PLAINFIELD – State Rep. Mark Batinick (R-Plainfield) is ready to file new legislation to address the state’s mounting unfunded pension liability. In his first year as a legislator, Rep. Batinick proposed a series of hearings on offering a lump sum buyout option to current and future annuitants nearing retirement, and spoke about the benefits of this initiative on Fox News Chicago and other local outlets. Now he is prepared to push out the legislation that could potentially net the state billions in long-term savings, while paying owed pensioners.
“Many of those nearing retirement may be attracted to having more control over their retirement assets,” Rep. Batinick said, “Yet unfortunately the State does not provide a versatile and competitive alternative to the current pension arrangement. Providing a lump sum payment in exchange for all or a portion of an annuity would provide a voluntary, constitutional approach to addressing the State's pension obligations, while simultaneously providing participants the options and flexibility needed when planning for retirement.”
In their May ruling declaring the pension reform bill signed into law by then-Governor Pat Quinn in December 2013 unconstitutional, the Illinois Supreme Court laid a framework for the adjustment of benefits through a legal approach called “consideration,” which allows for the adjustment of benefits if both parties agree to the changes. Rep. Batinick’s proposal to offer annuitants a lump sum option would meet this requirement by making any proposed buyout program voluntary.
Underscoring the need for bipartisan action on pension reform, the Commission on Government Forecasting and Accountability (COGFA), has calculated the total unfunded pension liabilities of the State retirement systems at $111.2 billion as of June 30, 2014, based upon the actuarial value of assets.
Rep. Batinick has filed the legislation and collected bipartisan support from Representatives Morrison, Jesiel, Sente, and Wehrli, all of whom oversee the Pensions Committee. Representatives Martwick, David Harris, Franks, McDermed, and Andersson have also added their support.