CHICAGO, June 18 (Reuters) - Seeking to break a weeks-long impasse in efforts to fix the state's woefully underfunded pension system, Illinois will turn to a rarely used legislative conference committee in hopes of reaching a compromise solution, Governor Pat Quinn's office said on Tuesday.
State lawmakers return to the state capitol on Wednesday for a special session on pensions called by Quinn. A series of meetings over the last two weeks has brought the Democratic Senate president and House speaker no closer to tackling the state's nearly $100 billion unfunded pension liability.
The conference committee, made up of five members each from the House and Senate, would "bridge the differences and forge agreement on a comprehensive pension reform plan," a statement from the Democratic governor's office said.
Legislators will use Wednesday's session to vote to create the committee, and Quinn plans to call another session for early July to pass legislation, the statement added.
Political paralysis over fixing the worst-funded state retirement system has led to a series of credit downgrades for Illinois, which now has the lowest ratings among U.S. states.
Quinn has expressed frustration over the inaction and its impact on the state's ratings and borrowing costs. Illinois is in the midst of a $31 billion capital improvement program, partly funded by the sale of bonds, and it is set for a planned sale of $1.3 billion of general obligation bonds next week.
As for the conference committee, House Speaker Michael Madigan "agreed this approach could be worth trying," said his spokesman Steve Brown. He declined to say what pension reform approaches the committee could consider.
Rikeesha Phelon, a spokeswoman for Senate President John Cullerton, also declined to talk about the committee's agenda. "Everyone needs to be leaning toward compromise and resolution," she said.
The Illinois General Assembly last turned to a conference committee to hash out a compromise on legislation in December 2005, according to Phelon.
Madigan has favored unilateral cuts to retirement benefits to reap the greatest savings - an approach labor unions have said violates the Illinois Constitution. Cullerton has advocated a plan, backed by the unions and passed by the Senate, that gives workers and retirees choices between reduced benefits and continued access to state-sponsored healthcare in retirement.
Another plan that addresses only one of the state's five pension funds - State Universities Retirement System - is being pushed by the heads of universities as a way to save as much as Madigan's approach, while having a better chance of withstanding a constitutional challenge in court.
The plan calls for higher worker pension contributions, gradually shifts pension payments currently made by the state onto the universities and community colleges, and ties pension payment increases to inflation.