Who To Call
Board and Committees
|LEGISLATION AND RSEA
August 2, 2012
Over the past year and a half, members of the RSEA legislative and
legal committee and our lobbyist, Randy Witter of Cook-Witter, have
met with legislators, the legislative Commission On Government
Forecasting and Accountability (COGFA), and administrative staff of the
Department of Central Management Services (CMS). We have done this
along with two other retiree groups that we have been working with –
the State University Annuitants Associations (SUAA) and the Illinois
State Employees Association Retirees (ISEAR). As a result of these
meetings, there have been some successes in reducing some of the
adverse affects of proposals to change pension benefits.
In the summer of 2011, the COGFA commissioned Mercer Consulting to
recommend alternative approaches for increasing the cost to state
retirees for health insurance. The RSEA legislative and legal
committee closely reviewed the Mercer Consulting recommendations,
prepared a list of questions and issues regarding them, and met with
the COGFA Executive Director to review the questions and problems.
Representatives from SUAA and ISEAR also attended the meeting.
Following this meeting, the recommendations contained in the Mercer
Report were set aside and not implemented.
During the last couple of months, representatives from RSEA, SUAA,
and ISEAR have been meeting with administrators from CMS for the
purpose of exchanging information. This has provided an opportunity
for the three retiree groups to identify situations that CMS may not
have considered in developing the health insurance premium formula.
Although the premium formula has not been finalized, it appears that
CMS may incorporate some features in the formula based on
information exchanged in these meetings.
One example is that anyone who retired prior to July 1, 2012 will be
placed in the premium formula’s highest point count category for
years of service and age at retirement. This will significantly
reduce the amount of premium required for many retirees who retired
at an early age and/or with fewer than the maximum years of service
required for full pension annuity payment.
Another example is that anyone who is age 65 or older and not
eligible for Medicare will be placed in a premium formula category
as though they are eligible for Medicare. This will significantly
reduce the amount of premium required for those retirees.
These meetings are planned to continue until such time as CMS
finalizes the insurance premium rate formula and implements the
process for collecting the premiums. Although these meetings have
helped to reduce the adverse affect of the pension changes, the
affects of PA 97-695 and the legislative proposals included in
SB1673 and HB1447 will have major negative impacts on retirees. The
RSEA board will continue to oppose changes that adversely affect the
pension benefits of state retirees.
The RSEA board does not agree with the pension changes put into law
by the Legislature and the Governor with the passage of PA 97-695
and the changes proposed in SB1673 and HB1447. Nor do we think they
should go unchallenged.
Three separate lawsuits have been filed to challenge the legality of
PA 97-695. Each of these lawsuits has been filed by a separate
individual or group of individuals. The RSEA board has been
contacted by participants in two of the lawsuits. If other
legislation, such as SB1673 or HB1447, is approved by the
Legislature and the Governor, additional lawsuits will likely be
filed. The RSEA board is considering the options for supporting or
participating in these actions.
We believe that the language in the Illinois Constitution refers to
pension benefits and that there is a contractual obligation on the
part of the state to honor the pension benefits offered in return
for the services rendered by retirees during their time of
employment; that includes the pension benefits offered and accepted
by retirees. However, these are now becoming issues that will be
decided in a court of law.