CHICAGO (July 24, 2015) – Today a Cook County judge struck down a 2014 pension law aimed at reforming two of Chicago’s ailing city retirement funds. Illinois Policy Institute CEO John Tillman released the following statement on the judge’s ruling:
“After the Illinois Supreme Court’s disappointing decision striking down the state’s modest effort to bring the pension crisis under control, it’s not surprising that a judge would strike down Chicago’s similar weak attempt at reform.”
“Chicago has made promises to police, firefighters and city workers that were more than its residents ever could afford. For the politically connected, the pension funds have been a cash cow. But for rank-and-file workers, it’s a trap: Police officers, firefighters and other city workers are forced to put money from every paycheck into a pension system that may not be there when they’re ready to retire.
“The police pension fund has just 26 cents in the bank for every $1 that’s been promised in retirement benefits. The firefighters’ pension fund has just 23 cents for every $1 in promises. Forcing them to keep putting money into these funds that are sure to become insolvent is disgraceful.
“It’s no secret the 2014 law did not offer the comprehensive reform Chicago needs. It only affected the municipal and laborers’ pension funds, and left the retirement plans for first responders untouched. It failed on a number of other fronts. But for too many years, the city’s pension crisis was ignored. The 2014 pension law, at the very least, attempted to start the wave of change that the city badly needs.
“The same lesson for the state’s pension funds applies to Chicago. Ultimately, the only way the city can break the cycle of siphoning more and more tax dollars and sacrificing more and more services to pay for pensions is to follow the lead of the private sector and move new employees to a 401(k)-style system. There is no constitutional barrier to establishing a 401(k)-style plan for new hires, and the mayor should implement that immediately. In the near future, calls to change the pension clause in the state constitution or allow the city to file for bankruptcy are imminent.”
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MEDIA CONTACT: Nathaniel Hamilton or Diana Rickert (312) 607-4977
EXPERTS:
John Tillman, CEO of the Illinois Policy Institute
Ted Dabrowski, vice president of policy at the Illinois Policy Institute
Jacob Huebert, senior attorney at the Liberty Justice Center, the Institute’s litigation arm
Darlene Senger, now at Illinois Policy but also a former state representative and former spokesperson for the Personnel and Pensions Committee of the Illinois House of Representatives