A coalition of unions rallies in Springfield on Wednesday, Nov. 13, 2024. (We Are One Illinois / Facebook)

Rachel Overstreet became a social service caseworker under the Cook County chief judge’s office because she’s passionate about the work.

She became a licensed social worker because she wants to be a change agent, she said.

But after coming from the private sector, where she paid into a 401(k), she was also interested in the benefits package that came with a public job.

“I felt like, coming over to the county, or a government agency, ‘Hey, I’ll get a pension, and I’ll be able to have security and retire without stress,’” she told WTTW News, as she traveled home from a Wednesday rally at the state capitol in Springfield. Hundreds of union members called for lawmakers to beef up their retirement benefits.

Overstreet said after becoming a union steward — she’s now vice president of the local 3696 chapter of AFSCME — she began to question her thinking that a pension would provide enough security later in life.

January will be her five-year work anniversary, which means she’s in the second tier of pension benefits offered to Illinois public employees.

Illinois public workers — that includes state employees, university professors, schoolteachers, judges and legislators — who began their positions before 2011 are in Tier 1, which offers better benefits. 

Those hired after Jan. 1, 2011, are in Tier 2. They have to work longer and upon retirement receive a smaller payout.

Overstreet said it left her wondering whether colleagues were getting a better deal for putting in the same work.

“We all do the same job at the end of the day,” Overstreet said. “I’m doing the same job as my counterpart that might be receiving Tier 1 benefits, and I might not get those same options.”

Illinois legislators created Tier 2 to help address a severe shortfall in funding of the state’s retirement system, due in large part to the state not keeping up with payments to keep the funds flush.

The Illinois Commission on Government Forecasting and Accountability’s last report on the fiscal condition of the state’s pension systems, published last December, pegged the unfunded liability at a whopping $140 billion.

Illinois in 2013 tried to reduce benefits for Tier 1 employees, but in 2015 the state Supreme Court ruled the law illegal because of a clause in the state constitution that requires benefits not be diminished or impaired.

But the Tier 2 law doesn’t breech that clause, given that it’s what the employees were offered at the start of their government work.

Increasingly, though, there’s belief that perhaps the state went too far in reducing benefits under Tier 2, putting Illinois in jeopardy of breaking federal law.

Most of Illinois’ public employees are not eligible for Social Security; they receive pensions instead.

Public sector unions argue that Illinois is in danger of breaching a “safe harbor” provision triggered if benefits fall below what Social Security would pay.

Unions, under the umbrella We Are One Illinois coalition, rallied under the Capitol rotunda Wednesday to press lawmakers to fix the discrepancy.

We Are One Illinois backs language in newly introduced legislation (House Bill 5909 / Senate Bill 3988) that’s sponsored by state Rep. Stephanie Kifowit (D-Aurora) and state Sen. Rob Martwick (D-Chicago).

The union-backed bills address the “safe harbor” issue. They also lower the minimum retirement age and increase the annual benefits Tier 2 retirees will receive, up to 3% per year.

The measures would largely bring Tier 2 employees on par with those in Tier 1, though not completely: Tier 1 employees are eligible for compounding annual pension increases. While the legislation proposes giving Tier 2 members a greater annual increase upon retirement, it would be 3% fixed — not compounded.

Kifowit has sponsored various other Tier 2 “fixes.”

She plans a subject-matter hearing on the latest proposal next week, likely Wednesday.

Kifowit didn’t commit to advancing the unions’ Fair Retirement and Recruitment Act, nor did she reject it.

“All proposals have merit,” Kifowit said, “and part of our job as a pension committee is to go through all proposals. Our goal is to have a bill that’s fiscally responsible for the state of Illinois, and respectful and dignified for the retirement security of the employes of the state of Illinois.”

She said improving the Tier 2 benefits isn’t just about correcting a potential safe harbor breach — it’s also a matter of improving recruiting and retention of the government workforce.

“It is very hard to attract and retain individuals in the state systems,” Kifowit said. “So what we heard a lot in committee is that employees are leaving, and sometimes … leaving the teaching profession” because young teachers don’t want to have to work until they’re 67 to qualify for a full pension.

“We are losing, losing people because of that,” Kifowit said. “And if you look at models, even in the corporate sector, when they couldn’t get employees, they had to increase benefits.”

But she said whatever approach the state takes will also have to take cost into consideration.

Even without a benefit bump for Tier 2 workers, the governor’s office is forecasting a $3 billion deficit for the 2026 fiscal year.

Illinois put $10.1 billion into its pension systems in the current budget, accounting for nearly 19% of general fund spending.

Gov. J.B. Pritzker has talked about enhancing Tier 2 pensions, though in response to questions from reporters in Springfield on Wednesday, he indicated he’s in no hurry. He said first, there needs to be a proper and whole accounting of what would meet the safe harbor threshold.

“The fact is that what we need to do is make sure that we’re meeting the Social Security safe harbor minimum, right?” Pritzker said. “So that’s something that hasn’t been fully calculated. That’s something … that would be paid over time. So it’s not something that, you know, needs to get done exactly in the next session. But it’s clear that it needs to be dealt with, because otherwise you’ve created a whole other liability for the state.”

Pressure from politically powerful unions could hasten the timeline, but Illinois lawmakers are facing myriad other budget demands going into a tight fiscal year.

Contact Amanda Vinicky: @AmandaVinicky | [email protected]