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Chicago Park District pension reform bill heads to Quinn’s desk

Illinois Gov. PQuinn

Illinois Gov. Pat Quinn

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Updated: December 9, 2013 10:59AM

SPRINGFIELD-Bowing to Mayor Rahm Emanuel, the Illinois Senate overwhelmingly voted to reel in pension benefits for current and former Chicago Park District employees Thursday despite opposition from the agency’s largest union.

The Senate’s lopsided 46-4 vote, with four members voting present, sends the fast-tracked package to Gov. Pat Quinn and hands the mayor a legislative win in Springfield with potentially broader ramifications.

The plan, sponsored by Senate President John Cullerton (D-Chicago), serves as a possible template for the mayor to address funding woes in the city’s other underwater pension systems. It passed the House Wednesday.

“We should pass this bill and recognize the fact this pension system has come together to try to improve their finances,” Cullerton said.

Quinn’s office offered no clue Thursday as to whether the governor will sign the legislation, which drew opposition from SEIU Local 73, which donated close to $29,000 to the governor since 2005.

SEIU spokesman Adam Rosen said the union is “totally against” scaling back annual increases for retirees and insisted current workers shouldn’t shoulder the entire burden of fixing the park district’s underfunded pension system.

“No retiree has done anything wrong . We’ve always put in our pension contribution. We’re trying to help the process along, but current employees should not be impacted by this legislation,” Rosen said.

It was not clear whether the union, citing constitutional protections against the diminishment of pension benefits, would sue to block the legislation if Quinn signs it.

But Cullerton acknowledged that possibility on the Senate floor.

“It is true there are some unions . . . are saying they’re opposed to the bill, and I assume that’s because they’re taking the position the bill is unconstitutional. But as I said on a number of occasions, we in the Senate are not the Supreme Court and unless we can pass a bill someone can challenge, we’re never going to know,” he said.

Under the plan, the retirement age for existing employees under 45 would jump from 50 to 58. Employees’ payroll deductions for pensions would jump from 9 percent of their salaries now to 12 percent by 2019.

Retirees, who now receive non-compounding annual increases of 3 percent, would see their annuities grow by the lesser of 3 percent or one half of the rate of inflation under the legislation.

The park district, meanwhile, would commit to making supplemental contributions of $12.5 million in both 2015 and 2016 and $50 million in 2019.

The park district pension fund, which has about 6,100 current and former employees as members, was about 43 percent funded as of last December with $421 million in assets and $971 million in liabilities. The legislation would seek to get that funding level increased to 90 percent.

SEIU represents about 2,100 of the affected park district pension members.

In Washington, the mayor said the pension solution crafted for the Chicago Park District pending in Springfield could be applied to the City Of Chicago pensions.

“The short answer is yes,” Emanuel told the Chicago Sun-Times.

“It combines the basic building blocks of reform with revenues. And it gives the workers a level of certainty they don’t have, they did not have before, they will have now, and it gives taxpayers the certainty that they need in the sense of going forward.”

He added, “And all the parts of reform that you need to sustain the plans’ financial stability are there and all the parts from a revenue side are there.”

Asked if he will try to apply the Park District deal to city pensions, Emanuel said, “I’ve always said to anybody who wants, our door at City Hall is always open to find a solution, a workable solution. You got to come forward because we got to solve this together.”

Emanuel said “revenue and reform are partners; can’t separate them.”

For any pension fix going forward, the plan has “got to bring them together; retirement security for workers with certainly for taxpayers that they are not going to try to bear the brunt, rather bear the burden by themselves.”

The reason the Park District plan can be applied to the city pensions, Emanuel said, is because, “It has the fundamentals of reform and revenue that are needed to put any one of our plans on a trajectory to retirement security and sustainability.”

He was asked if the Park District compromise come out of his office or the Park District.

“All working together,” Emanuel said.

Emanuel was in Washington to keynote a session of the World Bank Global Learning Event where he highlighted the City Colleges of Chicago programs linking education curriculums to jobs in the city.

Lynn Sweet reported from Washington D.C.

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