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Push to Cut Government Worker Pensions Fizzles at Capitol

May 31, 2011

By Ray Long
Chicago Tribune

SPRINGFIELD --- State lawmakers today decided to drop efforts to pass two of the session's most contentious bills --- cutting government worker pension benefits and health care for retired state employees.

House Republican leader Tom Cross said he will hold hearings over the summer on the issue of reducing the future pension benefits of current state employees.

Cross led efforts to set up a new pension system in which current employees could opt for one of three choices: keep their current pension benefit and pay more, take a smaller benefit but pay the same or join a self-managed plan similar to a 401(k) retirement fund.

Oswego's Cross, whose co-sponsor was Speaker Michael Madigan, D-Chicago, said an overhaul of pension benefits for current employees is "essential to the state's well being."

But the plan ran into opposition. Retirees questioned how much it would cost and critics questioned whether shifting pension plans would be constitutional.

Also on the shelf until at least the fall session is Sen. Jeff Schoenberg's proposal to make most retired state workers make health care payments based on their years of service and the size of their state pension checks.

"We simply can't afford to do nothing because, otherwise, co-payments will go up sharply across the board and the caliber of the benefits will be sharply reduced," said Schoenberg, D-Evanston.

Posted at 02:47:44 PM in Legislature, Pension issues

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Frequently Asked Questions

Q: Why are some calling for Illinois to switch from a defined benefit to defined contribution system?

A. As of 2011, Illinois faces an unfunded pension liability that exceeds $80 billion, one of the largest in the nation. Calls have been made to switch Illinois from its current defined benefit system to a defined contribution system due to misunderstandings regarding the sources of this large debt and the effects of a system switch.

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