biss-pension-debate

Illinois lawmakers today approved a pension reform plan and sent it to Gov. Quinn, who has promised to sign it, while public employee unions vowed to challenge the law in court.

Supporters claim the reforms will over time eliminate the state’s $100 billion pension debt that has caused its credit rating to plunge to be the worst among the 50 states

State Sen. Daniel Biss of Evanston was a member of the conference committee that developed the bill which ultimately won the backing of the four key House and Senate leaders.

It was approved by narrow margins — 30-24-3 in the Senate and 62-53-1 in the House. All three House members who represent parts of Evanston — Kelly Cassidy, Laura Fine and Robyn Gabel — voted for it.

Biss said the bill will save enough money to stabilize the state’s finances while protecting current retirees, those who rely on small pensions and those who have worked the longest.

In addition, he said, the bill contains a funding guarantee and closes loopholes.

A coalition of union groups issued a statement saying adoption of the legislation marked “a dark day” for Illinois public servants who “stand to lose huge portions of their life savings.”

The group said that if Quinn doesn’t veto the bill the unions “will have no choice but to seek to uphold the Illinois Constitution and protect workers’ life savings through legal action.”

Biss said he believes the courts will uphold the law after balancing the constitution’s pension clause “against other constitutional legal and public priorities” given the state’s dire fiscal problems.

He added that the state still faces difficult challenges “on the road to permanent fiscal stability.”

Related documents

Full text of the pension bill

Summary of pension bill provisions

Bill Smith is the editor and publisher of Evanston Now.

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1 Comment

  1. Better actuarials analysis?

    There should quickly be a large number of actuaries on the market to give Evanston, the State, and Chicago] additional and hopefully more accurate analysis of  pension obligations.  The assumed rates used for analysis over the last few [many?] years have been unrealistic and, despite the obvious, pension problems have been under-estimated due to the assumption of rates.

    The Obamacare requirements on insurance companies have taken away the need for them to do actuarial analysis and pricing since the government, not analysts, determine rates and coverage.

    Thus there should be a large number of actuaries leaving insurance compaies and going on the market—thus more available [at lower rates] to do analysis of pension obligations.  That won't solve the problem—in fact show it is worse—but the scope of the problem will be more obvious.

     

     

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