Sangamon County Court Judge John Belz wrote a six-page ruling saying that Illinois cannot break its promise to the state's employees by diminishing or impairing pension benefits. At issue is whether the state can curb cost-of-living increases to current and future retirees, as well as increase the retirement ages for current workers and limit the salary used in the pension formula. Now, the pension reform law heads to the state's Supreme Court. What does this ruling mean for retirees and the future of pension reform? Eddie Arruza takes a closer look with Anders Lindall of AFSCME Council 31, and Laurence Msall, president of The Civic Federation.
In his ruling, Belz said the pension reform law is unconstitutional and void in its entirety.
The Pension Protection Clause of the Illinois Constitution states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency of instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” This constitutional language is “plain” and “unambiguous,” and therefore, the Pension Protection Clause is “given effect without resort to other aids for construction.” Kanerva v. Weems…Under the Pension Protection Clause, “it is clear if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired.” The Illinois legislature could not have been more clear that any attempt to diminish or impair pension rights is unconstitutional.
According to the Illinois Commission on Government Forecasting and Accountability, the total unfunded liabilities of the state retirement systems total $104.6 billion based upon the market value of assets on June 30. View a graph of the unfunded liability for each of the state’s five retirement systems. Click on the dots to find out the unfunded liability of each system.
View a chart of the funding projections for all five state retirement systems from 2015-2045. The projections are based on the respective retirement system’s FY 2014 actuarial variations.
View a timeline of the pension reform law.