Pension protections there similar to Illinois

An Arizona Judge recently ruled that pension reform measures that went into effect last year are unconstitutional.

Maricopa County Superior Court Judge Eileen Willett ruled that reforms that increased employees’ contributions into their retirement accounts violated the Arizona State Constitution, which like the Illinois Constitution, specifically references the retirement systems of public employees and prohibits any legislation that impairs “the obligation of a contract.” The reforms increased employee contribution rates from 50 percent to 53 percent of total funding in a move to save the state $60 million.

The Arizona reform measure is similar to legislation sponsored in Illinois by House Republican Leader Tom Cross, which would increase contribution rates from employees without a corresponding increase in retirement benefits. Illinois’ constitution has pension protection language similar to Arizona’s, with language stating "pension benefits ‘shall not be diminished or impaired’".

Eric Madiar, Chief Legal Counsel to the Illinois Senate President, has written an in-depth legal analysis of Illinois’ pension clause, including outside expert testimony regarding the issue. Mr. Madiar’s findings conclude pension benefits for Illinois teachers and public employees cannot be reduced or altered, as such action would be a violation of the Illinois Constitution.

Click here to read an in-depth series on Illinois’ pension systems, including a synopsis of past actions that led to today’s underfunding problem, recent measures to reduce abuse and shore up the pension systems for the future, and proposals to reduce benefits and increase costs for current employees.