pensions

Bruce Rauner
Brian Mackey / NPR Illinois

Gov. Bruce Rauner is calling for big cuts in state spending. But some of his projected savings could be a long way off.

A huge chunk of Rauner’s budget savings comes from freezing state pensions and moving workers into more modest plans.

“We cannot continue to raise taxes on all Illinoisans in order to fund the retirement benefits of a small fraction of our residents," Rauner said.

What’s unusual about Rauner’s approach is that he’s booking the $2.2 billion in savings right away, even though it likely would be challenged in court.

Amanda Vinicky

The fate of Illinois' pension law will stay on the fast track. Illinois' Supreme Court justices today rejected a request for a delay.

It can take a long time for a case to wend its way through the courts. But after a Sangamon County judge in November ruled Illinois' overhaul of public worker pensions unconstitutional, the state Supreme Court agreed to take up the case on an expedited basis.

On Tuesday, lawyers contesting the law tried to slow it down by a month.

Illinois Supreme Court Building
Illinois Supreme Court

As they seek to permanently toss Illinois' pension overhaul, state employees and retirees are asking the state Supreme Court for more time to make their arguments. Lawyers filed the request Tuesday.

It's a case that's supposed to be on the fast track: After a Sangamon County judge in November found Illinois' pension law unconstitutional, the Attorney General appealed straight to the state supreme court -- which agreed to hear it on an expedited basis.

WUIS/Brian Mackey

The new year will see an increase in the amount Illinois pays into the state's five publicly-funded pension systems.  

The State Journal-Register in Springfield reports (http://bit.ly/13TU5CI) Illinois' auditor general on Wednesday released a report by the state actuary showing a more than $680 million increase in pension payments in 2015 to $7.5 billion.  

The report doesn't explain the increase. However, it noted three of the five pension systems lowered the estimated rate of return they expect from investments.  

npr.org

The trade magazine "Institutional Investor" has ranked Illinois' incoming governor as its most influential player in U.S. pensions. An article says Bruce Rauner may regret ever having run for office, given the state's massive longterm pension debt, and the difficulty he is expected to have in addressing it.

Il. Supreme Court website - state.il.us/court

The Illinois Supreme Court is allowing a speedy review of a state pension overhaul that a lower court has declared unconstitutional.
 
The court issued an order Wednesday granting the government's request for an
expedited appeal.
 
The court says the government must file its initial argument by Jan. 12. The
other side _ a group of state employees, retired teachers and others _ must
respond by Feb. 27.
 
The case involves the pension fix lawmakers and Gov. Pat Quinn adopted last

state.il.us

State workers behind a challenge to an Illinois
pension law declared unconstitutional are opposing the government's attempt to
have it speedily heard by the Illinois Supreme Court.
 
 Attorney General Lisa Madigan asked the court last week to hasten its schedule
for considering the case. She argues that the government needs a decision
quickly because if it can't implement the law, it would have to find a way to
make up about $1 billion in savings in the first year.
 

Attorney General Lisa Madigan's office has asked the Illinois
Supreme Court for an expedited hearing of her appeal of a lower court's
declaration the state's pension overhaul is unconstitutional.  
 
 Madigan announced the motion Thursday. It says issues raised are of
``widespread public importance'' to state government and seeks a ruling in
advance of lawmakers' May 31 budget approval deadline.
 
Madigan's office had already filed the appeal concerning the 2013 law designed
to reduce roughly $100 billion in unfunded liability.  
 

Lisa Madigan
Marsy's Law for Illinois

Attorney General Lisa  Madigan says if the state supreme court agrees to an expedited hearing...  a ruling on the state's pension law could come by January,.

Harvey Tillis / Illinois Information Service

Although one court has tossed out Illinois’ mega pension overhaul, state leaders are likely to wait on another legal opinion before deciding what to do next.

There’s no question -- the Sangamon County Circuit Court judge’s ruling is meaningful. But Attorney General Lisa Madigan’s office is appealing to the state Supreme Court.

Madigan has said it makes sense for lawmakers to wait to hear from those justices.

Brian Mackey/WUIS

The state will refund money to about 75,000 state retirees who've been paying a portion of their pensions for health insurance over the last year and a half after a court hearing in Sangamon County.
 
Judge Steven Nardulli on Friday scheduled a Dec. 18 hearing to establish how to
distribute more than $60 million to the retirees. Attorneys estimate the money
will be returned by spring.                                                     
 
Retirees began paying a percentage of their annuity under a 2012 law.
 

Amanda Vinicky

An Illinois judge has ruled that a law intended to fix the nation's worst-funded state employee pensions violates the state Constitution. Sangamon County Circuit Judge John Belz ruled Friday in favor of state employees and retirees who sued to block the state's landmark pension overhaul.

At issue was whether lawmakers defied the Illinois Constitution by passing a law that reduces state workers', public school teachers' and university employees' retirement benefits.

screenshots from candidate TV ads

Unfortunately, even if the winner of the contest for governor is able to resolve what are arguably the two most pressing fiscal issues the state faces, Illinois’ budget would still be in deep trouble.

Hannah Meisel

Illinois' ability to change retirement benefits of government workers is limited because of a provision in the state Constitution. But what about trying to make that a non-issue, by doing away with that clause?

Article XIII, Sect. 5 of the Illinois Constitution is direct: pension benefits, it says, "shall not be diminished or impaired."

Nevertheless, a law passed last year cuts benefits for current workers and retirees. Whether that squares with the Constitution is currently the subject of a lawsuit.

Bruce Rauner
Brian Mackey/WUIS

Republican candidate Bruce Rauner continues trying to soften his image when it comes to government employees. This comes after he won the nomination in part by relentlessly attacking public employee unions.

