Courtesy of Mish.
Pension news out of Chicago keeps getting worse.
In 2013, the Illinois legislature took a feeble stab at fixing some small aspects of the Illinois pension problem.
The legislation, signed by then Governor Pat Quinn reduced the 3 percent compounded cost-of-living adjustment for retirees established in 1989, raised the retirement age for workers 45 and under, and imposed a limit on pensions for the highest-paid workers.
That was a step in the right direction, albeit a small one.
2013 Pension Reform Unconstitutional
Today we learn the Illinois Supreme Court Finds 2013 Pension Reform Law Unconstitutional.
In a unanimous decision, the seven justices declared the law passed 18 months ago violates the state constitution because it would leave pension promises “diminished or impaired.”
“In enacting the provisions, the General Assembly overstepped the scope of its legislative power. This court is therefore obligated to declare those provisions invalid,” Justice Lloyd Karmeier said in writing the court’s opinion.
Analysis
State rep Rep. Elaine Nekritz, D-Northbrook hits the nail on the head with her analysis. “In its ruling today, the Supreme Court struck down not only the law but the core of that balance. Now our already dire pension problem will get that much worse and our options in striking that balance are limited. Our path forward from here is now much more difficult, and every direction will be more painful than the balance we struck in Senate Bill 1.”
Underfunding Just Got Worse
On Tuesday, I noted the dire state of Illinois pensions on CNBC with Rick Santelli. (See Chicago Board of Education to Default on Bonds? Rick Santelli and Mish Discuss on CNBC).
Here’s a video clip. …
