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Cook County judge rules that 2014 law overhauling Chicago pensions is unconstitutional

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Alice Johnson, executive director Illinois Nurses Association, center, and Anders Lindall, right, spokesman for AFSCME Council 31 speak at a news conference Friday, July 24, 2015, in Chicago after Cook County Judge Rita Novak issued a written ruling stating that a 2014 law aimed at reducing multibillion-dollar shortfalls in two of Chicago\'s pension funds is unconstitutional. Mayor Rahm Emanuel has argued that without the changes the funds will be insolvent in a matter of years. (AP Photo/Sara Burnett)

CHICAGO – A Cook County judge has thrown out a 2014 law aimed at reducing multibillion-dollar shortfalls in two Chicago pension funds.

Judge Rita Novak said Friday the law is unconstitutional.

The overhaul sought to eliminate a $9.4 billion unfunded pension liability by cutting benefits and increasing contributions. It would affect about 61,000 city employees and retirees.

Workers, retirees and labour unions sued, saying the Illinois Constitution protects retirement benefits. Novak agreed, citing an Illinois Supreme Court ruling earlier this year that said similar changes to state pension funds were unconstitutional.

Mayor Rahm Emanuel has said without the overhaul pension funds will become insolvent. City officials also have said residents will likely see huge tax increases without pension reform.

Chicago has the worst-funded pension systems of any major U.S. city.

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