Labor Leaders Cry Foul, Threaten Litigation as Illinois’ Underfunded Pension 'Rescue Plan' Develops

Legislative leaders in Illinois are hoping to push a “rescue plan” that would help the state right its public pension system funding wrongs. Vehemently opposed by labor leaders who have labeled it “catastrophic,” the plan would cut cost-of-living increases for retirees, raise the retirement age for younger employees and set a cap on the pensions of public employees with the highest salaries. The plan would also place most pension plans outside the realm of collective bargaining.  

Plan proponents suggest it could save the state $160 billion over 30 years. This, of course, at the expense of retirees.  

With a likely showdown in Springfield on the horizon, representatives on both sides of the issue are making their voices heard. Daniel J. Montgomery, president of the Illinois Federation of Teachers, recently told the New York Times:

“This is a grotesque taking of employees’ retirement security that seems both patently illegal and unfair.  It’s a sharp jab in the eye — and the heart — of public employees. There’s a lot of anger out there.”

The system is currently underfunded by over $100 billion. A report from PEW Charitable Trusts shows 20 cents of each taxpayer dollar currently goes to funding the current pension system.  

Labor leaders argue that the current deal is in no way a compromise. We Are One Illinois says the plan is a repackaged SB1 and argues that it is unconstitutional and illegally cut benefits from workers while being curated in secret without public comment. In May, the Illinois legislature overwhelmingly rejected SB 1 in a bipartisan vote.

Because of looming primary elections there is a chance some Democrats may feel pressured to support the proposed plan although it would hurt union workers across the state.

Senate Republican leader Christine Radogno said: “I really believe that it has become more of a political liability not to solve this than it is to solve it.”

If the measure does pass through legislature, labor organizations have pledged to keep the fight alive. AFSCME’s Anders Lindall told the New York Times, ”If we’re not successful in stopping this train, then our next step is litigation.”

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