Illinois Being Sued Again Over Pension Law

Jan 28, 2014

Illinois labor unions have filed another lawsuit seeking to have the state's pension overhaul declared unconstitutional.

The We Are One Illinois Coalition of public employee unions filed the lawsuit Tuesday in Sangamon County Circuit court.  
The legal challenge comes weeks after Governor Pat Quinn signed the measure into law.

Unions say the law violates the state constitution, which says benefits may not be diminished. Several other lawsuits have been filed on behalf of retirees.  
Supporters of the plan believe the court will uphold it, because they it's necessary to repair the state's finances.

Questions about savings

Meanwhile, new estimates from Illinois' pension systems say the overhaul will save less than anticipated. The law raises the retirement age, reduces cost-of-living increases and otherwise limits the size of a state employee's pension. In December, supporters said those changes would save Illinois 160 billion dollars. But that estimate was based on old numbers. New figures from the pension funds show the savings is 15 billion dollars less.

Republican Representative David McSweeney, of Barrington Hills, says that's a lot of money.

"The numbers rely on accounting gimmicks, backloaded savings and their own numbers now have already been proven incorrect ... I believe that we need to focus on passing a real pension reform bill," McSweeney said.

But backers of existing law say the smaller savings number can actually be viewed as a good sign. Better-than-expected investment returns mean Illinois owes less to the pension systems, and consequently the savings decrease, too.