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State Pension Reform Law Halted By Judge

By Chuck Sudo in News on May 15, 2014 4:00PM

Image credit: Pincasso/

Parts of the pension reform law passed by the Illinois Legislature last December was supposed to take effect June 1. A downstate judge put a stop to that Wednesday while determining if the law is constitutional.

Sangamon County Circuit Judge Jon Belz issued the stay on the law, which has been the subject of a lawsuit filed by some of the Illinois’ largest public sector unions. Belz said in his ruling “there’s just too much uncertainty” about some of the details of the law.

“I do think it has led to great confusion … almost across-the-board confusion,” Belz added.

The coalition of labor unions behind the lawsuit argue the reform law is unconstitutional. It calls for a hike in the retirement age for state workers currently age 45 or younger; a reduction in cost of living allowances using a formula based on how long a worker held their job and only toward a portion of their pension; prohibiting state pension systems from using pension funds to pay healthcare costs; removing all pension matters from collective bargaining talks except pension pickups; reduce employee salary contributions to their pensions by 1 percent; and for the state to contribute $364 million in funding in 2019 and $1 billion every year thereafter until 2045 or until the pensions are fully funded.

Lawmakers counter it will save Illinois taxpayers $145 billion over a 30-year period. Yet none of the savings expected from the law have been factored into this year’s state budget. State Rep. Elaine Nekritz (D-Northbrook) agreed with Belz’s decision.

“It should have been stayed and we should wait to see frankly what the Supreme Court tells us.”

Dave Blanchette, spokesman for Gov. Pat Quinn, said the savings weren’t factored into the budget because legal challenges to the law were anticipated. Abdon Pallasch, Quinn’s assistant budget director, said the governor was “confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state’s unfunded pension debt.”

Illinois AFL-CIO president Michael Carrigan, one of the plaintiff unions in the lawsuit, said “We are pleased the court prudently chose to halt implementation of these sweeping changes, which have caused so much fear and uncertainty and are likely to be overturned.”