Illinois Supreme Court Will Rule on Chicago Pension Case on Thursday

The Illinois Supreme Court on Thursday will announce its judgment on the legality of Chicago’s 2014 pension reform law.

A lower court declared the law – which mandated higher contributions for current employees and reduced cost-of-living adjustments for retirees of two city pension systems – unconstitutional.

More on the upcoming ruling, from Reuters:

The Illinois Supreme Court on Thursday will release its ruling on the constitutionality of a 2014 state law aimed at boosting funding for two of Chicago’s pension funds, according to a court spokeswoman.

In oral arguments before the court in November, Chicago asserted the law affecting its municipal and laborers’ retirement systems actually benefited workers and retirees by taking steps to avoid insolvency for the funds.

The state law required the city and affected workers to increase their pension contributions and replaced an automatic 3 percent annual cost-of-living increase for retirees with one tied to inflation. The increase would be skipped in some years.

Without reforms, Chicago warned that the two funds would run out of money within 10 to 13 years.

City unions and retirees that filed challenges to the 2014 law contended Chicago merely wished to avoid paying for benefits promised to its workers, in violation of the state constitution’s pension protection clause.

Municipal bond investors, for their part, had declared the case a loss for Chicago months ago.

Photo by bitsorf via Flickr CC License