Illinois Supreme Court Finds Chicago Pension Reforms Unconstitutional

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The Illinois Supreme Court on Thursday reversed a 2014 Chicago pension reform law that raised contributions for employees and cut benefits.

A portion of the court’s opinion, from the Chicago Sun-Times:

“These modifications to pension benefits unquestionably diminish the value of the retirement annuities the members . . . were promised when they joined the pension system. Accordingly, based on the plain language of the act, these annuity-reducing provisions contravene the pension protection clause’s absolute prohibition against diminishment of pension benefits and exceed the General Assembly’s authority,” the ruling states.

“A public employee’s membership in a pension system is an enforceable contractual relationship and the employee has a constitutionally-protected right to the benefits of that contractual relationship . . . Those constitutional protections attach at the time an individual begins employment and becomes a member of the public pension system. Thus, under its plain and unambiguous language, the clause prohibits the General Assembly from unilaterally reducing or eliminating the pension benefits.”

[…]

The deal that Emanuel painstakingly negotiated with scores of union leaders raised employee contributions by 29 percent — from 8.5 percent currently to 11 percent by 2019 — and ended compounded cost-of-living adjustments for retirees ineligible for Social Security that have been a driving force behind the city’s pension crisis.

The city’s lawyers thought the reforms would hold up in court because the benefit cuts were negotiated with unions.

 

Photo by Viewminder via Flickr CC License

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