A Sangamon County Circuit Court judge ruled Friday that Illinois' pension reform law passed last year is unconstitutional.
Judge John Belz sided with employee and retiree organizations that argued that the law, passed Dec. 3, 2013, violates the state's constitutional clause that pension benefits “shall not be diminished or impaired.”
“Because the act diminishes and impairs pension benefits and there is no legally cognizable affirmative defense, the court must conclude that the act violates the pension protection clause of the Illinois Constitution,” Mr. Belz wrote in his ruling.
Spokesmen for Gov. Pat Quinn and Attorney General Lisa Madigan said the pension law, aimed at saving $160 billion over the next 30 years, was urgently needed to resolve the state's $100 billion pension funding crisis.
Attorneys for the state argued pension benefits could be altered in such crises.
“We plan to immediately appeal the decision to the Illinois Supreme Court so that we can obtain a final resolution of these important issues and allow the governor and General Assembly to take any necessary action,” Ms. Madigan said in an e-mailed statement provided by Mary Hopkins, executive secretary. “We will ask the court to expedite the appeal given the significant impact that a final decision in this case will have on the state's fiscal condition.”
“We're confident the Illinois Supreme Court will uphold this urgently needed law that squarely addresses the most pressing fiscal crisis of our time,” said Grant Klinzman, spokesman for Mr. Quinn, in an e-mailed statement.
The law decreases cost-of-living adjustments, caps pensionable salaries and raises retirement ages. It also decreases employee contributions by one percentage point, creates a defined contribution plan for a portion of employees and gives the five state retirement systems authority to sue the state to compel it to make required pension contributions.
The law had been slated to go into effect June 1, but was put on hold by Mr. Belz to determine its legality.
“We welcomed the opportunity to make our case that the Illinois Constitution means what it says, and the pension clause is absolute,” said Sean Smoot, principal for one of the plaintiffs, We Are One Illinois, in an e-mailed statement. “Our unions have long argued that the state cannot simply choose to violate the Constitution and diminish or impair retirement benefits if politicians find these commitments inconvenient to keep.”