Clock Is Ticking on Illinois Pension Reform

By:  Bob Adelmann
Clock Is Ticking on Illinois Pension Reform

Two bills designed to reform the state's dreadfully underfunded pension obligations have just passed the Illinois legislature. Neither will do much, if anything, about those obligations, thanks to union influence.

Two competing bills for pension reform have just passed the Illinois legislature, with hopes that one of them will be passed before the legislature adjourns for the summer on May 31. One of them has the blessing of the teachers’ union and Democrat John Cullerton, president of the state senate. The other passed the House, and neither addresses the issue of Illinois’ huge pension liabilities frontally.

Sandi Weingarten, president of the American Federation of Teachers (AFT), called the senate bill “smart and fair” and based on union members’ willingness to “accept cuts in their retirement benefits to ensure long-term stability of the state’s pension system,” and said it was a “compromise.”

The AFT represents a million members in the teaching profession, as well as nursing and healthcare workers and federal, state, and local government employees. The AFT agreed not to sue the state if Cullerton’s bill is passed into law.

The competing bill passed by the House — informally called the Madigan Bill, named for House Speaker Michael Madigan, also a Democrat — makes deeper cuts in benefits than the unions want. The Madigan Bill appears to have the support of Governor Pat Quinn, another Democrat, who is caught in the middle. He has made pension reform his number one priority but he faces reelection next year and needs union support.

Details of the Senate/Cullerton bill reveal very slight reductions in benefits, involving pensioners’ choices between a cost-of-living adjustment (COLA) of 3 percent a year that is compounded annually, or not. If the compounded COLA option is selected, then health insurance will not be provided. And vice versa. If a pensioner wants both a COLA that is compounded annually and health insurance in retirement, then his contribution to the plan increases slightly.

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