ML-Implode News - Chicago's Plan to Overhaul City Pensions Dashed by Top Court

The Chicago plan, passed in 2014, violates the Illinois Constitution, which bars the diminishing of public pensions, the court said Thursday. The finding upholds a lower court decision from July and follows a similar ruling by the Illinois Supreme Court last May preventing changes to the state's pension funds.
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The ruling in the Chicago case impairs Mayor Rahm Emanuel's efforts to pare a deficit that threatens the city's solvency. The defeat leaves officials racing to devise new ways to shore up retirement system, though it will also save money in the short term because the overhaul required the city to boost contributions to its municipal and laborers funds. The two cover about 60,000 workers and retirees.
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The court's ruling comes almost 11 months after it unanimously struck down a 2013 law to alter Illinois's retirement system, saying the changes to solve the state's $111 billion pension shortfall violated constitutional protections of workers' benefits. That holding led Moody's Investors Service to cut Chicago's credit rating to junk in May, citing the increased risk that the city's law would also be thrown out.

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Chicago's Plan to Overhaul City Pensions Dashed by Top Court