Reforming public pensions subject to political and legal constraints: The Illinois experience

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On December 5, 2013, the Governor of Illinois signed into a law a bill that substantially reduced pensions for public sector workers in Illinois. Designed to partially address the severe under-funding problem created from many decades of inadequate contributions to the state's large pension funds, the new law was negotiated in a highly constrained environment. Strong constitutional benefit protections and political constraints both imposed severe limits on the set of options available to the legislature. This paper discusses these constraints and how they influenced the shape of the final bill. It also analyzes the financial and legal implications of the reform for the state, public universities, and participants.

Original languageEnglish (US)
Pages (from-to)941-963
Number of pages23
JournalNational Tax Journal
Issue number4
Publication statusPublished - Dec 2014



  • Illinois
  • Public pension reform
  • Retirement plans

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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