First Ruling on Illinois Pension Reform Law Expected Friday

Illinois capitol

Sangamon County Judge John Belz spent Thursday hearing arguments for and against Illinois’ major pension overhaul.

On Friday, he is expected to release his ruling on the law. If he declares it unconstitutional, the debate could move to the halls of the Supreme Court sooner than later.

More from the Chicago Tribune:

[Judge Belz] could move to hold hearings in the case, or he could declare the measure unconstitutional, which would likely send the matter directly to the state Supreme Court.

Even then, it could take several more months before the justices make a final decision, meaning Rauner may not get the clarity he’s seeking in time to drive cost-saving pension changes during the spring legislative session.

Belz held a hearing Thursday, and Illinois Attorney General Lisa Madigan’s office argued the pensions could be modified in times of emergency — such as the financial straits caused by the state’s worst-funded pension system in the nation.

A battery of attorneys for state employees and retirees argued strenuously the law should be tossed out because it is unconstitutional — a move that would put it on a likely path to the Illinois Supreme Court.

In July, the high court threw out a different law that cut health-care benefits that had been guaranteed to retirees, saying lawmakers had overstepped what they were allowed to do. That decision alone buoyed the hopes of state pensioners — as well as the city of Chicago retirees who don’t want their own pensions plans reduced.

Friday’s ruling is key because it is the first step toward determining whether officials can scale back public pensions in any way once they are set.

Unions believe the law represents an unconstitutional breach in contract. From the Chicago Tribune:

Unions representing government workers are asking Judge John Belz to declare unconstitutional a law approved nearly a year ago that aims to rein in costs of a retirement system reeling from more than $100 billion in debt.

At the heart of the pension issue is a clause in the Illinois Constitution that says membership in any state pension system is an “enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

Employee unions argued that the pension law, which curbs annual cost-of-living pension increases for current retirees and delays the age for retirement for many current public workers, clearly violated those protections.

Illinois governor-elect Bruce Rauner believes the law will be overturned by the Supreme Court. Rauner has said in the past that the law doesn’t go far enough to reduce pension liabilities.

Fort Worth Firefighters To Sue City Over Benefit Cuts

fire trucks

The Fort Worth firefighters union announced plans Tuesday to file a lawsuit against the City Council over a series benefit cuts that would scale back retirement benefits for new hires.

The union claims the cuts represent a breach of contract and a violation of the Texas constitution.

From the Star-Telegram:

The president of the Fort Worth Professional Firefighters said Tuesday night that the group plans to move forward with a lawsuit against the city over the benefit reductions that the City Council approved by a 6-3 vote.

“When these pension changes go into effect, it will be a taking. We will be joining the police officers in that federal suit,” said Jim Tate, the association’s president. The group must vote on filing the lawsuit, Tate said.

The cuts will affect firefighters hired before Jan. 10, 2015, and include reducing the multiplier used to calculate benefits from 3 percent to 2.5 percent, using the high five years instead of three years to determine retirement pay, and eliminating overtime that is not built into a firefighter’s salary from calculations.


The lawsuit accuses the city of contract impairment, violation of due process, unlawful taking of property, and violating the U.S. and Texas constitutions in reducing pension benefits for future service. The council reduced the multiplier used to calculate benefits, raised the number of years for retirement pay and eliminated overtime from calculations.

City Manager David Cooke said that the situation between the two groups is not “combative” but that “we both agreed to let the courts decide who is right.”

“One of the challenges certainly is we are in litigation with the police over our ability to do what we already did. The firefighters have simply said they are going to join the police and see what the courts will actually decide,” Cooke said.

City Council members, who passed the benefit cuts by a 6-3 vote, weighed in on both sides of the issue. From the Star-Telegram:

“It does put the fire on par with the rest of our employees, and going forward this is all going to get resolved in federal court. We believe that putting them in the same plan with the rest of our employees is the proper thing to do at this time,” said Councilman W.B. “Zim” Zimmerman, who voted for the reductions.

Council members Jungus Jordan, Ann Zadeh and Kelly Allen Gray voted against the changes.

“On the vote to make changes for new hires, it was a little easier for me. But making changes to people who already have pensions they are depending on in place, that is a little bit harder for me to do,” Zadeh said.

Tate said the reductions will force firefighters to retire later to maintain their current benefits. The current average retirement age is 59, he said, but he expects that to jump into the 70s.

“I feel bad not only for the firefighters but for the citizens of this city that the interest of the wealthy business owners takes precedence over the citizens who are going to be served by these elderly firefighters in the years to come,” Tate said.

Union members still must vote to approve the lawsuit.