“Phantom Savings”: Top Illinois Senator Questions Gov. Rauner’s Pension Cuts

Bruce Rauner

Illinois Gov. Bruce Rauner laid out his budget plan on Wednesday, and it included a number of pension cuts – decreasing annual COLAs, freezing benefits, and moving employees into a plan that yields fewer benefits.

(Under Rauner’s proposal, police and firefighters would be exempt from these changes.)

One lawmaker on Wednesday accused Rauner of using “fuzzy pension math” to calculate the savings the cuts would yield.

That followed the accusatory words of another top lawmaker, who claimed Rauner’s pension changes produced “phantom savings”.

Here’s Illinois Senate President John Cullerton:

The basic math still doesn’t work in his proposal. Governor Rauner leaves a $2.2 billion hole in the budget by relying on unrealistic revenues from a questionable pension proposal. Even as the courts review a significant test case, the governor’s plan banks phantom savings for a pension plan that may fail key legislative and judicial tests. When we passed pension reform last year, we took care to exclude possible savings from budget plans pending a legal resolution. The governor’s plan rejects that wisdom.

Indeed, when the state passed its pension overhaul in late 2013, it never included the savings in the budget. That’s because a legal challenge was sure to be brought against the law and Illinois didn’t want to assume savings only to get burned later.

Rauner’s proposals, if enacted, are likely to end up in court as well, depending on the outcome of the state’s current pension lawsuit.


Photo by Tricia Scully via Flickr CC License

A Group of Lawmakers in Illinois Are Opting Out of Their Pensions


A group of legislators in Illinois are doing something a little strange and a lot unexpected: opting-out of their pensions.

It may only be for symbolic purposes, but it’s a rare, and interesting, occurrence nonetheless. From the Northwest Herald:

One of the first moves state Rep. David McSweeney made after assuming office in January 2013 was completing paperwork to opt out of the pension system, he said.

“I think this is a part-time job,” McSweeney said, “and with all the financial problems the state has, I don’t think legislators deserve pensions.”

As Illinois continues to grapple with pension reform in the midst of heavy financial woes, McSweeney, R-Barrington Hills, is joined in his decision by an increasing number of state legislators.

He is among a group of more than 20 known Illinois lawmakers forgoing pensions entitled to them through the General Assembly Retirement System, according to Reboot Illinois. McSweeney said he’s hoping to set an example.

“I would certainly encourage people to follow, and I think others are doing it,” he said.

Most of the participating lawmakers are relatively new to office. Coincidence? Actually, there’s a reason. From the Northwest Herald:

Upon entering into the legislature, members are “basically put into the plan automatically,” according to Tim Blair, executive secretary of the State Retirement System.

Those who have opted out had to do so within a 24-month period after becoming a member, Blair said, adding after two years, members no longer have the option to forgo the pension system.

Now, the absence of 20 pensions isn’t going to solve Illinois’ fiscal woes. But many groups have been calling for lawmakers to reduce or eliminate their pensions to help solve the ongoing fiscal crisis the state is facing. Here is a list of the participants, courtesy of Reboot Illinois:

Graphic courtesy of Reboot Illinois