Retired teachers group sues Illinois over looming health insurance cost changes

[January 25, 2022]  By Greg Bishop

(The Center Square) – A group of retired Illinois educators is suing the state over what they say is a diminishment of promised benefits. Some see it as another example of the need for constitutional pension reform.

The state is reducing by around $100 million per year what taxpayers pay for retired teachers' health care starting July 1.

The Illinois Retired Teachers Association said it filed a lawsuit Monday against the Teachers Retirement System Board of Trustees, the Pritzker administration, Illinois comptroller, Illinois treasurer, House Speaker and Senate President in Sangamon County Court.

Retired teacher Pat Hampton said the reduced state contribution would mean increased costs for retired teachers like herself.

“It would just be financially, physically, mentally, in so many ways just devastating to me,” Hampton told WMAY Monday.

The IRTA is seeking to require the state to pay a “sufficient” amount.
 

“Our actuary has come forth and said anywhere from one to four years the fund could go belly up,” IRTA Executive Director Jim Bachman said.

Wirepoints President Ted Dabrowski said the unfunded health care liabilities are a real concern for beneficiaries.

“The state has grossly underfunded its obligations,” Dabrowski told The Center Square. “By the same token, taxpayers should be really scared too because they’re going to be on the hook for over $70 billion in these unfunded retiree health insurance costs that nobody seems to know how to pay for.”

IRTA officials also said the state’s reduction would be a diminishment of promised benefits protected by the Illinois Constitution.

Dabrowski said all of Illinois’ public sector pension funds are $140 billion unfunded and this latest lawsuit highlights additional unfunded taxpayer costs for retiree health care.

“It’s a $70 billion shortfall,” Dabrowski said of the unfunded health care costs for public sector retirees. “So, it’s back to the same discussion of we need a constitutional amendment to reform all these debts that we have that the taxpayers are going to be on the hook for eventually.”

Such proposed amendments at the Illinois statehouse have never advanced.

The Teachers Retirement System declined to comment on the pending litigation.