Municipal Government

Illinois Supreme Court Voids Chicago Pension Cuts

March 31, 2016
By Steven Wishnia and Neal Tepel

Springfield, – IL  The Illinois Supreme Court ruled unanimously March 24 that the 2014 state law requiring Chicago city workers to pay more for pensions and cutting benefits for retirees is unconstitutional.

The 5–0 ruling backed claims by unions, current workers, and retirees that the law violated a provision in the 1970 state constitution, which states that legally promised pension benefits “shall not be diminished or impaired.” Mayor Rahm Emanuel’s administration argued that the law, which also increased the city’s contributions to its pension funds by more than $400 million a year, was actually creating a benefit for workers by ensuring that the financially troubled funds were solvent, but the court held that it merely offered workers “what already is guaranteed to them.”  The decision “eliminates the city's threat that we'll just let the funds go bankrupt, and you'll be stuck with a claim on a fund that has no money. This makes it clear that the city is going to be on the hook to make sure that these pensions are paid,” said Chris Krislov, the lawyer representing retirees. The court struck down pension cuts for state workers on the same grounds in 2015. Read more

March 31, 2016

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