Illinois lawmakers pass long-awaited pension reform

Reuters

SPRINGFIELD, Illinois, Dec 3 (Reuters) - Illinois lawmakerson Tuesday passed a landmark pension reform bill, moving toaddress the state's crumbling finances in the face of strongpublic labor union opposition to the bill, which among othermeasures raises retirement ages.

The bill, passed in a special session, addresses problemsthat have built up over decades in the nation's worst-fundedstate pension system. Other changes include reducing andsuspending cost-of-living increases and limiting the salaries onwhich pensions are based.

Championed by Democratic and Republican legislative leaders,the bill passed the Senate in a 30-24 vote and the House in a62-53 vote after lengthy and at times emotional debate. It nowheads to Governor Pat Quinn, who supports it.

"This bill will ensure retirement security for those whohave faithfully contributed to the pension systems, end thesqueeze on critical education and healthcare services, andsupport economic growth," the Democratic governor said in astatement.

With the state's finances buckling under a $100 billionunfunded pension liability, Democratic House Speaker MichaelMadigan and others said the bill would save the state about $160billion over 30 years and immediately reduce the unfundedliability by at least 20 percent.

Labor unions called on Quinn to veto the "unfair,unconstitutional bill. If he doesn't, our union coalition willhave no choice but to seek to uphold the Illinois Constitutionand protect workers' life savings through legal action," theunion group We Are One Illinois said in a statement.

The measure will affect nearly half a million current andretired public sector union workers, according to a unionspokesman. Unions argue the law violates a state constitutionalprohibition against diminishing pension benefits.

Senate President John Cullerton, a Democrat, said hewelcomes any court challenges to the constitutionality of thereform measures in the bill.

The affirmative vote came after a failed effort in thelegislature's spring session, a summer of wrangling by a speciallegislative committee, and weeks of closed-door talks among theleaders. It also followed years of discussion and study,previous reform measures that provided limited improvements orfailed to pass, and numerous downgrades of the state's creditratings.

Some lawmakers during the floor debates worried thatIllinois could be in for another round of credit downgradesshould the bill fail. Its passage could brighten the prospectsfor a $350 million bond sale Illinois has planned for next week.

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