March 26, 2024

Tier 2: Your questions answered

Q: Which Illinois public sector pension funds have two tiers of benefits?

A: All of them! SERS, SURS, TRS, IMRF, Cook County, City of Chicago (actually has three), and all police and firefighter funds.

Q: Why are lawmakers so reluctant to address the injustice of these two-tiered pension systems?

A: State and local government lawmakers have severely underfunded major pension funds for decades as a strategy to balance their budgets without raising any new revenues, leading to high debt among those funds.

Q: How do I know if I have a Tier 2 pension?

A: If you were hired by any state or local government agency on or after Jan. 1, 2011, you are on a Tier 2 pension. This was the effective date of the law that was rammed through the General Assembly over fierce opposition from AFSCME and other unions in 2010.

Most people with a Tier 2 pension will have to work seven years longer than those with a Tier 1 pension to collect an unreduced benefit, even though employees in both tiers contribute the same amount from every paycheck. The final average salary calculation used to determine the dollar amount of pension benefits is also lower for Tier 2 participants.

Q: I have a Tier 1 pension. Why does this affect me?

A: Tier 2 inequity affects everyone, even those on Tier 1. Tier 2 exacerbates the staffing crisis; the later retirement age and comparably worse benefit dissuade new hires from staying in public service jobs until retirement. That results in staffing shortages that can make many workplaces—prisons, jails and mental health and developmental centers, and other high-risk environments—much less safe. The voices of Tier 1 employees will be essential to shining a light on the inequity of Tier 2. No matter what tier pension you have, we’re all AFSCME members—and we must fight together if we are going to prevail.

Q: How can we move lawmakers to make Tier 2 fairer?

A: If AFSCME members throughout the state join with members of other public sector unions to voice our concerns about the inadequacy of Tier 2 retirement benefits, we will be impossible to ignore. To do so we must remain united, determined and willing to take strong action. In the coming months there will be many ways AFSCME members will need to get involved, including calling and emailing their legislators directly.

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