Since introduction, the SBAC urged legislators to support a pension reform bill previously introduced by Representative Mark Batinick. Under this proposal, eligible retirees will be offered the option to take a lump sum payment in exchange for all or a portion of their annuity, at a 25% discount to the state. Only those retiring will be presented this option. While Illinois faces a growing $111 billion pension shortfall, this bill could potentially net the state billions in long-term savings. Most importantly, this legislation provides a voluntary and constitutional approach to addressing the state’s pension obligations, while giving retirees greater control over their money.
While the standalone measure was not approved, House Bill 3342, the FY19 budget implementation bill which passed the House on May 31, 2018, included the “Batinick Buyout,” a plan for a buyout of vested inactive members of the five state-funded pension systems. It also includes an optional buyout of the 3% compounding cost of living adjustment at retirement. This is a first step in a series of steps to reduce the state’s unfunded pension liability, saving taxpayers millions in contributions.