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Democrats float pension reform plan

Published: Tuesday, May 29, 2012 1:31 p.m. CDT • Updated: Tuesday, May 29, 2012 10:57 p.m. CDT
Caption
Illinois House Speaker Michael Madigan, D-Chicago (left), and Rep. Elaine Nekritz, D-Des Plaines, testify Tuesday during a House Personnel and Pensions Committee hearing in Springfield. (AP photo)

SPRINGFIELD – Illinois lawmakers took a small step on a big issue when House Democrats released their plan Tuesday to rein in state pension costs.

It would reduce pension benefits for government retirees and gradually require schools to take over retirement costs for their employees. Judges, however, would be exempted from the changes.

The pension plan passed in a House committee but was not called for a vote by the full chamber as critics howled at the idea of shifting retirement costs to schools.

House Minority Leader Tom Cross, R-Oswego, called it a "poison pill" that House Speaker Michael Madigan, D-Chicago, is using to derail progress toward cutting pension costs. "If you want to be for pension reform, take the shift out and let's move on," Cross said.

At the heart of Madigan's legislation is a stark choice for current employees and retirees.

One, choose between smaller cost-of-living increases and remain eligible for retiree health care. Or two, get larger COLAs but be ineligible for retiree health care. The changes are borne from an attempt to slow the ballooning cost of public pensions, which is increasing from $4.2 billion this year, to $5.1 billion next year. How much the state would save won't be known until employees and retirees choose an option.

Unions say the choices are unconstitutional, that they reduce benefits for current retirees, no matter what recipients decide. Reducing benefits for current retirees could violate Illinois' constitutional provision, calling pension benefits an unbreakable contract, unions say.

If the current changes to public pensions manage to squeak out of the General Assembly and get Gov. Pat Quinn's OK, the public unions would probably sue the state.

Judges receive the highest average annual pension of any public employee, yet their benefits would remain untouched, according to the legislation introduced by Madigan.

The nearly 1,000 retired judges earn an average annual pension of more than $112,000. The average public employee retiree draws an average annual pension of about $40,000.

Ultimately, the fate of the legislation would be decided by the justices of the Illinois Supreme Court, who, coincidentally, are members of the public pension Judges' Retirement System.

"I would call this buying off the judges. It's a very sad situation, but it's inevitable," said Ann Lousin, a professor at the John Marshall Law School in Chicago who helped draft the Illinois Constitution in 1970.

Madigan, D-Chicago, said judges were left out of the legislation to avoid a conflict of interest.

Madigan danced around questions of whether the omission of judges was a way to get a favorable ruling from the Illinois Supreme Court.

Leaving judges' pensions alone has some precedent. Judges were exempted when the state scaled back pension benefits in 2010 for new employees.

Cross said he would have liked to have seen judges' pensions included.

• Andrew Thomason of Illinois Statehouse News contributed to this report.

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