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Pension Benefits “Reform” Update: Proposed Amendment to the Illinois Constitution

October 8th, 2012

A proposed amendment to the Illinois Constitution will be on the November 6th ballot.  The ballot question will simply ask the voter to vote yes or no “For the proposed addition of Section 5.1 to article XIII of the Illinois Constitution.”  But what does adding Section 5.1 to the Illinois Constitution entail?

Ostensibly, the proposed amendment will require a 3/5 supermajority vote of the General Assembly to pass any bill that provides for a “benefit increase” under any pension or retirement system of the State, unit of local government, or school district.  It also requires a 2/3 vote to override a gubernatorial veto of any bill containing a “benefit increase”.   However, closer inspection of the lengthy text of the purpose amendment reveals additional changes.

First, new language added as proposed Section 5.1(d) states that nothing in this section shall prevent the passage of any law that further restricts the ability to provide a “benefit increase”.  This potentially conflicts with existing Constitutional protections for pension benefits already found in Section 5 which provides that pension benefits “shall not be diminished or impaired”.  Some have interpreted this new language to be a back door giving the legislature the ability to decrease existing pension benefits.

Secondly, it is important to note that the 3/5 supermajority requirement applies to local government agencies (including pension boards) not just benefit increases initiated at the State level.  At the local level, this proposed requirement would apply to both “emolument increases” and “beneficial determination” actions.

Critics of the proposed amendment argue that it is confusing and ambiguous, has the potential to be applied to the detriment of existing benefits, will result in extensive litigation over its application and does nothing to address the real financial problems facing pensions in Illinois.  Proponents state that the amendment will foster a more bipartisan approach to pension reform due to the supermajority requirement needed and will prevent “sweetheart” pension packages for well-connected individuals as seen in the past.

The proposed amendment will appear on the November 6th ballot and will become law if approved by three-fifths of those voting on the question or a majority of those voting in the election.

Below is a fact sheet regarding HJRCA 49:

HJRCA 49 Fact Sheet