Illinois Governor Pat Quinn has signed pension reform into law.
On Thursday, December 5, 2013 Quinn signed into law a historic legislation that is aimed at removing Illinois’ unfunded liability and fully funding the pension systems. According to the Office of the Governor, Quinn held pension reform as a top priority. Earlier in 2013 Quinn made a motion to suspend Illinois lawmakers’ salaries as well as his own until pension reform was approved.
The new law will require Illinois to adopt a funding schedule that “requires level payments and achieves 100 percent funding no later than the end of fiscal year 2044.” It also grants retirement systems the right to go to court if Illinois doesn’t make required payments to the pension fund.
Current retirees will not see reductions in their pension checks. The amount of money paid into pension by current employees will decrease by one percent.
There will be Cost of Living Adjustments (COLA), but they will increase at a slower rate. Current active employees will see COLA pauses every other year after retirement.
Sponsors and some lawmakers feel that the bill is a step toward getting Illinois’ finances back on track.
“This is a major step forward in putting Illinois on the path to financial recovery,” said Senate Minority Leader Christine Radogno. “It is the result of bipartisan, bicameral negotiations, after a great deal of debate and discussions. It will demonstrate to the credit rating agencies and job creators that we are serious about turning Illinois around.”