Illinois House takes small 'first step' on pensions

SPRINGFIELD - It's not the full-fledged reform of the Illinois pension system that many lawmakers have called for, but the state House did take a small step in that direction Friday.

With no votes in opposition, the House approved a proposal to downsize pensions for future legislators and judges - a move that supporters said could save an estimated $22 million a year at a time when Illinois owes roughly $78 billion to all of its pension systems.

The plan applies only to judges and lawmakers, representing just a fraction of the vast population of government employees covered by public pensions, but supporters called it a "first step" toward reforming the entire system.

The proposal would raise judges' and lawmakers' retirement age to 67 from 55. It also would decrease the salary percentage that pensions could be based on, as well as the base salary amount itself.

State Rep. Roger Eddy, a Republican from Hutsonville, said that although reform for all state pensions is the ultimate goal, he supported the idea of starting internally.

"I think it's important that we take action on our own systems before we begin the hard work ahead of us related to other public pension systems," Eddy said. "This is a good first step."

Gov. Pat Quinn echoed that sentiment at a suburban appearance Friday afternoon. The governor has recommended putting all new public-sector employees in a less lucrative pension plan and said he hoped this legislation would spark action.

Although future lawmakers and judges under the proposal still could opt to retire at age 62 instead of the proposed age of 67, doing so would result in "substantially reduced" benefits, said state Rep. Kevin McCarthy, a Democrat from Orland Park who sponsored the legislation.

McCarthy said that applying the rules to current officeholders could garner greater savings, but the potential for lawsuits tying up reform prevented the proposal from working retroactively.

"I think this will still be a very attractive job," McCarthy said.

Eddy highlighted Friday what he said was one of the most widely embraced aspects of the reform: A cap of $106,800 on the portion of a salary a pension could be based on - a figure that will grow with inflation. While most lawmakers don't make that, most judges exceed it.

Eddy also told lawmakers not to put off further payments to the pension system just because the new rules could alleviate some financial pressure.

"We have to - make sure we address both parts of this: Modernization and stabilization. These are modernizations. Stabilization comes when we make the entire payment to the system," Eddy said.

Some critics have argued that less attractive pensions might deter qualified professionals from taking those jobs. McCarthy said, however, that the plan still would ensure a judge an annual pension of nearly $70,000 after 20 years, which is better than what most people are facing.

He said his proposal still calls for a pension rather than a 401k-style system like most private-sector retirement packages, but called it a "much less lucrative" pension.

In addition to decreasing the percentage of a salary used to calculate a pension to 60 from 85 percent, lawmakers and judges under the new system would need to work for at least eight years. Currently, they can qualify for a pension with as few as four years of service.

The proposal now goes before the state Senate for consideration.

Daily Herald staff writers Joseph Ryan and John Patterson contributed to this report.