Illinois Lawmakers Pass Pension Overhaul
Illinois is one step away from a two tiered pension system for most public employees. The House and Senate easily approved changes for future workers Wendesday . Those currently on the payroll and retirees won't be affected.
But anyone hired beginning next year will face limits on how much they can earn and be required to work longer... until age 67... to retire.
The move is touted as a cost savings for state government. Illinois is considered to have the worst funded pension system in the country... but unions representing downstate teachers, university employees, state workers and others argue that's NOT their members' fault. AFSCME Executive Director Henry Bayer says state leaders have a history of failing to put enough money in....
"The problem of our pensions is not a problem of rich benefits", says Bayer. "The problem with our pensions is we have not funded them year in and year out as we were supposed to have done."
Bayer says the changes would make it harder to recruit top talent to the public sector.
Unions were outraged when Democratic leaders ended negotiations last week. House Speaker Mike Madigan says the state had to act fast. Madigan says otherwise... the state faces a financial downgrade that could make it more expensive to borrow money for infrastructure and other needs...
"It's currently acting as an impediment for the State to borrow money for activities that we all agreed to do", says Madigan.
Madigan estimates the state will save 100-billion dollars in the next few decades by paying out less in pensions. But that's led to speculation the state might also look to use some of that savings up front and make a smaller contribution to the systems next fiscal year.
Governor Quinn said in a statement Wednesday night that he looked forward to signing the bill.