Illinois lawmakers proposed a new plan Wednesday to correct the most underfunded pension system in the nation. 

Elaine Nekritz, D-Northbrook, representative and chairwoman of the House Personnel and Pensions Committee, along with State Rep. Daniel Biss, D-Evanston, and other colleagues proposed eventually raising current employee contributions by 2 percent, staving off retirement for younger employees and limiting cost-of-living adjustments. According to the bill the sponsors submitted, those aged 46 and older will not see a change in their retirement age, but all other employees may see their retirement age increase somewhere from one to five years. The bill will also reduce cost of living increases and shift more teacher pensions costs to school districts.

“We need to do something, and we need to do something sooner rather than later,” said State Rep. Dave Harris, R-Arlington Heights, and sponsor of House Bill 6258. “Our state is being ruined financially by our increasing pension obligations.” 

Lt. Gov. Sheila Simon said she feels this step closer toward pension reform is very important.

“Without action, the strain pension payments place on our budget will crowd out funding for other priorities like education, public safety and health care,” Simon said in a press release Wednesday.

Pension payments are creating this strain because only 45 percent of the state’s five pension agreements, including the State Universities Retirement System that manages the pensions for University employees, are currently funded, leaving about $96 billion in liability.

Gov. Pat Quinn, speaking in April, proposed a plan that he said would fully fund pensions by 2042. Speaking on campus Thursday, he said he was confident there would be a bipartisan majority for pension reform by the time new legislators are sworn in on Jan. 9.

“I think it’s very helpful for the public to have a bipartisan showing of support for pension reform,” he said. “We have 34 days until Jan. 9, and we really have to use this opportunity after the election — so politics is kind of behind us of the Election of 2012 — (to) get everybody to work for the future of Illinois, for the common good.”

Michael Zalewski, D-Summit, said the proposed bill balances the needs of the state’s finances with the needs of public employees after retirement.

“What’s perhaps different about (House Bill) 6258 is that it’s an organic effort by a bipartisan group of legislators to address the pension crisis in a balanced way that protects the retirements of public sector workers,” he said.

To raise greater awareness of this crisis, Quinn launched the Internet campaign “Thanks in Advance” on Nov. 18. The General Assembly discussed pension reform at the veto session held Nov. 27-29, but further discussion will have to take place when the assembly reconvenes Jan. 3-8. Newly elected representative, comprising a Democratic supermajority, will be sworn in Jan. 9.

“We have supported other reform legislation and would definitely consider other good ideas moving forward,” Nekritz said in a press release Wednesday. “But we must continue to push this issue forward and not let excuses get in the way of progress.”

This new pension plan would affect SURS and therefore University staff. The Institute of Government and Public Affairs proposed a new retirement system on Feb. 9 to reduce state government’s contributions into the University pension system. These payments are supplemented by worker and University contributions. Currently, the University estimates its pension payments for the upcoming fiscal year to be $1,020 million, an increase of $227 million from the previous year. 

“SURS employees, depending on their age and salary, might see a slight increase in their pension contribution and increase in their retirement age,” Zalewski said. “The University of Illinois stands to benefit if this legislation passes. If we gain control of our mounting pension debt, we can begin to address serious funding shortages that have left our universities without adequate resources.”

Ilya Gurevic contributed to this report. Chrissy can be reached at [email protected].