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Illinois Supreme Court Strikes Down Chicago Pensions Plan
Source: Associated Press
Illinois Supreme Court Strikes Down Chicago Pensions Plan
By JOHN O'CONNOR, ASSOCIATED PRESS
SPRINGFIELD, Ill. — Mar 24, 2016, 1:05 PM ET
The Illinois Supreme Court dealt another devastating blow Thursday to the state's impatient attempts to control its ballooning public pension debt by striking down a state law that would have cut into an $8 billion hole in two of Chicago's employee pension accounts.
The law forced the city to significantly ramp up its taxpayer-fueled contributions, but also cut benefits and required larger contributions from about 61,000 current and retired municipal civil servant workers. The high court unanimously sided with workers who sued the city, arguing that the law violated the Illinois Constitution's protections against reducing promised pension benefits.
The city — whose decades of underfunding is overwhelmingly to blame for the crisis — has warned that the funds would be insolvent within 15 years without the change. But the court said that despite those warnings, the law's provisions "exceed the General Assembly's authority."
The ruling mimicked one by the high court less than a year ago involving a separate pension bailout: the $111 billion deficit in state-employee retirement accounts.
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By JOHN O'CONNOR, ASSOCIATED PRESS
SPRINGFIELD, Ill. — Mar 24, 2016, 1:05 PM ET
The Illinois Supreme Court dealt another devastating blow Thursday to the state's impatient attempts to control its ballooning public pension debt by striking down a state law that would have cut into an $8 billion hole in two of Chicago's employee pension accounts.
The law forced the city to significantly ramp up its taxpayer-fueled contributions, but also cut benefits and required larger contributions from about 61,000 current and retired municipal civil servant workers. The high court unanimously sided with workers who sued the city, arguing that the law violated the Illinois Constitution's protections against reducing promised pension benefits.
The city — whose decades of underfunding is overwhelmingly to blame for the crisis — has warned that the funds would be insolvent within 15 years without the change. But the court said that despite those warnings, the law's provisions "exceed the General Assembly's authority."
The ruling mimicked one by the high court less than a year ago involving a separate pension bailout: the $111 billion deficit in state-employee retirement accounts.
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Read more: http://abcnews.go.com/Politics/wireStory/illinois-supreme-court-strikes-chicago-pensions-plan-37896294
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