How much will pension fix save Illinois?

Jan 27, 2014

Illinois' new pension law is under scrutiny on multiple levels. There are several lawsuits from people facing reduced retirement benefits … and now there's question over just how much money it will save. 

Detractors of Illinois' new pension law, like Republican Rep. David McSweeney, are saying "I told you so."

"We're in a situation that they passed the most important piece of legislation that we'll vote on probably in my career, and now we're seeing the numbers are incorrect." 

Figures from the pension systems show that it will save the state $15 billion less than the $160 promised when it passed, back in December. McSweeney, an investment banker from Barrington Hills, says it shows the law relies on accounting gimmicks to inflate its savings. But one of the law's key supporters, Rep. Elaine Nekritz, a Democrat from Northbrook, reads it differently.

"It really is, in face, very good news, that we're on the --as of this report -- that taxpayers are on the hook for less, but that also results in less savings."

Translation: because of improved investment returns, Illinois’ pension debt has gotten smaller. But that also means the potential for savings has shrunk, too.