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Among immediate constitutionally permissible remedies, they say, the legislature could ditch pensions for politicians, offer new workers 401(k) plans, require teachers to contribute more toward their pension costs, and limit the growth of pensionable salaries.

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There can be constitutional pension reform but it might not help this years budget. One of the reasons we are in his mess is because early retirements were not properly funded upfront. For example TRS ERO (early retirement option for teachers and administrators outside Chicago) expires June 30, 2016 unless extended. TRS ERO was created when Governor Jim Thompson signed Senate Bill 0375 on August 1, 1979 creating Public Act 81-0150 for retirements on or after June 1, 1980. ERO sunsets every 3 – 5 years or so and would end but has repeatedly been extended through legislation. We are now on 36 years of ERO (2016… Read more »

ERO is but the tip of the iceberg of pension giveaways. In 1998, members were allowed to upgrade their service years calculation from 1.67 to 2., which inflated the pension percentage used to calculate a pension (aka the 2.2 Upgrade Option). Of course, everyone “upgraded” because the cost to upgrade could be recouped within 5-6 years after retirement. Just like ERO, the 2.2 Upgrade Option is weighted too heavily in the employees’ favor.