Seth Perlman, File, Associated Press
SPRINGFIELD, Ill. — Gov. Pat Quinn called for public employees to retire later and pay more into their pension funds to help close a massive shortfall that he acknowledged Friday was largely created by the poor decisions of Illinois' leaders.
Quinn wants to raise the retirement age to 67 for state employees, downstate and suburban teachers, college employees and other workers enrolled in state retirement systems. He also wants a 3 percent increase in the amount they contribute to the pension funds.
Annual cost-of-living increases for retirees should be cut to 3 percent or half the rate of inflation, whichever is lower, he added.
Quinn also proposed making school districts and colleges contribute to the retirements of their employees instead of having state government cover that expense. Currently, Chicago is the only place that contributes to the pensions of its teachers.
Public-employee unions quickly rejected the proposal, calling it unfair and unconstitutional.
"Considering that the subject at hand is the ability of hundreds of thousands of Illinoisans to support themselves in retirement, we believe the proposals are insensitive and irresponsible," said a statement from the We Are One Illinois labor coalition.
Illinois' retirement systems are among the country's worst-funded ones, and are roughly $85 billion short of what's needed to pay pensions in the decades to come. In addition, the amount that state government is obligated to contribute to the funds increases further each year.
Quinn proposed a new payment schedule that he said would completely erase the funding shortfall over the next 30 years. The Chicago Democrat said the state's past failures to pay its fair share of pension costs helped create the shortfall, but he expressed confidence that state government would meet its obligations in the future.
The Illinois Constitution bars reductions in government retirement benefits. To get around that, Quinn proposed keeping the current pension plan while creating a new one with the increased costs and retirement age.
Employees could choose to stay in the original pension plan, but Quinn would then cut other benefits that aren't constitutionally protected, such as health care subsidies and counting future raises in pension calculations.
"Forcing public servants to choose between two sharply diminished pension plans is no choice at all," Illinois AFL-CIO President Michael Carrigan said in the labor coalition's statement.
Republican legislative leaders said they like much of what Quinn had to say but were concerned about shifting costs to school districts, universities and community colleges. They said that would be a $1 billion blow.
"To me, that is a tax increase," said House Minority Leader Tom Cross, R-Oswego.
Quinn repeatedly pointed out that the pension problems began long before he came to office.
"I did not create the problems, but I'm here to solve those problems," he said at a news conference held in Chicago.
"I know I was put on earth to get this done," Quinn added.
Associated Press reporter Tammy Weber contributed to this report.
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