Lawsuit filed by Chicago Teachers Union, others seeks to overturn pension law
Pension reform in Illinois got a rare legislative victory when the General Assembly moved to close loopholes that allowed labor leaders to land six-figure public pensions based on their much higher union salaries.

The measure, which deals with abuses exposed by the Tribune and WGN-TV, affects a small number of city workers on leaves of absence to work for their unions, and it passed with little dissent.

Now the narrow change is being challenged in court. A lawsuit spearheaded by the Chicago Teachers Union this month seeks to overturn the law, and the union's leaders are making it clear they will aggressively counter any push to solve the pension crisis on the backs of public-sector workers.

"I would disagree with the characterization that it's a reform," said CTU Vice President Jesse Sharkey. "There is a lot of politics being played, and part of that has to do with looking for people to blame."

CTU leaders say reforms to the pension system should include additional revenues to shore up the funds, not just benefit reductions.

Under the new law, CPS teachers who go on leave to work for the union will be barred from participating in the public pension plan, which means they no longer can get deals that have long been a staple of the system.

For example, CTU President Karen Lewis, who makes about $148,000, can collect a public school teachers pension worth as much as 75 percent of her union salary averaged over four years.

Even though she hasn't worked for CPS in more than two years, the teachers pension fund bills the district for contributions on her behalf as if she were still earning $82,000 a year as a high school science teacher. The union covers additional contributions required to make up the difference between that salary and her union paycheck.

It's the same deal former CTU President Marilyn Stewart received. When she was ousted by Lewis' caucus in the 2010 union elections, Stewart retired from the district, and now she collects a $150,000 teacher's pension — more than double what she had made as a schoolteacher six years earlier.

Future CTU presidents would be affected by the measure, forcing them to rely on retirement benefits provided by the union. But Lewis and Stewart are still eligible for the public pensions, which have long been a perk of those jobs.

More than affecting the pensions of union leaders, however, the law also slashes pension benefits for low-level union employees who receive two retirement packages for the same time period of work, one from the city and the other from their union.

The lawsuit, filed by the CTU, laborers' Local 1001 and Local 9 of the electrical workers' union in Cook County Chancery Court on Oct. 9, alleges those measures violate the Illinois Constitution by diminishing pension benefits for public workers who already had retired.

"The law was the law," Lewis said. "Then to change it and go back retroactively, take people's pension, is problematic for us because that's not constitutional."

Sharkey said the union is open to adjusting benefits for workers, but not before the city puts additional, guaranteed revenue streams into the system.

"We think the Legislature got it wrong and went too far. That's why we filed the suit," Sharkey said. "It was a law that ended up catching the minnows in a net intended for the whales."

Last year, the Tribune and WGN-TV detailed dozens of examples of labor leaders who took extended leaves of absence, in some cases up to two decades or more, then retired from their old city jobs and collected public pensions based on their much higher union salaries.

Many of those union officials collected a second or even a third pension from their unions for the same period of work, even though a law on the books was supposed to prevent that from happening.

House Republican Leader Tom Cross of Oswego, who sponsored the new law, said provisions in the bill do not violate the state constitution's prohibition against diminishing retirement benefits because it merely clarifies the original intent of the pension code. By allowing union employees to collect multiple pensions for one job, the funds misinterpreted the law, he said.

"To be blunt, they were gaming the system," he said. "Where someone now comes along and says, 'We interpreted this a lot more aggressively than the General Assembly originally intended, and so we're going to collect two pensions for essentially doing one job.' Where's the fairness to the taxpayer?"