to any | ||||||
| 11 | consideration of the Governor's proposal to move Tier 1 | ||||||
| 12 | participants in TRS and SURS into Tier 2.
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