Several current and former city workers in Chicago, along with their four labor unions, filed a lawsuit on December 16 against Mayor Rahm Emanuel’s recent changes to their pension plan and health insurance subsidies, calling the pension changes “unfair and unconstitutional” and aiming to prevent them from taking effect on Jan. 1, the Chicago Tribune said.
The lawsuit also seeks to permanently overturn the changes to the municipal retirement system, which serves about 55, 000 retired and current workers for the city.
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The four unions representing current and retired white collar workers, teachers, nurses and teamsters claim Emanuel’s remedy is unconstitutional because it cuts benefits and the state constitution says he can’t do that, Chicago radio station WLS 890 AM said.
The challenge was not unexpected. It mirrors one filed by state workers that recently resulted in a downstate judge striking down changes made to pension plans for state and university workers and public teachers outside Chicago, according to the Tribune report.
But it goes to the heart of the city’s biggest financial woe — four city retirement funds that are about $19.4 billion short of what’s needed to meet obligations and are at risk of going broke within a decade without changes or a massive infusion of taxpayer cash.
Emanuel says the retirement systems are at risk of going broke in the coming years, in which case retirees would get nothing. Without changes to benefits, it would take drastic tax increases, cuts to city services or both to restore financial health to those funds, the Tribune reported.
That’s why, he said, he engineered the changes that the General Assembly made earlier this year to Chicago’s municipal and laborers pension funds, and why he’s still looking for ways to fix the city’s police and firefighter funds. Gov. Pat Quinn signed the legislation in June, the Tribune said.
Emanuel, former chief of staff for U.S. President Barack Obama, became Chicago’s first Jewish mayor in 2011.