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REGARDING PUBLIC ACT 98-0599
Press Release Issued January 2, 2014
For Immediate Release
RETIRED STATE EMPLOYEES
ASSOCIATION FILES LAWSUIT CHALLENGING LAW REDUCING PENSION BENEFITS
The Retired State Employees Association (RSEA), an
association of over 9,000 dues- paying retired State of Illinois
workers, today filed suit in Sangamon County challenging the
recently-enacted law, Public Act 98-599, that reduces future pension
benefits for retired members of the State Employees Retirement
The lawsuit, Retired State Employees Association et al. vs. Patrick
Quinn et al., No.
2014 MR 1, names Governor Quinn, Comptroller Judy Baar Topinka,
Treasurer Dan Rutherford, and the Board of Trustees of the State
Employees Retirement System as Defendants. In addition to the RSEA,
the complaint names four retirees as class plaintiffs representing
over 60,000 retirees in a class action against these same
defendants. There is also a subclass named of the more than 10,000
State workers who purchased extra service credits and took early
retirement in 2002 and other years.
The Complaint alleges that that PA 98-599, which was fast-tracked
through the General Assembly as Senate Bill 1 and signed by Governor
Quinn in December, 2013, violates the Pension Protection and
Impairment of Contracts Clauses of the Illinois Constitution of
1970. The lawsuit also contends that PA 98-599 violates the Equal
Protection Clause of the Constitution because while impairing
pension rights in all the other major State pension systems, the law
exempted the Judges' Retirement System from its coverage without any
rational basis. The Complaint seeks a declaration that the PA 98-599
is invalid as well as the creation of an escrow fund into which the
State will, while the case is pending, pay the difference between
what the SERS retirees would have received in benefits under the
prior law, and what they will receive under the new law, which takes
effect on June 1, 2014.
The main focus of the Complaint is the new law's gutting of the
automatic annual increase in benefits that have been a feature of
the pension laws since 1970. For 43 years, State workers have paid
for this benefit with payroll deductions which the law required the
State to match. The lawsuit contends that the State has abused SERS
by underfunding it, including such gimmicks as "pension holidays,"
resulting in SERS declining from being over 80% funded in the year
2000 to being only 43% funded in 2012.
"The RSEA is proud to have taken this important first step on what
promises to be a long journey through the courts. For too long, our
members have had to endure being scapegoated for the State's
financial problems," said RSEA President Bruce Strom. "The complaint
demonstrates not only that the General Assembly has violated the
Constitution, but has ignored its own statutes in using money owed
to SERS and other pension systems to fund daily operations of State
government," he added.
A copy of the complaint is available on request. The defendants will
have 30 days to respond after they are served with legal process.
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