State Pension Developments

Our retired colleague and former Chapter Chair, Mike Ruggeri sent out another email this week to his list-serv from a few years ago, which not everyone is on, in the hopes of drawing everyone’s attention to an interesting development down in Springfield.

According to this article, House Speaker, Mike Madigan has signaled his potential openness to changing the pension rules for CURRENT public employees (and not just the future ones, crossing a sort of line that was heretofore uncrossed. Here’s the article:

Last April, the Democratic-led Legislature and Gov. Quinn raised retirement ages and lessened benefits in a major pension-giveback package that pertained only to new state hires. It was estimated the move would save the state $220 billion in future pension outlays.

Since then, with the state’s five pension systems underfunded by more than $85 billion, statehouse Democrats have faced calls for deeper pension cuts from Republicans and business leaders who want to freeze existing pension benefits for existing state workers and transition them into an all-401(k)-type retirement program like many companies offer.

“You’ve already changed it going forward,” Madigan said of the pension changes for new hires. “But now we are working on bills that would change it midstream. A state worker would be told, ‘All right, you have a state benefit package up to today. Starting tomorrow, it’s going to be a different deal.’”

The comments may have been a sort of weather balloon to turn up the heat on anyone even thinking of supporting such changes, or they may have been a warning flare of sorts that change is coming to the state employee unions. I’m not sure, but a day or two later, this article followed, suggesting that the state constitution would have to change before any such thing could occur.

Senate President John Cullerton (D-Chicago) told reporters a day after Madigan’s comments that tinkering with the taxpayer-funded pensions awaiting nearly 279,000 active state workers, teachers, judges, lawmakers and university employees likely would lose if challenged in court.

“I think the public should know, and anybody who thinks that’s a solution to the problem, that it clearly is unconstitutional, and it won’t be available to us to solve our pension problems,” Cullerton said.

Regardless it is a development to watch in the Spring session.

h/t to Mike Ruggeri

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