Circuit Court Throws Wrench in Chicago Retiree Cuts

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Last year, Chicago Mayor Rahm Emanuel ordered a three-year phase-out of a subsidy the city gives retirees to help pay for healthcare.

But a circuit court judge over the weekend ruled that certain retirees’ healthcare coverage is protected by the Illinois Constitution’s pension protection clause.

From the Chicago Sun-Times:

A Cook County court judge has thrown a curveball that threatens to prevent Mayor Rahm Emanuel from saving $108.7 million a year by completing a three-year phase-out of the city’s 55-percent subsidy for retiree health care.

In a 15-page ruling handed down this week, Circuit Judge Neil Cohen rejected the city’s motion to dismiss a lawsuit filed by 30,000 retirees and kept the individual pension funds on the hook as well.

More importantly, Cohen ruled that the lifetime health care coverage of 20,000 people who started working for the city prior to Aug. 23, 1989, is protected by the Illinois Constitution’s pension protection clause. It states that those benefits “shall not be diminished or impaired.”

[…]

The judge dismissed the lifetime benefits claim made by retirees who started working for the city after Aug. 23, 1989. He argued that they began working under a statute that provided benefits only for limited periods of time and that those agreements have expired.

The ruling is considered a victory for retirees hired before August 1989, even if the case still has a ways to go.

 

Photo by Joe Gratz via Flickr CC License

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