Rauner has called for all current state employees to have their pensions frozen and be put into 401(k)-style retirement plans. Many consider that even more harsh than the pension reductions Democratic Gov. Pat Quinn signed into law last year.

WFIU/flickr

It’s expected to be some time before the courts decide whether Illinois can trim retirement benefits for public school teachers, university workers, and state employees. But the uncertainty continues to affect the credit outlook of schools and community colleges across the state.  

sangamon.co.il.us

A coalition of labor unions and state retirees is asking a judge for an expedited ruling in a case challenging the constitutionality of Illinois' pension law.  

Attorneys filed the motion in Sangamon Circuit Court Thursday. They want Judge John Belz to factor in a Supreme Court decision that found health insurance premiums were a protected retirement benefit for state workers.  

  Governor Pat Quinn now has the support of the two statewide teachers unions. The Illinois Federation of Teachers endorsed Quinn Wednesday despite the union's opposition to Quinn's ideas for pension changes.

The IFT is one of the groups suing Quinn for the pension overhaul law passed late last year that would reduce public employee benefits, including those for teachers.

But the union's president, Dan Montgomery, says the election is bigger than the ongoing lawsuit.

Wall Street's view of Illinois' financial health has taken a hit, thanks largely to the state budget that took effect at the start of this month. Pensions also continue to be a drag. 

When Illinois Democrats passed the state's latest budget, many seemed to hold their nose. Credit ratings agencies are more direct: Standard & Poors has revised Illinois' credit outlook to "negative." 

It says the new budget "is not structurally balanced and will contribute to growing."

Hannah Meisel/WUIS

  The Republican candidate for Illinois Attorney General is criticizing incumbent Lisa Madigan for defending the state's pension overhaul law, which he thinks is unconstitutional.

A clause in the state's constitution says that once earned, pension benefits shall not be diminished.

The pension law, passed last year, law reduces cost of living benefits paid out to state employees and public school teachers. That, and other changes, haven't actually taken effect yet; a lawsuit challenging the law is ongoing.

State Week logo (capitol dome)
Brian Mackey / NPR Illinois | 91.9 UIS

This week, the Illinois Supreme Court ruled that state employee pension benefits are protected under the state constitution, countering lawmaker's efforts to overhaul the state's underfunded pension system.

Illinois Supreme Court Building
Illinois Supreme Court

The Illinois Supreme Court says free health care is a protected retirement benefit for certain government employees. It was cause for celebration among those who’ve opposed Illinois' attempts to save money by cutting retirement benefits. But Illinois' pension battles are far from over.

Many state retirees used to get premium-free health insurance. When the law was changed to make them pay, a group of them sued.

flickr/Terence S. Jones

One of a number of Illinois towns struggling with increasing pension costs wants to save money by shifting control of its fire department to a private company.  

North Riverside officials pitched the proposal at a hearing before state regulators in Chicago on Thursday. Mayor Hubert Hermanek says the move could save $700,000 annually.  

Illinois Municipal League officials say other cities could try similar solutions when the state begins to enforce increasing pension payments in 2016.  

Brian Mackey/WUIS

  The Illinois Teachers' Retirement System says it expects a lower return on its pension investments in the next year. That means the state will have to cover more of the cost of teacher pensions.

TRS says it's still a good assumed rate of investment return at 7.5 percent. That falls in line with similar pension systems nationwide. But it's not as profitable as 8-percent, which TRS had been using for the previous few years.

Dave Urbanek is with TRS. He says the unpredictable nature of the international economy spurred the decision to lower the rate.

Brian Mackey/WUIS

The Illinois Legislature adjourned its spring session having passed a new state budget and other key measures, but leaving some business undone. Here's a look at what passed and what didn't:  
     BILLS SENT TO GOV. PAT QUINN:  
Budget: A roughly $35.7 billion budget for 2015 keeps funding flat for schools and most state agencies. Majority Democrats acknowledged the budget is ``incomplete'' because it postpones tough votes about whether to slash spending or find new revenue until after November's election.  

ILGA.gov

Illinois' pension overhaul might be on hold, but credit ratings agencies say they're not concerned. A Sangamon County judge Wednesday ruled that reductions to public employees' retirement benefits will not go into effect next month, as planned.                                                  

The Capitol
Brian Mackey/WUIS

  Officials at the University of Illinois say they are willing to work to retain faculty who opted to retire early as a result of mistakes in the state's pension overhaul.

It was a small typo, but it turned out to have big consequences for the state's public universities and community colleges.

  A judge has blocked Illinois pension overhaul from taking effect next month. It's a temporary victory for government employees who say the law is unconstitutional.

State employees, teachers and university workers were supposed to begin seeing changes to their retirement plans in June. It's part of a sweeping pension overhaul passed late last year.

commons.wikimedia.org

Earlier this month,  the Springfield Police Department promoted two sergeants to the rank of lieutenant.  One has already retired, able to earn a higher pension because of the promotion.

Under state law, retiring police officers are allowed to collect pension benefits based on rank for their last day of employment.

Springfield Alderman Joe McMenamin says a lieutenant retiring at a rank he never served is quote 'offensive.' He says the public doesn't appreciate a "revolving door of promotions right before retirement.”

UIS.edu

The board of the State Universities Retirement System has voted to accept an interpretation of last year's Illinois pension reform law that says it won't inadvertently cut university retirees' pension.  

According to the Chicago Sun-Times, (http://bit.ly/RvIgwf) the board's executive committee voted unanimously on Thursday in Chicago to follow other state pension systems and accept the interpretation of the 2013 law.  

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