(May 29, 2013) — The latest plan to save one of the US’s worst funded state pension plans may be right on the money – if it’s not deemed unconstitutional.
Estimates have been presented stating that House Speaker Michael Madigan’s pension reform proposal could knock out the entire estimated $187 billion deficit in the state public pension plan bringing it to a 100% coverage ratio over 30 years.
If this sounds like an answer to Illinois’ prayers, it isn’t. Or at least that is the view given by the proposer of another plan to solve the same problem, Senate President John Cullerton, the Chicago Tribune reported.
Madigan’s proposal sees higher staff contributions, an increased retirement age, and potentially lower cost-of-living increases.
President Cullerton’s spokesperson claimed the plans were “unconstitutional” and as such would not make it through court challenges.
Cullerton’s plans would see $57.6 billion wiped off the state’s pension deficit over the next three decades. He maintains they fall within the lines of the constitution, which states that benefits cannot be reduced or diminished.
Either plan would take a year to be agreed and voted upon. However, the state finds itself in the position where each of the proposals has been passed through different parts of the legislative system.
You wait all year for a pension solution…then two come along at once.
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