Pensions... Legislation proposed in Springfield -- House Bill 3695-- will restore the pension tax levy ... The Chicago Teachers' Pension Fund on March 20 announced support for HB 3695, sponsored by State Rep. Marcus C. Evans, Jr., and Speaker Michael J. Madigan....
The Chicago Teachers Pension Fund (CTPF.org) has issued a press release saying that the fund supports HB 3695, which would restore the pension tax levy. The tax levy, which was abolished to provide more "flexibility" to Chicago's mayor in 1993, kept the Chicago Teachers Pension Fund, one of the oldest in the USA, at top levels for more than a century. Its abolition was the onset of the so-called "pension crisis" which is pre-occupying pundits and much of the public debate in 2015.
The next meetings of the trustees will be held on Thursday, April 23, 2015 and Thursday, May 21, 2015. All meetings are open to the public, begin at 9:30 a.m., and are held at the CTPF offices at 203 N. LaSalle St. in Chicago.
THE CTPF PRESS RELEASE OF MARCH 20, 2015 STATED:
CTPF announces Support for House Bill 3695
The Chicago Teachers' Pension Fund (CTPF) today announced its support for House Bill 3695. This legislation, written and sponsored by State Rep. Marcus C. Evans, Jr., (D-Chicago) and House Speaker Michael J. Madigan (D-Chicago) received bi-partisan support from several additional co-sponsors including Rep. David Harris (R-Mount Prospect), Rep. Anthony DeLuca (D-Chicago Heights), Rep. Joe Sosnowski (R-Rockford), Rep. Arthur Turner (D-Chicago), Rep. Christian L. Mitchell (D-Chicago), and Rep. Elgie R. Sims, Jr. (D-Chicago). The legislation reinstates the pension tax levy diverted from CTPF in 1995.
CTPF Executive Director Charles A. Burbridge delivered written testimony to the House Revenue and Finance Committee - Property Tax Subcommittee in support of this legislation. The bill moved out of the Subcommittee on a vote of 6-0 and passed the House Revenue and Finance Committee on a final vote of 13-0.
"Pensions provide the primary source of retirement security for Chicago's educators who do not contribute to Social Security during employment," said Burbridge. "We want to thank Speaker Madigan and Representatives Evans, Harris, DeLuca, Sosnowski, Turner, Mitchell, and Sims for sponsoring this bill and for their efforts on behalf of Chicago's active and retired educators. This bill takes a step toward stable funding for pensions, and sets the foundation for future financial stability for our members."
"I believe there is no profession more admirable than a teacher, particularly a Chicago teacher," said Evans. "Retired teachers deserve to know that steps are being taken to ensure that their pensions will be here for the long haul. That is why I made this legislation my top priority and was proud to work with my colleagues to take action on behalf of retired teachers. I look forward to HB 3695 becoming law."
Before 1995, CTPF received revenue directly from a tax levy. That year legislation diverted the CTPF tax levy into the CPS operating budget. CPS then took a pension "holiday," failing to make pension contributions from 1996 to 2005. As a result, CTPF lost $2 billion in revenue. An additional CPS pension "holiday" lasted from 2010 to 2013 and cost the fund another $1.2 billion. In total, CTPF has foregone more than $3.2 billion in funding, a primary reason the funded ratio has fallen from 100% to 51.5%.
The proposal establishes a specific tax levy for contributions to CTPF beginning in Fiscal Year 2016. The levy is equal to 0.26% of all taxable property within the Chicago Public Schools district, and would generate approximately $160 to $180 million in 2016. The CPS levy would be reduced from 3.07% to 2.81% and the 0.26% of tax levied each year will be deposited directly with CTPF.
The bill does not reduce CPS's obligation to fully fund pensions, but it will ensure a baseline for future funding.
"We want to reiterate our appreciation for this legislation, while continuing to stress the importance of fully funding CTPF pensions," said Burbridge. "This is a good first step."
ABOUT CTPF
Established by the Illinois state legislature in 1895, the Chicago Teachers' Pension Fund manages members' assets and administers benefits. The $10.9 billion pension fund serves approximately 63,000 active and retired educators, and provides pension and health insurance benefits to more than 27,700 beneficiaries.
