![Illinois top court overturns 2013 state pension law on constitutional grounds](https://www.jurist.org/news/wp-content/uploads/sites/4/2020/03/shutterstock_657639088.jpg)
[JURIST] The Illinois supreme court [official website] on Friday overturned [opinion, PDF] the 2013 Illinois Pension Law [98-599 text] that attempted to reduce the state’s pension deficit by eliminating automatic cost of living increases and extending the retirement age. The law itself would apply to four of the state’s five state-funded retirement systems. The state law would have reduced pensions based on a new formula and allowed for employees to freeze their pension and contribute to it like a 401(k). Additionally, the measure delayed retirement for employees under the age of 45 at the time the law was enacted. The 2008 recession decimated the state’s pension investment portfolios and the Illinois legislature has worked to pass a law to manage the $105 billion retirement system debt [Chicago Tribune report. Justice Lloyd Karmeier [official website] stated in writing the courts opinion that “In enacting the provisions, the General Assembly overstepped the scope of its legislative power. This court is therefore obligated to declare those provisions invalid.”
Pension rights have been a controversial issue recently. In November 2014 an Illinois judge ruled [JURIST report] a law designed to fix the pension crisis in the state violates the Illinois constitution. In December a judge for the US Bankruptcy Court for the Eastern District of Michigan [official website] ruled [JURIST report] that the city of Detroit is eligible for bankruptcy [JURIST op-ed]. The insolvent city’s debt [JURIST op-ed] includes 3.5 billion dollars in pension funds. The bankruptcy was allowed to go forward despite a Michigan state court ruling [JURIST report] last year which held that the city’s filing for bankruptcy violated the Michigan Constitution. The bankruptcy court held that the pension funds could not be treated any differently than other unsecured debt. In March 2013 the US District Court for the Southern District of New York [official website] denied [JURIST report] a motion to dismiss a lawsuit brought by a pension plan holder against JPMorgan[corporate website; JURIST news archive]. The court found that sufficient allegations were raised to support a claim for breaches of both the duty of care and the duty of loyalty.