Business Insurance reports that the bill provides for future employees to be put into new defined contribution plans, while another bill proposed by Brady would allow current employee to switch from their DB plans to new DC plans. Funding for the plans would come from a combination of contributions from state employers and participants, and assets would be overseen by the $32 billion Illinois Teachers’ Retirement System and the $9.4 billion Illinois State Board of Investment which now has oversight of the Illinois State Employees’ Retirement System, the Illinois Judges’ Retirement System, and the Illinois General Assembly Retirement System.
Illinois State Universities Retirement System would place new employees in its existing $649 million 401(a) plan, under the proposal. Participants now have a choice between that DC plan and SURS’ $12.56 billion defined benefit plan, the news report said.
Meanwhile, a bill introduced by state Representative Mike Fortner would direct contributions applied to new state employees’ annual pay over $106,000 to new DC plans administered by the existing state systems, while the amount of pay below that level for new workers would continue to apply to the state’s existing defined benefit plans. A provision of Fortner’s bill would bar all new state employees who work under contracts and all new politically appointed employees from participating in the state defined benefit systems and place them into the new defined contribution plans.Fortner said he opposes the Brady bills because under them the existing state defined benefit plans would lose all contributions from new employees, which “could cause assets to get dangerously low … and put them in jeopardy,” according to Business Insurance.