SPRINGFIELD – Efforts are underway to consolidate four lawsuits challenging Illinois’ new pension reform law, a move that could ultimately impact how the Legislature chooses to act on other underfunded municipal retirement systems around the state.
In recent weeks, lawyers for the four groups of state retirees who filed class-action lawsuits have asked the state Supreme Court to allow them to present their cases as one. Their motions follow a January request by the Illinois attorney general to consolidate the cases for the purposes of “just and efficient conduct.”
All four lawsuits share the common claim that the pension reform plan, passed in December, violates the state constitution, which says benefits may “not be diminished or impaired.” Because three of the cases were filed in Sangamon County Court and another in Cook County Circuit Court, the Illinois Supreme Court must choose a court in which to hear the case if the consolidation motion is granted.
John Myers, a Springfield-based attorney who represents the Retired State Employees Association in its lawsuit filed in January, told The Associated Press he feels there could be less of a bottleneck if the cases are consolidated in central Illinois’ Sangamon County versus the more populous Cook County.
“The Sangamon County Courts typically are quicker than Cook County. That’s the way it is,” Myers said.
While Myers said there isn’t a strategic advantage to consolidating the cases, he noted “consolidation does simplify things procedurally and avoids the risk of conflicting court decisions.”
The Legislature passed a measure to fix the worst-in-the-nation pension crisis during a special session at the end of 2013. The state’s five public-retirement systems were $100 billion short of what was needed to meet the state’s obligations to workers and retirees at that time due to decades of lawmakers skipping or shorting payments to the systems, which siphoned away money from schools and social services.
The plan’s supporters said it will reduce the unfunded liability by about more than $20 billion and fully fund the pension systems by 2044. Gov. Pat Quinn’s office last month estimated the plan will save the state about $145 billion over the next three decades.
Under the plan, annual cost-of-living increases for retirees will be reduced and the retirement age for workers 45 and younger goes up, giving some workers the option of freezing their pension and participating in a 401(k)-style contribution plan.
It also puts some savings back into the pension funds and directs money from pension bond payments to the retirement systems after those bonds are paid off in 2019.
Lawmakers included two components they say were intended to improve the plan’s odds of surviving a legal challenge: a 1 percent decrease in employee contributions and a funding guarantee, which allows the systems to sue the state if lawmakers don’t pay those pension accounts.
Senate President John Cullerton described the legislation as an important test case for the courts, which could also guide the Legislature as it considers other pension reform measures this spring for the city of Chicago and municipalities around the state. It’s unknown, however, how long it could take the courts to rule on the issue.