state's General Assembly has gathered for a special session to deal with the
State Retirement System of Illinois' $83 billion in unfunded liabilities.
(August 15, 2012) -- Governor Pat Quinn has set a vote for August 17 on a bill for dealing with the state’s pension, which is the worst funded in the nation.
“This is a date with destiny for our state,” Quinn said. “We have to deal with this. We can’t just shuffle it under the rug and pretend it doesn’t exist. It’s an $83 billion [unfunded] liability for Illinois.” (This is the official figure. The Illinois Policy Institute, an economic think tank, estimated the total state and local retirement debt to be $203 billion.) “I’ve tried to make it very clear that our state is now spending more on pensions than on education,” Quinn said.
Friday’s vote will be on pending reform legislation that is currently before the House of Representatives. The bill in question would overhaul the benefit structure and funding mechanism for state workers' pensions, but not teachers or university employees. Under the current system, the state will have $32 billion of unfunded liability by 2045. The proposal would require all active and retired state government workers to choose between two options: accept a cut to the yearly cost of living adjustment and retain access to state-supported health insurance, or maintain the current 3% cost of living adjustment, compounded annually, but lose some access to state-supported health insurance.
Both Republican and Democratic leaders agree on reducing liabilities by boosting the retirement age and limiting the cost of living adjustments, according to ABC reports. Republicans, however, oppose shifting the cost of suburban and downstate teacher pensions from the state to local school districts, fear property tax increases.
“To put it in perspective,” Quinn said, “someone who retired from state employment in 1992 with a $60,000 pension, today under the current rules is getting $120,000.”