Quinn plans pension-reform announcement Friday

Friday, April 20, 2012

SPRINGFIELD, Ill. — Illinois Gov. Pat Quinn will propose that workers who get state pensions pay more toward their retirement and accept more modest cost-of-living increases when he lays out ideas Friday for cutting an $85 billion funding problem in the pension system, lawmakers said.

The Democrat confirmed Thursday that he will roll out his plan on the heels of another major budget-relief announcement on Medicaid health programs. He wouldn't comment on what the pension announcement includes.

But legislators on a committee assigned to suggest fixes to the severely underfunded retirement program said they were told Quinn wants workers to put more of their paychecks toward their nest eggs, though they wouldn't provide specifics. The plan will also call for an adjustment to cost-of-living increases for retirees.

"That's the biggest cost-driver for the state," Rep. Elaine Nekritz said of COLAs. "You have to follow the money."

Quinn, whose plan will also include a 30-year schedule for catching up on the funding backlog, according to the legislators, will forge forward even though the committee advised the governor's office they had not reached agreement on a complete package of reforms. They intend to keep working.

Sen. Michael Noland, D-Elgin, said Quinn aide Jerome Stermer told the committee about other proposals the governor will make, but the lawmakers would discuss only those that had committee agreement: increased contributions, cost-of-living adjustments, and the 30-year plan.

Stermer would not comment Thursday afternoon. Noland said the committee agrees money saved in the effort should go toward paying down the unfunded liability.

"That money, that relief that we gain through the reform has to go toward relieving the obligation that we have," he said.

Sen. Bill Brady, a Republican committee member from Bloomington, said the plan will include the "best mix" of ideas, including an adjusted COLA that "we can afford" but which "maintains the value of the pensions."

Lawmakers have noted that some proposed changes must pass a test that pension benefits not be unconstitutionally diminished. A coalition of union groups that represent pension-covered employees declined comment Thursday but stressed in a statement last week that solutions must be constitutional and fair to public employees.

Quinn will wade into the pension mess after delivering tough news about Medicaid on Thursday, when he outlined a list of cuts and tax increases to save $2.7 billion in the program that provides health care for the poor.