May 20, 2015
By: Kerry Lester
SPRINGFIELD, IL – Illinois lawmakers are again considering a plan to overhaul Cook County’s pension system that could trim some workers’ benefits, despite a recent Illinois Supreme Court ruling striking down a statewide pension overhaul.
It’s a plan that could serve as a litmus test for the statewide pension overhaul that lawmakers are tasked with crafting, though some critics warn that if another plan ends up before the courts, it could limit the state’s pension options in the future.
A House committee approved the measure Wednesday by a 5-4 vote along party lines which would call for a roughly $147 million increase in the county’ annual contribution to the pension fund next year. It now heads to the full chamber for consideration.
The proposal calls for increasing the retirement age and boosting county employees’ contributions to their pension plans. But it also guarantees compounded cost-of-living adjustments and health care benefits for workers when they retire, which are components that supporters say could comply with a section of the state constitution that says promised benefits shall not be “diminished” or “impaired.”
“I’ve believed all along this is a different plan,” State Rep. Elaine Nekritz said, comparing the proposed county pension overhaul to the statewide pension overhaul, struck down earlier this month by the state Supreme Court sending. That ruling sent lawmakers back to square one on an issue that has dogged them for years.
Illinois’ five public-pension systems are short more than $100 billion of what’s needed to pay out benefits as promised, largely because lawmakers for years didn’t make the state’s contributions. Major credit rating agencies already have given Illinois the worst rating of any state in the nation.
Nekritz called the Cook County plan “structurally and factually different” from the state overhaul, which was approved in 2013 and was estimated to reduce the state’s unfunded liability by $145 billion over 30 years.
The milestone law would have erased the guaranteed 3 percent annual compounded cost-of-living adjustment increase, replacing it with a formula that gave the increases on a portion of benefits, depending on years of service. Some would have had the option of freezing their pensions and contributing to a 401(k)-style plan like many in private business.
Nekritz, a Northbrook Democrat, said the Cook County plan could pass muster in the courts because of legal arguments permitting benefits to be scaled back if workers agree to the changes and are given something in return.
The same plan, which passed the Senate but failed to move in the House last spring, resulted from negotiations between county leaders and two of the county’s three biggest unions, which support the bill. But not all unions are on board. Teamsters and the Service Employees International Union Local 73 back the legislation, while AFSCME opposes it.
John Cameron, the political director for AFSCME, said the Legislature’s passage of the plan would be “Deja vu all over again” and undoubtedly result in a lawsuit by affected unions and retirees, arguing that the proposal constitutionally diminished benefits.
While Democrats advanced the proposal along party lines, lawmakers on both sides of the aisle expressed concerns about its passage and the ripple effect it might place on limiting options for a larger statewide overhaul.
“I really worry about continuing to send to the courts these frankly controversial bills,” state Rep. Mike Zalewski, a Riverside Democrat said.
Republicans warned against approving a new proposal too quickly.
“We’re all still trying to digest the results of the Supreme Court ruling,” state Rep. Tom Morrison of Palatine said.
The measure is SB843.