Beleaguered Chicago taxpayers face short-term gain but long-term excruciating pain after the Illinois Supreme Court on Thursday shot down Mayor Rahm Emanuel’s plan to save two of four city employee pension funds.
“These modifications to pension benefits unquestionably diminish the value of the retirement annuities the members . . . were promised when they joined the pension system. Accordingly, based on the plain language of the act, these annuity-reducing provisions contravene the pension protection clause’s absolute prohibition against diminishment of pension benefits and exceed the General Assembly’s authority,” the ruling states.
“A public employee’s membership in a pension system is an enforceable contractual relationship and the employee has a constitutionally-protected right to the benefits of that contractual relationship . . . Those constitutional protections attach at the time an individual begins employment and becomes a member of the public pension system. Thus, under its plain and unambiguous language, the clause prohibits the General Assembly from unilaterally reducing or eliminating the pension benefits.”
In the short run, Chicago will be off the hook to find $250 million in additional revenue over five years to honor its commitment to stabilize the Municipal Employees and Laborers Pension Funds.