Illinois Senate passes small teacher pension reform proposal

SPRINGFIELD, Ill., March 20 Wed Mar 20, 2013 8:06pm EDT

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SPRINGFIELD, Ill., March 20 (Reuters) - The Illinois Senate passed another small piece of pension reform on Wednesday with a measure aimed at squeezing savings from a retirement fund for teachers.

The measure, sponsored by Senate President John Cullerton, a Democrat, passed with a majority of 30 votes in favor and 22 against. A number of lawmakers did not vote.

The bill, which now heads to the Democrat-controlled House, only affects the state's biggest fund - Teachers' Retirement System. It requires local school employees to choose between the current annual 3 percent compounded cost-of-living adjustment for pensions when they retire or a reduced COLA and continued access to state-sponsored health care in retirement.

Cullerton said the state would save $4.7 billion immediately and $18 billion over the next 30 years with the bill's enactment.

"Thirty votes on this bill will begin to put the systems on a more favorable track. Thirty votes will immediately impact our state's credit rating," he said on the Senate floor before the vote.

Illinois' credit ratings have been downgraded to the lowest levels among states as solutions to its $96.8 billion unfunded pension liability have remained elusive. The worst-funded state pension system is also devouring more annual revenue, leading to funding cuts for core state services such as education, health care and public safety.

Public labor unions have warned they will use strong protections for pension benefits in the Illinois Constitution to fight changes.

A state judge on Tuesday ruled that health care for retired state workers does not have those same protections.

In response to that ruling, the Senate president said the idea of offering workers a choice is the best method for enacting pension reform that will hold up to constitutional muster.

Cullerton's bill applied only to the teachers fund, which is one of five major state pension funds. After the vote he released a statement that said he will "continue to advocate for a more comprehensive package that addresses state employees, university employees and the General Assembly retirement systems." A fifth fund is for judges.

A more comprehensive proposal to reform pensions that supporters said could save Illinois as much as $160 billion over 30 years failed in the Senate by a vote of 23 for and 30 against on Wednesday. That bill would limit COLAs, increase employee pension contributions, raise retirement ages and cap pensionable salaries.

Last week, the House passed two smaller measures, increasing retirement ages for certain workers and capping pensionable salaries that would only save the state $1 billion over 30 years.

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Comments (2)
SixthRomeo wrote:
Want pension reform? Just don’t let people like Robert “Big Bob” Kjellander have their fingers in that pie.

Mar 26, 2013 9:42am EDT  --  Report as abuse
Darby4618fa wrote:
Bribing judges is illegal. The judges understand the importance of the idea of precedents. Breaking your oath of office is illegal. Violating the Illinois constitution is illegal. Violating the United States constitution is illegal. Stealing money from pension funds is illegal. There is a contract that has been in existence regarding pensions for many years. The past and present people in the Illinois legislature are considering becoming a party to all of the aforementioned illegal actions. They think they are above the law. If the Illinois Supreme Court becomes a party to these illegal actions then the United States Supreme Court needs to protect its citizens from an illegal and corrupt system of state government.

Mar 27, 2013 12:43pm EDT  --  Report as abuse
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