Bill Text: IL SR0317 | 2015-2016 | 99th General Assembly | Enrolled

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Bill Title: Urges the Teachers' Retirement System and the State Universities Retirement System to pursue an Internal Revenue Service ruling on the compliance of Tier 2 with safe harbor provisions under Section 3121(b)(7)(F) of the Internal Revenue Code of 1986.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Passed) 2015-05-31 - Resolution Adopted as Amended 037-018-001 [SR0317 Detail]

Download: Illinois-2015-SR0317-Enrolled.html

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SENATE RESOLUTION NO. 317
WHEREAS, Public Act 96-0889 was passed in 2010 and
established, among other provisions, a "Tier 2" pension plan;
and
WHEREAS, Public employees who began service on or after
January 1, 2011 are now enrolled in what is commonly referred
to as the "Tier 2" pension plan; and
WHEREAS, The Tier 2 pension plan dramatically reduced
benefits for these members of the Teachers' Retirement System
(TRS) and the State Universities Retirement System (SURS); and
WHEREAS, At the time of passage of this plan, it was
estimated that this change would result in $64 billion in
savings to State taxpayers; and
WHEREAS, Members of the Tier 2 pension plan in TRS and SURS
do not participate in Social Security, and many experts believe
that the Tier 2 pension plan does not provide benefits that are
at least comparable to those provided by the Old-Age portion of
the Social Security program; and
WHEREAS, Failure to provide benefits at least comparable to
Social Security for Tier 2 members who do not participate in

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Social Security could result in severe unforeseen consequences
for taxpayers in the State of Illinois; and
WHEREAS, Illinois taxpayers need to be advised of all the
implications regarding this change, especially the possible
impact on property taxes, higher education budgets, and school
funding; and
WHEREAS, The Governor has called for the mandatory
participation of current Tier 1 members in the Tier 2 plan
after an undetermined date; and
WHEREAS, It would be irresponsible to pursue such a drastic
change without a federal determination as to whether or not
Tier 2 participants in TRS and SURS receive benefits that are
in compliance with protections provided under the Internal
Revenue Code of 1986; and
WHEREAS, Such a change would harm thousands of working
families throughout Illinois and significantly impact our
universities' and schools' workforces; and
WHEREAS, It would be irresponsible for the State of
Illinois to enact such a drastic proposal without studying the
financial impact it would have on taxpayers and working
families; therefore, be it

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RESOLVED, BY THE SENATE OF THE NINETY-NINTH GENERAL
ASSEMBLY OF THE STATE OF ILLINOIS, that we urge TRS and SURS to
pursue an Internal Revenue Service ruling on the compliance of
Tier 2 with safe harbor provisions under Section 3121(b)(7)(F)
of the Internal Revenue Code of 1986; and be it further
RESOLVED, That TRS and SURS provide a detailed analysis on
the financial impact that the Governor's proposal would have on
the members of working families who are currently in the Tier 1
pension plan; and be it further
RESOLVED, That this report be completed prior to any
consideration of the Governor's proposal to move Tier 1
participants in TRS and SURS into Tier 2.