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Comment: Much more reporting and commentary will come on this detailed proposal released today by the Illinois Policy Inst.

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Andrew Szakmary
I have read the pension section, in which they propose a mandatory defined contribution plan for new employees that is modeled after the SURS self-managed plan. This plan would be voluntary for current employees, and they assume all tier 2 employees (and probably some younger tier 1 employees) will choose it over what they have now. However, all new SURS employees have had this option since 1998, and among those that have been hired since 2011 under tier 2 only 14-19%, depending on the year, have chosen it. So when the empirical evidence clearly and unequivocally shows that less than 20% of current tier 2 workers have… Read more »
Most SURS employees “choose” a defined benefit plan because it’s the default choice. If a new member fails to choose a plan within six months, they are automatically and permanently enrolled in the Traditional Benefit Package (read: pension). It probably doesn’t help that you have to chose an investment option for SMP too, creating more work that a typical twenty-ish person doesn’t want to make. I bet if the auto enrollment was “Self Managed Plan: Fidelity Freedom Index 2050 Fund” instead of the pension – requiring zero input from the employee – the uptake on SMP would be much higher. Don’t forget SURS covers a wide array… Read more »