Illinois Gov. Bruce Rauner proposed to move some state employees to the “tier two” pension plan in his budget address Wednesday.
In the speech before a joint session of Illinois' General Assembly, Mr. Rauner said the top priority for the state, which has the lowest credit rating of any state in the U.S., “must be the pension system.”
Mr. Rauner said the pension system, “which is currently $111 billion in the hole (is) the worst pension crisis in America.”
He said of his plan, “If you are retired, you get everything you were promised. That is fair, that is right. But moving forward, all future workers should be under the tier two pension plan except for our police officers and firefighters.”
“This budget also gives employees hired before 2011 a choice to take a buyout option — a lump-sum payment and a defined contribution plan in return for a voluntary reduction in cost-of-living adjustments,” Mr. Rauner said, adding that the reforms would yield $2 billion in savings in the first year.
Mr. Rauner said it must be the top priority regardless of an upcoming Illinois Supreme Court decision regarding previous reform legislation, which a Sangamon County Circuit Court judge ruled in November was 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.”
Further information on Mr. Rauner's plan was not immediately available.
