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After the Governor Signs the Pension Bill, Then What?
After the Governor Signs the Pension Bill, Then What?

With the fight over solving Illinois’ worst-in-the-nation pension shortfall moving to the courts, the state faces a grim possibility: The plan could be tossed, and Illinois could wind up in an even deeper fiscal hole. Labor unions say it’s unconstitutional and plan to sue once Gov. Quinn signs it. Court rulings on similar cases elsewhere have varied. A bankruptcy judge in Detroit said Tuesday that city pensions can be cut. But in Arizona a court said asking employees to contribute more to their retirement was illegal and made the state repay workers, with interest. Experts say that could happen in Illinois, which has some of the country’s stronger pension protections.
A major credit-ratings agency says it sees Illinois lawmakers’ passage of pension legislation as a “positive” development. Fitch Ratings says it will analyze the pension measure that the General Assembly passed on Tuesday. The ratings agency says that’s necessary to see if it enhances pension system funding and controls pension payments’ effect on the state budget. Fitch also says it believes a legal challenge to the legislation is likely.