Workers face tough pension choices under state plan

Associated Press

SPRINGFIELD — Illinois lawmakers intend to push forward with a plan to cut government pension costs by making employees pay more or accept lower benefits, an idea that outraged a key union Wednesday.

The plan, endorsed by the top Democrat and the top Republican in the Illinois House, would require many state employees to pay about 13.8 percent of their salaries into the pension system to keep their current benefits. Or they could keep more of their money but receive lower benefits at retirement. A third option would be a new 401(k)-style investment plan.

Officials said the savings will depend on which options employees choose. But the amount will be billions of dollars over the years to come, with employees contributing hundreds of millions of dollars more, said Sara Wojcicki, spokeswoman for House Minority Leader Tom Cross, an Oswego Republican.

The American Federation of State, County and Municipal Employees complained that the plan would “slash” the pensions of employees or cut deep into their paychecks.

The union said the average pension is just $32,000 a year, which could be their sole retirement income because many public employees do not get Social Security. AFSCME argues that government employees always contribute their share to retirement systems, while state officials have often failed to meet their obligations.

“Teachers, police and other public employees work hard and play by the rules, but now the politicians want to change those rules and tell public employees they lost the game,” AFSCME spokesman Anders Lindall said.

Pensions represent a major financial problem for Illinois government, which faces vast budget deficits.

Government retirement systems are roughly $80 billion short of the money they eventually will have to pay out. Each year, the state has to come up with billions of dollars to cover the rising costs of benefits and try to make up some of the pension shortfall.

The Illinois Constitution bars reducing retirement benefits for current government employees. The Madigan-Cross plan is likely to trigger a lawsuit if it passes, as unions argue the changes amount to a cut in benefits.

Rep. Tim Schmitz, a Batavia Republican and top negotiator on the issue, said opposition from lawmakers who think the plan is unconstitutional is one of the big hurdles it faces.

“It’s going to take some work,” Schmitz said. “It’s step by step.”

Ÿ Daily Herald staff writer Mike Riopell contribute to the report.