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Judge Strikes Down Landmark Illinois Pension Reform Law

SPRINGFIELD, Ill. — An Illinois judge ruled Friday that a law intended to fix the nation's worst state employee pension crisis violates the state constitution, handing a victory to state employees and retirees who sued to block the landmark overhaul. The overhaul had been approved by lawmakers and Democratic Gov. Pat Quinn last year. Years of underfunding had put the state's pension systems roughly $100 billion short of what they need to cover benefits promised to employees. Quinn's office released a statement saying it anticipated legal challenges and would urge the Illinois Supreme Court to take up the matter quickly.

If the ruling by Sangamon County Circuit Judge John Belz is upheld, lawmakers would have to go back and come up with another plan. That would be yet another financial challenge for the incoming Republican governor, Bruce Rauner, who takes office in January and opposes the current pension law. The overhaul reduces benefits for retirees to significantly cut the debt, but also reduces employee contributions. The lawsuit said the constitution prohibits reducing benefits or compensation once they're promised.

Unrealistic pension returns? 1:35

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— The Associated Press