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Illinois House OKs Madigan pension-reform plan

Published: Thursday, May 2, 2013 4:15 p.m. CDT

SPRINGFIELD (AP) — The Illinois House approved a plan Thursday that would tackle the $97 billion shortfall in the state's retirement system by increasing employee contributions and decreasing benefits, the first victory for across-the-board pension reform in four years of debate.

Shepherded by House Speaker Michael Madigan, the House voted 62-51 on a plan he says would reduce the liability by $30 billion and fully fund the systems by 2044 for state employees, university workers, and primary-school teachers.

"This obviously does not meet every request. This obviously does not make everyone happy," the Chicago Democrat said during more than an hour of floor debate. "We're all familiar with the severe fiscal problem of the state and the fiscal problems of the pension systems are a large part of that problem."

The plan largely resembles a blueprint negotiated by Democratic Rep. Elaine Nekritz and House Republican Leader Tom Cross. But Madigan put some zing into the debate by introducing his language, pushing it through a committee vote over labor leaders' objections and ushering it off the House floor, all in about 48 hours.

Years of underfunding by past governors and General Assemblies led to a pileup of debt in five public-employee pension accounts, which now are nearly $100 billion short of what they need to cover all current and retired workers.

At its base, the plan requires employees to pay 2 percent more of their salaries toward pensions and reins in cost-of-living increases, tying it not to the pension they earn each year, but to a cap $1,000 for each year of service. Pensions may be paid on a total salary of $110,000, a limit that increases by half the rate of inflation each year and retirement is delayed for people aged 45 or younger.

Employee unions' main complaint about "reform" has been that pension contributions have continued to come out of individual worker paychecks without fail.

"If I'm a state worker, if I'm a teacher, a university worker, I have every right to be mad as hell. I've done everything you've asked me to, dutifully ... with every expectation that what I was promised when I started was going to be there ... ," Cross said. "We have no choice. We have to move forward today."

The state will owe about $6 billion for pensions next year, but no one plans to build in any savings even if the bill becomes law because they expect a lawsuit over the plan's constitutionality.

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The bill is SB1

Online: http://www.ilga.gov

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Contact AP Political Writer John O'Connor at https://www.twitter.com/apoconnor

 

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