Pensions
11:26 am
Thu July 3, 2014

Ruling Puts Pension Overhaul In Doubt

Credit Illinois Supreme Court

The Illinois Supreme Court says free health care is a protected retirement benefit for certain government employees. It was cause for celebration among those who’ve opposed Illinois' attempts to save money by cutting retirement benefits. But Illinois' pension battles are far from over.

Brian Mackey reports on what the Illinois Supreme Court's retiree health insurance decision means for the effort to reduce government pension costs.

Many state retirees used to get premium-free health insurance. When the law was changed to make them pay, a group of them sued.

In a 6-1 decision, the Supreme Court says the free health insurance is protected by the Illinois Constitution, which says retirement benefits “shall not be diminished."

The court says the framers of the Constitution knew cutting those benefits would be a tempting way to save money.

Labor and others opposed to cutting pensions say the decision is a bad omen for last year’s multi-billion dollar pension savings law.

But state Rep. Elaine Nekritz, a Democrat from Northbrook, says that's premature.

“While that language is troubling, the full gamut of those arguments I think has yet to be considered by the courts,” she says.

The Supreme Court opinion lets the health insurance case proceed in trial court.

Illinois collected 40 million dollars from retirees last budget year, and should collect 86 million dollars this year. But that money has been held in escrow while the case is ongoing.

The case is Kanerva v. Weems, 2014 IL 115811 (click here for a PDF of the opinion).