Illinois Legislators Eye Pension Pact

Government And Institutions Reuters

Illinois' legislative leaders on Wednesday reached a long-elusive deal to reform the state's woefully underfunded public pensions and are now moving to win the support of their members, their spokespeople said.

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Details were not immediately available.

"The four leaders have reached an agreement on comprehensive pension reform that they will present to their caucuses," said Patty Schuh, spokeswoman for Senate Republican leader Christine Radogno, adding that the final language of the plan was being drafted.

The Democrat-controlled Senate will join the Democrat-controlled House in holding a session on Tuesday to take up a pension measure, according to Ron Holmes, a spokesman for Senate President John Cullerton. House Speaker Michael Madigan put his chamber's members on notice on Monday that they will be meeting for a one-day session.

"The Senate president will be debriefing members of his caucus in the coming days in hopes of garnering support," Holmes said.

Illinois has the worst-funded public employee pension system among the 50 states, with an estimated $100 billion unfunded pension liability. Pension costs are squeezing out funding for core services such as education, and Illinois has been punished by credit rating agenices with downgrades that have left it with the lowest credit ratings among U.S. states.

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Far-reaching changes to Illinois' retirement benefits have been a hard sell in the Senate, where many members are wary of violating state constitutional protections for public employee pensions. Labor unions have pushed back against any effort to impose cuts to pension benefits, though they had offered backing to a Senate bill last spring that would have given workers and retirees a choice in how benefits might be cut.

The state's House and Senate have backed competing proposals, with the House plan taking a more aggressive approach to cost reductions.

Legislative leaders have been seeking ways to boost a projected 30-year savings to $150 billion, up from about $138 billion eyed by a special legislative panel on pensions created in June.

Negotiations have centered on savings that could be achieved through changes to the current 3 percent compounded cost-of-living adjustments for retirees. One proposal would limit such adjustments to half the annual inflation rate, with some compounding of payment increases.