Illinois' Pension Crisis Continues With Court's Ruling

[Jesus Malverde]

The Illinois Supreme Court dealt a devastating blow to Illinois taxpayers Friday when it struck down a reform law aimed at taming the state’s $111 billion pension debt.

The 2013 law made modest changes to pension benefits for government workers. Under the plan, cost-of-living adjustments for retirees would grow at a slightly slower pace, younger employees would have to work longer and some workers would have faced a six-figure cap on the salary used to calculate their annual pension payments.

At best, this package of reforms would only reduce the state’s unfunded liability by about one-fifth—leaving plenty of challenges left to be tackled.

But last week, the state’s high court said even these limited changes ran afoul of the Illinois constitution because of a pension clause that says: “[m]embership in a pension or retirement system of the State … shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

http://www.forbes.com/sites/realspin/2015/05/12/illinois-pension-crisis-continues-with-courts-ruling/

[doxyluv13]

1. Are you effing kidding me?

This is a victory for the rule of law and the rights of working people. State workers negotiated lower current compensation for richer pension down the line. That's why the Illinois constitution protects pensions from politicians predations.

Plus, Illinois has no one but itself to blame for the fact it's pension system is unfunded. They have plenty of money for things state politicians want to spend it on. Like hundreds of millions of dollars to Caterpillar to stay in the state. BTW they got screwed on that deal Caterpillar is shifting 3 manufacturing lines from that plant overseas anyway.

[catnhatnh]

2. A "MODEST CHANGE" that would cost workers over $22 billion...

How about if everyone involved in drafting this law and defending it in court, in spite of the fact it would violate the state constitution, take a modest 20% cut in THEIR pay and benefits?

[MichMan]

3. What about Detroit

That is what they thought in Detroit too............ Bankruptcy court thought otherwise.

Kind of tough to raise taxes enough to make up for the shortfall in a city mired in poverty. Of course a corrupt and incompetent city government didn't help the situation.

[gratuitous]

4. Of course . . .

If the State of Illinois had lived up to its contract and funded its obligations all along, it wouldn't have to be looking for ways to chisel its public employee retirees now. Funny how Forbes magazine doesn't take that angle; I wonder why?