Facing an unprecedented unfunded pension liability of $111 billion, the highest in the country, Gov. Rauner, Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkin are calling for passage of a pension reform plan that the leaders said would save taxpayers $1 billion a year.
The Republican leaders are supporting a pension reform plan, first proposed by Democrat Senate President John Cullerton, founded in a “consideration model” that gives government employees a choice in the future benefits. The plan is a refined version of pension reform legislation embraced in 2013 by many Republicans, Democrats and unions leaders—specifically written to comply with Illinois' Constitution.
Under the proposal, employees could choose between keeping compounded yearly cost-of-living adjustments, but their future pay raises would not be calculated into their retirement benefits. Or they could choose reduced cost-of-living adjustments, but their pay raises would be calculated into their retirement benefits.
Senator Bill Brady(R-Bloomington) voiced support for the proposal, saying, "As an architect of the 2013 pension reform bill that passed both legislatures, I understand the critical importance of reducing Illinois' unfunded pension liability. This plan will reduce pension costs for the state of Illinois but won't diminish earned benefits for future retirees."
Gov. Rauner said he believes with the proper wording, this pension reform legislation will be constitutional. Last year, the Illinois Supreme Court threw out as unconstitutional more comprehensive pension reform.
The Republican leaders stressed that if implemented, the bipartisan plan could free up funding for human services, education, and other programs. At this time, nearly 25 percent of the state’s General Funds budget is dedicated to pension payments—almost $8 billion.
Leader Durkin said that if President Cullerton introduces the plan in the Senate, he will introduce the proposal in the House of Representatives.