Tier 2 Legislation Passes Key House Committee

(via We Are One Illinois)

For years, public sector unions have sounded the alarm about the fundamental unfairness and insufficiency of the Tier 2 pension system. We have also raised serious concerns about the long term financial health of the pension systems. Today, state lawmakers took the first step toward beginning to address these concerns by passing SB1937 out of the House Executive Committee. This is a critically important bill to help ensure we can recruit and retain the public employees necessary to provide high quality services to Illinoisans statewide.

This legislation is the result of years of study, discussion, and negotiation with state lawmakers, the governor’s office, and interested parties. It makes important improvements to benefits for Tier 2 public employees who provide the same vital services as their Tier 1 colleagues while receiving a diminished pension that does not provide an adequate retirement.

SB1937 makes a number of improvements to the Tier 2 system, most notably:

• Improves the final average salary calculation to the average of the highest 6 of an employee’s final 10 years on the job.

• Lowers the retirement age to age 62 if the employee has maxed out their pension, 65 with 20 years of service, or 67 with 10 years of service.

• Improves the cost of living adjustment to 3% simple interest per year.

Plus, SB1937 incorporates Gov. Pritzker’s pension funding ramp reforms and taps into expiring bond funding to ensure our promises to state employees are kept in a fiscally responsible, credit neutral manner. The bill also addresses the so-called ‘safe harbor’ issue.

After months of discussions, we know that to gain final passage from state legislators, this Tier 2 fix cannot damage the state’s short term or long term financial position. This bill accomplishes that goal while making significant strides forward in improving Tier 2 pension benefits.

Throughout this process, public employees have made their voices heard through more than 100,000 calls and emails in the past year. This issue must be addressed, and it is not going away. When a public employee works hard for their whole career, we should ensure they can pay their bills in retirement.

We applaud lawmakers for making important progress during the veto session, and we urge them to finish the job and pass this bill through the General Assembly during the 2026 Spring session.