Nuts & bolts of pension proposal

Published 12/04 2013 10:25AM

Updated 12/04 2013 10:29AM

ILLINOIS -- A lot of state workers say benefits in the new pension proposal are small compared to what they're being asked to give up. They say the bill is unconstitutional, still, state lawmakers are sticking by it.

A lot of state employees might have to take a second look at their financial future with this law. It makes some changes to their payouts down the road.

First is the cost-of-living increase. Current, state workers get a 3%-compounded increase on their entire pension each year.

This bill changes that. The new yearly increase will depend on your years of service; multiply those years by $1,000 and multiply that by 3%. If your head is still spinning with all those numbers, here's an example. A worker with ten years of service will get a $300 bump each year. Current employees will also miss their cost-of-living increases up to five times after they retire.

Another big change is the retirement age. If you're 46 or older, you have nothing to worry about. Otherwise, you add four months for each year you are under 46.

Say, for example, you're 40. That would add two years to your retirement age. The most you'll be forced to add is five years.

In exchange, current employees will pay less out of their paychecks. Part of the reason the state is in this mess is because state leaders chose to skip payments for years.

The new law won't allow them to do that. In fact, it gives pension systems the power to sue if the state tries to do that.

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