As the spring legislative session nears its May 31 end, the state’s most-pressing issue is still unresolved.
Real pension reform still has not passed, and this week has brought about dueling plans between Senate President John Cullerton, D-Chicago, and House Speaker Michael Madigan, D-Chicago.
Madigan’s plan, which gained House approval last week, clearly is the better of the two plans.
Cullerton’s plan is backed by public unions. It gives workers and retirees a choice of benefit packages. If you want health insurance in retirement, your cost-of-living adjustment is smaller. If you choose to keep 3 percent cost-of-living increases compounded annually, you wouldn’t get health insurance.
Cullerton said his plan would result in a pension payment in 2015 about $850 million less than it is today and would stand up to constitutionality challenges, although it is likely either plan will end up in court. It hardly puts a dent in the state’s unfunded pension liability. Taxpayers would be on the hook to make up for the plan’s shortcomings.
On the flip side, the 2015 payment in Madigan’s plan would be $1.8 billion less than it is today. It is a more comprehensive set of reforms, which is why opponents fear its constitutionality.
We like that Madigan’s plan caps the 3 percent cost-of-living adjustment to $1,000 per year of work, but think the percentage increase is too high. We like that it raises the eligibility to receive COLAs to either age 67 or five years after retirement, whichever comes first. We like that the plan raises the retirement age for current employees younger than 45.
We think public employees should pay more toward their pensions. Madigan’s plan increases by 2 percent what employees must contribute to their pensions.
We don’t like that Madigan’s plan continues to exclude judges’ pensions. But when you pit Cullerton’s plan against Madigan’s plan, Illinois is better off with the House Speaker’s legislation.