Chicago Public Employees, Retirees and Unions Sue To Overturn Pension Reform Law

Public employees in Chicago filed suit Tuesday, claiming the city’s pension-cutting law is unconstitutional and should be voided. The law in question is scheduled to take effect in the new year and will slash pension benefits for workers and retirees in Chicago’s Municipal Employees Annuity and Benefit Fund and Board of Trustees of the Municipal Employee’s Annuity and Benefit Fund, according to the lawsuit.

The lawsuit, filed in Cook County Circuit Court, argued Public Act 98-0641 violates a provision and “straightforward promise” in the Illinois Constitution that forbids the diminishment or impairment of public employee retirement benefits. The lawsuit stated that the pension reform law, which was enacted in June, unlawfully reduces pension benefits for the plaintiffs and all others who chose a public-service career.

“Unless this court strikes down and enjoins implementation of the Act, Plaintiffs and thousands of other current and retired City of Chicago and Chicago Board of Education employees will be harmed and the trust that all Illinois citizens place in the inviolability of their Constitution will be breached,” the lawsuit stated.

The plaintiffs, comprised of 12 current and former workers and four unions, requested the court declare Public Act 98-0641 entirely “unconstitutional, void and unenforceable.” Current retirees will suffer immediately, while the same “injustice” awaits current public workers when they retire, according to the lawsuit.

Chicago Mayor Rahm Emanuel said the law was created with the support of many unions and is both constitutional and necessary to ensure 61,000 city workers and retirees receive pensions. “Without this reform, these two funds will run out of money in just a matter of years, which is why we must defend this law to protect the future of our workers, retirees, and taxpayers,” Emanuel said in a statement.

Chicago has the worst-funded pension system among major U.S. cities, while the state of Illinois has the worst-funded state pension fund among U.S. states. Public Act 98-0641 attempts to relieve the city’s pension-funding burden. A similar argument in a separate case led to a court ruling last month that deemed Illinois’ 2013 pension reform law unconstitutional. The ruling has since been appealed and the Illinois Supreme Court is scheduled to hear the state’s arguments in March, according to the Chicago Tribune.