Thursday, June 13, 2019

Amendment to Illinois Pension Code Now Includes Credit for Furloughed Cook County Employees

On June 7, Governor Pritzker signed into law a bill amending the Cook County Article of the Illinois Pension Code regarding the furloughs and salary reductions for employees employed by Cook County. Public Act 101-0011 (40 ILCS 5/9-179.4), which comes under Article 9. County Employees’ and Officers’ Annuity Benefit Fund-Counties Over 3,000,000 Inhabitants of the Illinois Pension Code, helps participating county employees establish service credit and earnings for periods of furlough or salary reduction between December 1, 2017 to November 30, 2018. Normally, employees who are on furlough, including unpaid suspension, for more than a full pay period suffer a loss of service credit.

To qualify, a county employee must apply in writing to the Fund before December 31, 2019. The employee must also demonstrate they did not receive any other form of compensation from the County during the period listed above; make after-tax contributions to the Fund based on their salary during the periods of furlough, plus an amount determined by the Board to be equal to the County’s normal cost of the benefit and compounded interest on the actuarily-assumed rate from the date of furlough to the time of payment; and pay the contributions required under Section 9 of the Illinois Pension Code to the County, actively participate in the Fund for at least 12-months after filing the application, and state the total number of furlough days the employee was required to take. Similarly, if an employee received a salary reduction, they must also meet the same requirements, but list the salary reduction for the total number of pay periods.

Members of the Illinois General Assembly likely passed this bill to assist County employees forced to cope with Cook County’s $200 million budget shortfall for the 2018 fiscal year. In the aftermath of the repeal of the 2017 Sweetened Beverage Tax, the county immediately engaged in austerity-like cuts to essential county services. Cuts included mandatory furloughs for many county employees-specifically, employees of the circuit court. The Cook County Pension Fund states that employees taking 10 furlough days of less will not be impacted. However, furlough days within four years of retirement can minimally impact an employee’s Final Average Salary.