UPDATE 1-Illinois teachers sue in effort to block pension reform law

Fri Dec 27, 2013 6:25pm EST

CHICAGO Dec 27 (Reuters) - A group of teachers and public school officials filed a class-action lawsuit on Friday in state court seeking to void Illinois' new pension reform law on grounds the cuts to pension benefits violate the state constitution.

The lawsuit, filed in Cook County Circuit Court in Chicago, claims that changes to current and retired teacher pensions passed by the Illinois General Assembly and signed into law by Governor Pat Quinn earlier this month violate protections for public sector worker retirement benefits in the Illinois Constitution.

With the state's finances buckling under a $100 billion unfunded pension liability, the controversial measure reduces and suspends cost-of-living increases for pensions, raises retirement ages and limits the salaries on which pensions are based.

The lawsuit names Quinn, Illinois Comptroller Judy Baar Topinka and the Illinois Teachers' Retirement System's (TRS) board of trustees as defendants and seeks preliminary and permanent injunctive relief. It was filed as a class action, representing retired and active members of TRS, who are not currently members of any teachers' labor union.

It is also only the first shot of litigation against the law, which a coalition of public labor unions has vowed to fight.

The reforms, which take effect in June, are expected to save the state $160 billion over 30 years, while immediately reducing the unfunded pension liability by 20 percent. The law offers workers and retirees some sweeteners, including a reduction in contributions toward pensions and a method for ensuring the state fully makes its contributions.