Illinois retiree associations file lawsuits against recent changes to pension system

By Eleanor Black

Various Illinois retiree associations have filed lawsuits challenging the constitutionality of the state’s recent changes to the pension system. These include the Illinois Retired Teachers Association, the Retired State Employees Association of Illinois, Illinois State Employees Association Retirees and the Illinois Association of School Administrators.

The opposition of the pension bill cite specific language in the Illinois Constitution, which states that pension benefits “shall not be diminished or impaired.”

The pension reform of 2013 directly affects retirees — or those soon to be retiring — by reducing their cost-of-living adjustments and increasing the retirement age.

During discussion of the bill, University administration announced its opposition to the proposed changes, which were eventually signed into law on Dec. 5. The University’s Board of Trustees will meet Thursday at the Chicago campus to discuss and vote on various issues, including compensation plans for faculty pensions.

The Illinois State Employees Association Retirees released a statement announcing plans for its class-action suit, made on behalf of retirees from all four of the retirement systems that are affected by the changes. 

“We have concluded our careers, we have made all contributions to the retirement systems that were required of us, and many retirees made life-long plans based on the constitutionally guaranteed payments from those retirement systems,” said Rudy Kink, Jr., executive director of ISEAR. “To pull those guarantees out from under the retirees at this point is absolutely unfair and contrary to the very intent of the pension protection clause in the constitution.”

Kink said before working for ISEAR, he worked for the state’s retirement system for 27 years and found that opinions regarding pension reform were similar to the opposition seen now.

“During the time that I was in the retirement system, we had several opinions from law firms and others that the pension benefit could not be diminished or impaired,” he said. “As time went on and the argument came up about this bill — and eventually led to the passing of the bill — we took the same position that I had been associated with for 27 and a half years, in that you can’t go in and change pension once it’s been granted to the people.”

Ricky Baldwin, chief negotiator of the Service Employees International Union, Local 73, said if the changes are found to be unconstitutional, the pension reform issue would be back to Square 1. He said SEIU would be filing a lawsuit in the near future.

In addition, he said the changes do not help the bigger issue of Illinois’ debt, caused by the state’s failure to pay the legally required amount into the pension plan for years. Baldwin added that this is also because employees will now pay less into the pension system while the interest payments on the debt continue to rise.

For now, Baldwin said retirees are affected most by the current pension bill.

“They don’t have the opportunity to pay anymore, or to switch pensions, or switch to another plan or anything. They’re just stuck,” he said. “These are folks who, most of them, can’t go out and get another job now. Or if they do, it’s going to be a very low paying job.”

Eleanor can be reached at [email protected]