The plan’s supporters say it will reduce the unfunded liability by about more than $20 billion and fully fund the pension systems by 2044.
Gov. Pat Quinn’s office last month estimated the plan will save the state about $145 billion over the next three decades.
Under the plan, annual cost-of-living increases for retirees will be reduced and the retirement age for workers 45 and younger goes up, giving some workers the option of freezing their pension and participating in a 401(k)-style contribution plan.
It also puts some savings back into the pension funds and directs money from pension bond payments to the retirement systems after those bonds are paid off in 2019.
Lawmakers included two components they say were intended to improve the plan’s odds of surviving a legal challenge: a 1 percent decrease in employee contributions and a funding guarantee, which allows the systems to sue the state if lawmakers don’t pay those pension accounts.
Senate President John Cullerton described the legislation as an important test case for the courts, which could also guide the Legislature as it considers other pension reform measures this spring for the city of Chicago and municipalities around the state.
It’s unknown, however, how long it could take the courts to rule on the issue.