Springfield, IL – Illinois Governor Pat Quinn signed into law a bill to overhaul the state's pension system. He says it will save $220 billion over a 35 year period.
The law trims benefits for any state workers hired after January 1, 2011. It caps the maximum pension benefit and raises the retirement age.
Quinn called the action "historic" and says it could convince people to support an income tax increase for education.
"From the moment I took office, I have worked to overhaul Illinois' pension system to provide relief to taxpayers while protecting the savings of Illinois retirees," said Quinn during the signing ceremony. "This effort was realized when the General Assembly passed a major and unprecedented public pension reform bill, and I am proud to sign it into law."
The governor's office says the new law eliminates the 3% annually-compounded cost-of-living rate increase and replaces it with simple interest raises of half the consumer price index (CPI) or 3%, whichever is lower.
The legislation also forbids the practice of pension "double-dipping," in which someone receives a public pension while drawing a salary from a different public system.
Labor unions opposed the measure and point out it does nothing to pay Illinois' current outstanding pension liability of $80 billion.
Thanks to Illinois Public Radio and the Illinois Associated Press