Text Size
Login
config
  • vtem news box
  • vtem news box
  • vtem news box
  • vtem news box
  • vtem news box
  • vtem news box
  • vtem news box
  • vtem news box

History of pension funding shortfall explored: It’s gone on longer than you might think [UPDATED - 01/26/15]

The Great Pension DebateEarlier this year, Eric Madiar was asked a simple question about the state’s pension systems and their chronic underfunding. Madiar, the former chief legal counsel for Illinois Senate President John J. Cullerton, was asked how long this underfunding had been going on.

That basic question sparked a research project that tracks records back nearly a century to find the answer and explore what it all might mean to current pension reform efforts. The final report was recently published at www.kentlaw.edu. You can read it here.

Madiar also summarizes his report in an accompanying op-ed.


For the past several years, one of the Illinois General Assembly’s primary focuses has been addressing the state’s unfunded pension obligations.

The issue is complicated: The Illinois Constitution has a clause specifically protecting public employees’ earned pension benefits.

The issue is contentious: Illinois’ public employees and retirees are understandably concerned about their retirement incomes.

The issue is important: Paying down the state’s pension obligations is expensive, and the money going to pay for pensions can’t be used to fund education and other areas taxpayers and lawmakers deem high priorities.

The purpose of this page is to catalogue important studies and publications relating to the legal debate over what the state can and cannot do to address its pension obligation. These are some of the key legal briefs and arguments the members of the General Assembly are using to craft pension legislation and to consider what they legally can and cannot do. Read on to learn in great detail what’s happening with Illinois’ public employee pensions.

• Review a comprehensive legal and historic analysis of the 1970 Constitution’s pension clause written by Eric Madiar, Senate President John Cullerton’s chief legal counsel. In this report, you will find a history of the convention debates and discussions, media perspectives of the time, what the courts have said throughout the past 40 years, as well as an analysis of recent arguments from Sidley Austin LLP and Gino DiVito.
Note: If you don’t want to read the whole thing, you can also review the abstract. If you want to know more, here are Mr. Madiar’s appendices.

• Read the full text of the 1905 speech given by Franklin MacVeagh, former President of the Commercial Club of Chicago and U.S. Secretary of Treasury, on the importance of honoring one's contracts, his views on labor unions, and other significant matters.

• In 2010, a number of respected lawyers and law firms released memorandums and analyses of Illinois’ pension situation. These documents are some of the most important items referenced in Mr. Madiar’s analysis:

• Read what law firm Sidley Austin LLP believes will happen if Illinois’ retirement systems go broke in this guarantor memo and this supplemental guarantor memo.

• Want to know if the General Assembly can force workers to pay more of their income for the same level of benefits? The law firm DLA Piper says no in this memo, and the law firm Jenner & Block says no in this memo.

• Learn more about the history of the pension crisis in this Chicago Tribune article from December 2013.

Photo of the Day

POTD04272017AM4626
#HeyGov

News Releases

IMAGE Measure to allow college savings accounts to purchase computers passes
Friday, 28 April 2017
SPRINGFIELD – College students needing to buy a new computer for school use or who utilize special needs services could soon be able to use...

Read More...
IMAGE Tom Cullerton passes measures to help combat veterans’ suicide epidemic
Friday, 28 April 2017
SPRINGFIELD- State Senator Tom Cullerton (D-Villa Park) has advanced plans to tackle issues found during the Veterans Suicide Taskforce hearings....

Read More...
IMAGE Link easing process for MS patients' treatment
Friday, 28 April 2017
SPRINGFIELD – People struggling with multiple sclerosis could have an opportunity to ask for an exception to treatment limitations due to...

Read More...
IMAGE Bennett: Permanent property tax freeze would squeeze local schools
Friday, 28 April 2017
SPRINGFIELD – A permanent property tax freeze from Springfield will only squeeze local schools and park districts according to one Illinois...

Read More...
IMAGE Stadelman passes legislation to help domestic violence victims leave
Friday, 28 April 2017
SPRINGFIELD – State Senator Steve Stadelman (D-Rockford) secured passage of legislation today allowing domestic violence victims to continue...

Read More...
The Great Pension Debate
subscribe 1
TaxButton