Quinn signs pension revamp

State will save billions because benefits will be lower for new employees, governor says

Wednesday, April 14, 2010

Democratic Gov. Pat Quinn affixed his signature onto a pension reform package Wednesday, saying the state will save billions of dollars because benefits will be lower for new employees, who will have to work longer to collect their retirement checks.

While union leaders complained the new law doesn't address Illinois' $77 billion shortfall in the government employee pension systems, it is expected to save taxpayers money in the coming decades on retirement costs for teachers, lawmakers and many public servants throughout state government, universities, cities, counties and park districts.

"It's imperative to show the taxpayers we're serious about saving money," said Quinn, who signed the legislation, which was muscled through the General Assembly last month in a single day despite union opposition.

The savings are expected to come from increasing the general retirement age to 67 from 62 or lower in many cases. To get full benefits, new employees will have to work at least 10 years and wait until 67, though a smaller benefit will be available for those who choose to start taking pension checks at age 62.

The state also will limit the salary level on which pension benefits are based to no more than $106,800 a year, rather than allow the so-called Cadillac pension plans that can now pay out more than twice as much.

The law also strikes at one form of double-dipping by banning new public employees from getting a pension from one government job while collecting a salary from another. It will base pensions on an average of the last eight years of service rather than the last four years.

Quinn's Republican challenger, Sen. Bill Brady of Bloomington, believes the pension reforms did not go far enough, suggesting 401(k) retirement plans should be considered for future employees instead of a standard pension plan, said Brady spokesman John Hoffman.