2nd Lawsuit Argues Chicago Pension Reform Law Is Unconstitutional
A second legal challenge to the 2014 law that would cut pension benefits for some Chicago public workers was filed Dec. 26 in Cook County Circuit Court, Meaghan Kilroy reported for Pensions …
|A second legal challenge to the 2014 law that would cut pension benefits for some Chicago public workers was filed Dec. 26 in Cook County Circuit Court, Meaghan Kilroy reported for Pensions and Investments Dec. 30.
The lawsuit, brought by the Municipal Employees Society of Chicago, argues that reducing pension benefits is unconstitutional. It states that “[The Illinois Constitution] explicitly protects the benefits of participation in a government retirement system from being diminished or impaired.”
The law, signed by Gov. Pat Quinn June 9 of last year, affects participants in the Chicago Municipal Employees’ Annuity and Benefit Fund and Chicago Laborers’ Annuity and Benefit Fund, worth $5.3 billion and $1.4 billion respectively. It reduces cost-of living adjustments for retirees as well as increasing both employee and employer contributions to the plans.
Proponents of the measure have called it a pension reform law, and Chicago Mayor Rahm Emanuel says that without these mandated steps, both funds may go completely broke. He has also maintained that the reforms are legal. City documents show that the municipal fund is approximately 38% funded, while the laborers’ fund is 58% funded. Together, they have about $9.4 billion in unfunded liabilities.
In general, lawsuits against employers have gone up by 400% over the last two decades in the United States, though most of those concern private companies.
Certain union members had filed a previous lawsuit Dec. 16. Clint Krislov, who is representing the plaintiffs of the additional lawsuit, say hearings are scheduled for Jan. 28 and 30 and Feb. 6 and 11.
Multiple bills and court cases regarding pension reform in the state have come under the spotlight during the past year.
Meanwhile, just before the new year, Gov. Quinn also signed a bill into law that prevents taxpayer-funded pension payments for public employees who have been convicted of felonies concerning their positions. The law is scheduled to go into effect June 1.