As Gov. Pat Quinn signed the pension reform bill Thursday, a coalition of labor unions told their lawyers to prepare to file a lawsuit against the new law. 

State lawmakers passed the pension reform bill Tuesday after having just one day to examine the 325-page piece of legislation. Quinn signed the bill during a private ceremony at the Thompson Center.

“Illinois is moving forward,” Quinn said in a statement regarding the bill's sigining. “This is a serious solution to address the most dire fiscal challenge of our time." 

Meanwhile, the state's labor unions and supporters say the bill's provisions are illegal, and they are planning a legal challenge of the law, which is set to raise the retirement age by five years depending on the workers' age and affect collective bargaining rights (taking many pension-related issues off the table). The bill also places caps on pensionable income and allows some workers to opt out of the pension system in favor of a defined contribution system, which resembles that of 401k plans.

The legislation will also reduce cost-of-living adjustments (COLAs). Under the new bill, COLAs would be calculated by giving retirees 3 percent of an amount for each year they have worked; placing a cap on future COLA increases at $800 or $1,000 for every year the employee has been on the job. The $800 or $1,000 depends on whether they collect social security. The plan also calls for up to five years of COLA holidays, depending on the pensioner's age. The full bill can be seen here (PDF).

The We Are One coalition of labor unions released the following response in response to the bill's signing:

Governor Pat Quinn has given hundreds of thousands of working and retired teachers, nurses, police, caregivers, first responders, and others no alternative but to seek justice for retirement security through the judicial system. Contrary to his belief, every Illinois citizen loses today.

It didn’t have to be this way. Bipartisan majorities in both chambers could have passed a much fairer, legal, negotiated solution - with real, substantial savings - in Senate Bill 2404.

Instead, leading politicians and their followers chose to violate their oaths of office, trample on the Illinois Constitution, and willfully ignore the plain letter of the law. In abandoning their constitutional duties, they’ve voted to slash the retirement benefits of senior citizens and working families by one-third or more.

Senate Bill 1 is attempted pension theft, and it’s illegal. Once overturned, its purported savings will evaporate, and the state’s finances and pension systems will be left in worse shape.

Our coalition has been consistently in contact with our attorneys, and today we directed them to prepare to file suit. We will challenge SB 1 as violating the constitution and ask for a stay of the legislation's implementation pending a ruling on its constitutionality.

The pension reform bill is set to take effect June 1.