* Footnote 12 of the Illinois Supreme Court’s pension ruling…
Additional benefits may always be added, of course (see Kraus v. Board of Trustees of the Police Pension Fund, 72 Ill. App. 3d at 849), and the State may require additional employee contributions or other consideration in exchange (see Gualano v. City of Des Plaines, 139 Ill. App. 3d 456, 459 (1985). However, once the additional benefits are in place and the employee continues to work, remains a member of a covered retirement system, and complies with any qualifications imposed when the additional benefits were first offered, the additional benefits cannot be unilaterally diminished or eliminated. See, e.g., Taft v. Board of Trustees of the Police Pension Fund, 133 Ill. App. 3d 566, 572 (1985); Carr v. Board of Trustees of the Police Pension Fund, 158 Ill. App. 3d 7, 9-10 (1987); cf. Kuhlmann v. Board of Trustees of the Police Pension Fund, 106 Ill. App. 3d 603, 609 (1982) (member not eligible for increase in benefits where he had ceased contributing to the pension fund prior to the change in the law). [Emphasis added.]
To my eyes, the footnote seems to imply that Senate President John Cullerton’s “consideration” theory may pass muster. Cullerton would give workers a choice of allowing their raises going forward to be pensionable without the 3 percent compounded COLA or keep the compounded COLA without calculating raises going forward.
Indeed, I talked with Cullerton this morning and he believes that the footnote fully exonerates his approach. His ideas need to be considered as soon as possible. Tick freaking tock, people.
Also, too, it doesn’t look like the Supremes believe that Gov. Rauner’s idea - move all current employees into a Tier 2 system without providing consideration - will pass constitutional muster.
* And speaking of footnotes, the Supremes have in the past refused to order the General Assembly to fully fund the pension systems. However, check out Footnote 3…
Consistent with an earlier opinion by this court in McNamee v. State, 173 Ill. 2d 433 (1996), and comments at the Constitutional Convention, we did not, however, foreclose the possibility that a direct action could be brought by pension system members to compel funding if a pension fund were on the verge of default or imminent bankruptcy. Sklodowski, 182 Ill. 2d at 232-33.
It’s debatable whether state and local pension systems can declare bankruptcy, but the systems could lapse into technical default. If that does happen, the court has staked out its authority to “compel funding” and that footnote was a crystal clear warning shot.