March 24, 2016

Chicago pension cuts struck down by Illinois Supreme Court

Affirming a lower court ruling, the Illinois Supreme Court on March 24 struck down Public Act 98-0641, legislation that cut the modest pensions of retired City of Chicago employees and required active employees to pay more only to receive a diminished benefit when they retire.

The successful challenge was brought by several active and retired City of Chicago employees and their four unions—AFSCME Council 31, the Chicago Teachers Union, the Illinois Nurses Association and Teamsters Local 700.

The four unions issued this joint statement:

"Today's ruling strengthens the promise of dignity in retirement for those who serve our communities, and reinforces the Illinois Constitution, our state’s highest law.

"Politicians caused the pension debt by failing to set aside adequate contributions, in effect borrowing from future retirees to avoid raising revenue or cutting spending instead. At the same time, city workers such as librarians and truck drivers, school social workers and nurses were faithfully paying their share. They earned, contributed to and counted on a modest pension—just $32,000 on average—instead of Social Security, for which city employees are not eligible.

"Like last year's decision that prevented pension cuts to teachers, state employees and university employees in state pension systems, this ruling makes clear again that the politicians who ran up the debt cannot run out on the bill or dump the burden on public-service workers and retirees instead.

"It's long past time for elected officials to stop trying to end-run the constitution and shirk their duty. Pension funding challenges require funding solutions that must be constitutional and fair to all. Our unions are committed to working with anyone of good faith toward that goal."

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