Two pensions bills sent to Illinois Senate floor

Two pensions bills sent to Illinois Senate floor

SPRINGFIELD — Two major pension reform bills were forwarded to the Senate floor Wednesday although several of those voting for the measures voiced concerns and said the measures still needed revision.

Although both bills were sponsored by Democrats, each attracted bipartisan support. Sen. Dale Righter, R-Mattoon, voted against both measures, however.

One of the bills approved was a hybrid, actually incorporating the language of the other bill, along with language that the sponsor said ensured that there would be a quicker resolution of the issue if the courts found the first bill unconstitutional. That bill, SB 1, is sponsored by Senate President John Cullerton.

Cullerton claims his bill has a better chance of being found constitutional because it includes the concept of "consideration," offering state retirees an option between accepting annual cost-of-living adjustments or being included in the state health insurance plan, although not with any guaranteed benefits.

But opponents said Cullerton's plan wouldn't save enough money.

"The reduction in the unfunded liability in Senate Bill 1 is currently estimated in the range of $11 to $18 billion," said Ty Fahner, a former Illinois attorney general who is president of the Chicago-based Civic Commitee. "Other reform proposals that are currently under consideration by the General Assembly estimate savings in the unfunded liability that are double those of Senate Bill 1."

The other bill approved, SB 35, is sponsored by Sen. Daniel Biss, D-Skokie. It has bipartisan backing, including the support of House Minority Leader Tom Cross, R-Oswego.

It also would save substantially more money, but also would make more severe cuts in benefits, including those for retired teachers and retired university employees.

It delays annual cost-of-living adjustments until the age of 67 or until five years after retirement, whichever comes first. It limits the adjustment to the first $25,000 of pension income, increases the employee contribution by 2 percent over two years and caps pensionable salaries.

Biss said his bill immediately would reduce the current $95 billion unfunded liability by $28 billion, and cut total state payments into the pension funds between now and 2045 by $159 billion.

"There's no question that it saves a ton of money via benefit reform," Biss said. "That's an anticipated rate of growth in our payment (to the pension system) over the course of the next 30 years of pretty close to 3 percent a year. In other words, we're not expected to dial back our obligations from what we're currently paying."

He said his bill would include balance with "substantial savings" and "painful cuts that will enable the state to do what it needs to do in the other areas of programmatic spending that are in order to ensure the well-being of the people of Illinois."

The cost living-of-living reductions, Biss said, would account for most of the savings.

Cullerton said he incorporated Biss' pension bill into his own pension legislation to save time.

"We're trying to pass a bill with the possibility that part A (the Biss bill) would have been declared unconstitutional, we have the backup already passed and already in front of the court," Cullerton said. "If we were to just pass part A and it's challenged — as it undoubtedly will — and a year later the court throws it out, then we have to come back to the Legislature and try to fashion another remedy, pass that bill if we could, that bill would be challenged and we'd have another year in court."

He said the legislation, if passed, would direct the court "to rule on the constitutionality of part A before you even look at Part B."

Although both Cullerton's and Biss' bills were approved by wide margins, several senators voting to move them out of committee said they weren't sure they'd support them on the Senate floor and suggested they'd be more comfortable with revisions, particularly to the cost-of-living provisions.

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serf wrote on March 13, 2013 at 9:03 pm

More of the same.

The fact that legislators are pretty much conceding that the bill is unconstitutional before it even passes should tell you all that you need to know.

squeaky wrote on March 13, 2013 at 10:03 pm

No "pension reform" legislation proposed to date will pass constitutional muster or fundamental contract law.   Sen Cullerton and Speaker Madigan know this.  

Sid Saltfork wrote on March 13, 2013 at 10:03 pm

They are trying to slip their plans past the State of Illinois Constitution by exempting the Judges Pension System from the "pension reform".  There has not been much transparency regarding the General Assembly Pension System in the "pension reform" either.

Arizona tried the same; but failed in the courts.  Colorado tried the same; but failed in the courts.  Illinois though might get it through the state courts since Illinois is #1 in Corruption in the nation.  Travel out of state with Illinois license plates; and hear the comments.