State Court Rules: Illinois Pension Law Unconstitutional

A Sangamon County Circuit Court judge in In re: Pension Litigation, found that Illinois’ pension reform law, Public Act 98-059, is unconstitutional. The Court held that the pension reform law “diminished” retiree benefits in violation of Article XIII, Section 5 of the Illinois Constitution, which unambiguously prohibits the diminishment of retiree benefits. The Court ruled agains the State on the affirmative defense claims that it could diminish benefits despite the Article XIII of the Constitution based upon the State’s “reserved sovereign powers or police powers” because according to the Court, the pension protection clause of the Constitution does not provide for any such exception or limitation. The lack of funding for Illinois pensions has resulted in a crisis of over $100 billion dollars. The law was set to go into effect on June 1, but implementation had been stayed pending the outcome of this litigation.

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