Giannoulias Proposes Cost-Cutting State Pension Reform

01/01/2009 05:12 am ET | Updated May 25, 2011

Illinois Treasurer Alexi Giannoulias is pushing a plan to pool billions in state pension investments as a way to cut costs and curtail corruption in the wake of a federal probe into how the lucrative business is doled out.

The state could save $50 million to $80 million a year on administrative costs and management fees by merging the investment duties of five government employee retirement systems, according to the proposal. The overhaul also includes ethics measures that would set higher standards and stricter regulations for board members.

"The cost savings are going to be enormous, and then you have the ethics component," Giannoulias told the Tribune. "We obviously know what took place in the past with cronyism and pay to play and people giving deals to their friends. We want to eliminate that."

But the treasurer's plan could face an uphill climb at the Capitol, where lawmakers say they welcome the ethics reforms but put the idea of combining the investments "on very thin ice."

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