Illinois Legislature Passes Sweeping Pension Changes

Unions oppose the plan

Thursday, Mar 25, 2010  |  Updated 7:15 AM CDT
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A bipartisan Illinois General Assembly handed Gov. Pat Quinn a victory Wednesday, sending him an overhauled state pension system, cutting benefits for new city and state employees to save money for woefully underfunded retirement systems.

The measure requires future workers to work until age 67 to get full retirement benefits, sets a maximum salary on which pensions may be calculated and limits annual increases in payments. There would be no change in benefits for current employees.

With a 92-17 House vote and a Senate tally of 48-6, the action reflected rare agreement between House Democrats and minority Republicans, who have sparred for years over what has become an $11 billion deficit, who is responsible and how to fix it.

It's a political and strategic triumph for Democrat Quinn, who unsuccessfully pursued such a two-tiered pension program last year to reduce the amount of money the state must contribute to retirement systems while it wrestles with a budget deficit.

A statement from Quinn praised the effort to "stabilize the system, protect current state employees and provide attractive pension benefits to future state workers."

Unions oppose the plan. Henry Bayer, executive director of the American Federation of State, County and Municipal Employees, which represents 70,000 government and 25,000 retirees statewide, said on average, pensioners earn $20,000 a year.

Will Lovett, a lobbyist for the Illinois Education Association, said surrounding states have much better retirement plans for their teachers, so making future Illinois educators work until age 67 will drive good teachers from the state.

Opponents argued there was little time to review the legislation, which surfaced Tuesday. But Senate Republican Leader Christine Radogno of Lemont, who introduced similar legislation earlier this month, said the idea has been discussed for years.

And quick action will give lenders more confidence in the state's fiscal picture as Illinois prepares to borrow more than $1.3 billion for Medicaid services, school construction and transportation projects in April, according to administration officials.

Republicans who opposed the plan argued the measure wrongly allows the Chicago Public School pension system to skip more than $1 billion in payments during the next three years to provide money for classrooms.

"The most important thing you could do in pension reform is you have to make the payments," said Rep. Bill Black, R-Danville. "You can't skip payments. That's what got our public pension systems into this mess."

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