Illinois Labor Unions Challenge Pension Law

January 30, 2014 ( – Public labor unions in Illinois are suing the state to challenge a new pension reform law.

Illinois Governor Pat Quinn was named as a defendant in the lawsuit filed by We Are One Illinois, a coalition of unions, in the state’s Sangamon County Circuit Court on behalf of about two dozen retired employees. 

The suit follows several others filed by retirees (see “Retired Teachers Challenge Illinois Pension Reform Law”) and alleges that the pension reforms, signed into law by Quinn in December 2013, violate a clause of the Illinois state constitution that says pension benefits may not be diminished or impaired (see “Illinois Governor Signs Pension Reform Law”). The suit also asks the court to stop the law from taking effect until the case is decided.

The plaintiffs in the suit include retired public school teachers, firefighters, prison workers and employees of various state agencies. In addition to Quinn, the defendants named in the suit include Illinois’ state treasurer, Dan Rutherford, and the state’s comptroller, Judy Baar Topinka, as well as the state’s retirement systems.

According to materials published on We Are One Illinois website, the pension reform law reduces the annual cost-of-living increases for retirees and raises the retirement age for workers 45 and younger, giving some workers the option of freezing their pension and participating in a 401(k)-style contribution plan. It also puts some savings back into the pension funds and directs money from pension bond payments to the retirement systems after those bonds are paid off in 2019.

The law also contains language about a 1% decrease in employee contributions and a funding guarantee, which allows the retirement systems of Illinois to sue the state if lawmakers don’t provide Illinois’ payments to the accounts.