A. The House has been voting on a series of amendments that deal with individual aspects of the state’s pension problem. Most of those have been rejected, such as plans to freeze retirees’ cost-of-living adjustments and raise working employees’ pension contributions by 5 percentage points. However, the House did approve two amendments and last week took final votes on the bills containing those amendments. House Bill 1154 limits the salary on which a pension can be earned to the Social Security wage cap, currently $113,700. People currently earning more than that would still get a pension based on those higher salaries. House Bill 1166 increases the retirement age on a sliding scale. Someone age 46 or older would see no change, but some people 34 and younger would have to work five years longer to earn full pensions. Although the bills passed the House, Representative Elaine Nekritz does not believe pension reform will be handled through the individual bill approach. “I still think we have to put the whole package together that hands the (Illinois) Supreme Court one piece of legislation to consider,” she said.
Q. Are there bills that do that?
Q. Why are the COLA changes significant?
Q. Does Cullerton’s plan save as much money as the others?
A. No, and he admits that. But Cullerton also said his plan will save billions, and it’s better to have an immediate backup in place should the courts strike down Part A.
Q. Aren’t all of these plans unconstitutional because they diminish pension benefits?
A. Public employee unions certainly believe that is the case. Their legal experts can cite court decisions both in Illinois and in other states to support their argument that all of these bills will be voided by the courts. They cite the state Constitution’s pension clause, which says promised benefits cannot be impaired or diminished. Of course, advocates of pension change also have legal experts who can cite court decisions, both in Illinois and in other states, to support their arguments that the changes are constitutional. One point they raise is that the state’s pension systems are in such bad shape that cutting benefits can be legally justified to ultimately save the systems from insolvency, which would be the ultimate diminishment of benefits. ["No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem" (from COLA: A Guarantee for Illinois Judges)]. They also point out that even the First Amendment to the U.S. Constitution, which guarantees free speech, is not absolute. [Read more rebuttal: Constitutional Issues Concerning SB 0001].
The Senate Executive Committee spent more than three hours last week debating the two Senate pension bills. Much of that time was spent by lawyers on the committee and lawyers representing those in favor and against the bills discussing fine points of constitutional and contract law. It also served to underscore the argument raised by many lawmakers: that no one knows what will happen until a pension proposal is passed, it is challenged in court, and the legal system decides the outcome. [Read more rebuttal Defending and Protecting Public Employees’ Pensions against Legislative Siege]
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