According to a news release, although it is anticipated that any pension code overhaul affecting member benefits and signed into law would be challenged in court, TRS officials said it would be irresponsible to not develop plans for the administration of all potential changes.
“Several proposals are pending in the General Assembly that would greatly affect every one of our 366,000 members and we need to be ready to help them with this important transition should it occur in the future,” said TRS Executive Director Dick Ingram. “We would need to enhance and expand our operations and procedures in several departments, especially Member Services, Employer Services and Information Technology.”This is particularly true for one proposal before the legislature that would require all TRS members to choose between two options that would affect the future of their benefits and their eligibility for state-supported health insurance in retirement. The legislation in question requires TRS to reach out to all members to inform them of the decision they must make.
“We don’t have the staff or the equipment or the processes in place right now to be able to effectively administer an election of this kind; or to help guide our members through this decision,” Ingram said. “It will take at least one year to gear up for something like that. It is not a matter of simply providing our members with an online calculator and telling them to figure out their future benefits by themselves. There are too many unknowns that our members would have to assume. This would be a drastic, life-changing decision for many of our members, especially the elderly who are retired and have only their TRS pension to support them.”
In addition to the contingency plans, TRS will attempt to identify other areas of existing state law that may fall into conflict with the pending reform proposals. For instance, all members—active teachers, benefit recipients and inactive educators—would be required to make a choice. But the benefit changes in the law only affect “retirement” benefits; not “disability” or “survivor” benefits, which are found in separate sections of state law and have different operating procedures.
“Right now, under one proposal a minor child receiving a survivor benefit from a deceased TRS member would have to select a choice between two options that are inappropriate for their circumstances,” Ingram added. “We would have to get that kind of inconsistency resolved.”Illinois’ public pension system has been labeled the worst in the country, with a 43% funded ratio (see “Wisconsin Tops Morningstar State Pension Analysis”).