In passing a landmark statute, Illinois lawmakers voted Tuesday to trim the cost-of-living adjustment for retirees in the state’s pension system, increase the retirement age for younger workers, decrease their contribution to the pension system by 1 percent, and contribute more money from the state itself, the New York Times reports.
The legislation also offers retirees the opportunity to leave the pension system and invest in a 401(k) plan.
Many Democrats and union leaders opposed the compromise deal struck through some emotional and fiery debate before the vote was called, saying it shifts too much burden onto workers who decided to work in Illinois and contribute to the pension system because of the benefits that were promised. Some Republican lawmakers also opposed the statute on the basis that it would not save the state enough money.
The preamble to the bill was somewhat depressing, the Chicago Tribune editorializes. The state has one of the most troubled pension system in the nation, some $100 billion in arrears, and other systems and states have been watching the pension reform in Illinois unfold.
Some people claim the law, provided Gov Pat Quinn signs it, as he is expected to do today, is unconstitutional in that it cuts benefits negotiated in collective bargaining agreements between the state and the unions. Other legal experts think the law will hold up in court, though. We’ll have to wait and see.
From the Tribune’s editorial board:
[The law] had to change the cost structure [of the cost-of-living adjustment]. State employees and teachers and retired workers are being told by their union leaders that this is a disaster for them. But because of this legislation, those workers and retirees have more certainty today that there will be a pension for them tomorrow.
