The new law will cut state workers' and public school teachers' retirement benefits. It also raises the retirement age; employees younger than 46 will have to work up to five years longer before they can retire. The savings from those changes are intended to rid Illinois of a long-festering budget issue: an unfunded pension liability that's grown to about $100 billion.
On Tuesday, after the General Assembly narrowly approved the measure during a special, one-day session, Gov. Pat Quinn said the measure will "move our state forward. We have many things to do, but we had to do this."
The weight of Illinois' pension debt has meant there's less money for schools, healthcare and other public services.
Although the pension package is now officially law, it doesn't take effect until June. And maybe not even then.
Unions representing public workers say their attorneys are preparing a lawsuit. In a statement, the unions' We are One coalition calls the law attempted pension theft that defies the state constitution.
With Illinois’ pension overhaul now law, University of Illinois leaders will proceed with options to supplement for a possible loss in retirement funds. Some faculty members are discussing a plan in which the U of I matches employee contributions.
President Robert Easter says options for filling that gap will be discussed by the university trustees at their January meeting and one would be chosen before pension reform takes effect in June. He says many peer institutions in the Midwest, both public and private offer a similar program.
EASTER: "Most of them have social security as a base, and then they have some sort of supplement defined contribution plan on top of that as an adjunct to social security. We will see what works for us, and make some recommendations for the board, but ultimately it would be their decision.”
Easter says the challenge is determining cost, and that starts with understanding the impacts of pension changes on each employee at every salary level. But he adds it’s premature to speculate with the expected court challenge.