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Labor Unions Sue To Halt Emanuel Pension Reform From Taking Effect

By Chuck Sudo in News on Dec 17, 2014 3:30PM

Image credit: Pincasso/

Current and retired city workers and the labor unions representing them filed a lawsuit Tuesday to stop the pension reform law championed by Mayor Rahm Emanuel from taking effect Jan. 1. That legislation, signed into law by Gov. Pat Quinn last June, calls for cuts in cost-of-living increases for the Municipal and Laborers retirement funds, see workers contributions to their retirement plans rise from 8.5 percent to 11 percent annually over five years, raises the retirement age for current employees and sets the stage for a five-year, $250 million property tax hike beginning in 2018.

The lawsuit contends the law violates the Pension Protection Clause in the Illinois Constitution.

"Employees will have to pay more during the terms of their employment only to get less in retirement," the suit states. "A change in the formula used to calculate pension benefits that results in public employees paying more for the same benefit, much less paying more for a diminished benefit, is the type of unlawful and unfair conduct that the Pension Protection Clause (in the Illinois constitution) prohibits."

Emanuel, as he often does in these situations, expressed confidence the law will withstand a legal challenge and said he’s acting in the best interests of taxpayers.

"I pledged as mayor to address our pension funding shortfalls to protect the retirements of our workers and respect the hard work of our taxpayers," Emanuel said. The legislation "does nothing short of ensuring the future of 61,000 city workers and retirees — is also compliant with the Illinois constitution. Without this reform, these two funds will run out of money in just a matter of years, which is why we must defend this law to protect the future of our workers, retirees and taxpayers."

Chicago’s municipal pensions are underfunded by $19.4 billion and are expected to go broke within the next decade if serious reform isn’t enacted. The city also faces a $600 million balloon payment to stabilize police and firefighters pension funds next year under a 2010 state law Emanuel called “mindless, reckless and irresponsible.” Labor unions filed a lawsuit against another pension reform law passed last year by the Illinois Legislature. That law was ruled unconstitutional in Sangamon County Court last month, setting up an appeal in March with the Illinois Supreme Court.

A hearing has been scheduled for Dec. 29 on whether to grant a temporary restraining order to halt the city pension reform law from taking effect.