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1
HOUSE RESOLUTION

 
2    WHEREAS, According to the Commission on Government
3Forecasting and Accountability (COGFA), based upon the
4actuarial value of assets, the total unfunded pension
5liabilities of the State retirement systems totaled $111.2
6billion on June 30, 2014; and
 
7    WHEREAS, COGFA has also indicated that between Fiscal Year
82001 and Fiscal Year 2014, the combined unfunded liabilities of
9the retirement systems increased by $86.2 billion based upon
10the market value of assets; and
 
11    WHEREAS, The certified contribution to the 5 State-funded
12retirement systems has increased from $1.33 billion in Fiscal
13Year 2001 to $7.6 billion in Fiscal Year 2016; and
 
14    WHEREAS, The Illinois Supreme Court made a unanimous ruling
15on SB 1 (Public Act 98-599), which found that pension benefits
16are a contractual and constitutionally protected right that
17cannot be diminished or impaired; and
 
18    WHEREAS, Regardless of the Illinois Supreme Court ruling,
19the effects of increased pension payments and liabilities are
20still serious problems, which are currently crowding out
21spending on other essential State services, and represent

 

 

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1problems that must be addressed in a constitutional way; and
 
2    WHEREAS, The Illinois Supreme Court's opinion laid a
3framework for the adjustment of benefits through a legal
4approach called "consideration", which allows for the
5adjustment of benefits if both parties agree to the changes;
6and
 
7    WHEREAS, The General Assembly has not thoroughly broached
8the possibility of a pension or partial pension exchange option
9for participants in State-funded retirement systems, which
10would consist of giving participants a lump sum payment for
11their annuity or a portion of their annuity, as a viable
12solution to addressing short and long-term savings; and
 
13    WHEREAS, Many of those nearing retirement may be attracted
14to having more control over their retirement assets, but
15unfortunately the State does not provide a versatile and
16competitive alternative to the current pension arrangement;
17and
 
18    WHEREAS, Providing a lump sum payment in exchange for all
19or a portion of an annuity would provide a voluntary,
20constitutional approach to addressing the State's pension
21obligations, while simultaneously providing participants the
22options and flexibility needed when planning for retirement;

 

 

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1therefore, be it
 
2    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
3NINETY-NINTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we
4urge the Speaker of the House of Representatives and the
5Chairperson of the House Personnel and Pensions Committee to
6hold a series of hearings on how the State could potentially
7approach a lump sum exchange option; and be it further
 
8    RESOLVED, That the Committee invite interested parties and
9stakeholders to these hearings in hopes of better understanding
10the positive and negative outcomes of an exchange proposal as
11well as any potential barriers that would prevent an exchange
12option from becoming a common practice within our State-funded
13retirement systems.