Pensions
7:20 am
Tue January 7, 2014

Don't Bank On Pension Savings Just Yet

House Speaker Michael Madigan sponsored the pension overhaul, which state employees' and teachers' unions say unfairly cuts their benefits.
House Speaker Michael Madigan sponsored the pension overhaul, which state employees' and teachers' unions say unfairly cuts their benefits.
Credit Amanda Vinicky/WUIS

With the new year comes the annual process of crafting a new state budget.  Money will be tight, despite a pension law that's supposed to save $160 billion dollars over the next 30 years.

Legislators who voted to cut state employees' and teachers' retirement benefits say they had no choice. Nearly a fifth of the state budget was going into Illinois' pension systems. Meaning there was less money to spend elsewhere. The pension law is supposed to ease that so-called "squeeze."

But Democratic House Speaker Michael Madigan has made clear -- Gov. Pat Quinn should not factor in the pension law's savings when he introduces a new spending plan, because he expects the courts will order a stay: "So all of the changes that will bring on cost savings just won't go into operation, until we get an order from the Supreme Court," Madigan said.

That's echoed by Republican Treasurer Dan Rutherford:

"As a prudent steward of state resources, I would be very hesitant on booking these savings until the final disposition of it is known," Rutherford said.

Already, two lawsuits have been filed, and more are expected. Unions say the law defies a clause in the state constitution that says pension benefits shall not be diminished.