Illinois pension reform law is challenged

Retired teachers association files lawsuit

Published: Wednesday, Jan. 8, 2014 2:35 p.m. CDT • Updated: Wednesday, Jan. 8, 2014 2:37 p.m. CDT

CHICAGO — The Illinois Retired Teachers Association filed suit Dec. 27 challenging the constitutionality of the state’s controversial plan to deal with the nation’s most underfunded public employee pension system.

The lawsuit is the first of what could be many filed on behalf of state workers, university employees, lawmakers and teachers. The legal challenge argues the law, which limits cost-of-living increases, raises retirement ages for many current workers and caps the amount of salaries eligible for retirement benefits, violates the state Constitution. The suit was filed in Cook County Circuit Court on behalf of eight non-union retirees, teachers and superintendents who are members of the state’s Teacher Retirement System.

Representatives of the We Are One coalition of public employee unions, including the state’s two major teachers’ unions, have said they expect to file suit shortly.

“The law allows anyone to avail themselves of their legal rights, and We Are One Illinois plans to do the same at the appropriate time,” Director of Communications of the Illinois Federation of Teachers Aviva Brown said in a statement from the IFT’s Peru office. “The Illinois Federation of Teachers and our coalition partners are focused on preparing to bring the most effective case possible to defend the constitutional rights of our members and hundreds of thousands of other public employees and retirees throughout Illinois.”

A spokeswoman for Gov. Pat Quinn’s office said a lawsuit had been expected, but the administration “(expects) this landmark reform will be upheld as constitutional.”

“We believe the new law is as constitutionally sound as it is urgently needed to resolve the state’s pension crisis,” Quinn spokeswoman Brooke Anderson said in a statement.
“This historic law squarely addresses the most pressing fiscal crisis of our time by eliminating the state’s unfunded pension debt, a standard set by the governor two years ago. It will ensure retirement security for those who have faithfully contributed to the pension systems, end the squeeze on critical education and human services and support economic growth.”

At issue is a provision of the 1970 Illinois Constitution which states that public pensions represent “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” The new legislation scales back what had been annual 3 percent compounded cost-of-living increases to retirees into non-compounding yearly increases based on a formula that takes into account an employee’s years of service.

The measure also requires many current workers to skip up to five annual cost-of-living pension increases when they retire. For current workers, it also would boost the retirement age by up to five years, depending on their age.

Judicial pensions are not included in the new law, an effort to try to avoid a conflict of interest on the constitutional issue. Pensions for Chicago teachers are not part of the new law, since they are funded by city property taxpayers.

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