Quinn Proposes Pension Changes
By Chuck Sudo in News on Apr 21, 2012 3:00PM
Gov. Pat Quinn revealed his proposals for solving the state's pension crisis Friday, a problem he said he was "put on this earth" to solve.
Quinn's plan calls for a three percent increase in employee contributions to the pension fund; reducing cost-of-living adjustments to 3 percent or one-half of the Consumer Price Index, whichever is less; and raising the retirement age for government workers from 55 to 67. The state's pension fund is underfunded by $80 million at this point and, if Quinn's proposals are approved, would save the state $65 to $85 billion by 2045. Quinn called the pension shortfall “one of the most difficult problems that Illinois government has faced for more than three decades.”
“I didn’t create the problem,” Quinn said. “But I’m here to solve it."
State employees who opt for the new plan would not see any benefit from pay raises between now and retirement, but would benefit from those pay raises in retirement. The Illinois constitution prohibits cutting pension benefits for union workers, but Quinn hopes to get around that by making the changes "voluntary." Union members who refuse the changes would then forfeit their retirement health care coverage, which isn't guaranteed under the state constitution.
Labor unions called Quinn's proposal "insensitive and irresponsible." Illinois AFL-CIO President Michael Carrigan said, "It is a clearly illegal attempt to solve the problem caused by past governors and the Legislature solely on the backs of teachers, caregivers and other public workers."
Quinn's proposal was well received in Springfield, by Mayor Rahm Emanuel and other civic watchdogs. Emanuel's office released a statement commending Quinn on "a strong beginning and he has outlined many good ideas regarding retirement security. I look forward to continuing to work with Governor Quinn and legislative leaders to ensure that the hardworking public employees who contribute to these funds and their families have a secure future with a reasonable retirement. We owe it taxpayers to fix this problem so they are not left footing the bill."
Ty Fahner, President of the Civic Committee of The Commercial Club of Chicago, said Quinn's plan is a good first step. "We agree with much of what is outlined in the Governor’s plan, but believe that further refinement is necessary. With that said, we are very encouraged and stand ready to work together to put our state back on sound financial ground.”