A Cook County judge Friday rejected the city’s attempt to scale back its worker pension contributions to create a more sustainable retirement fund.

Holding closely to the Illinois Supreme Court’s In re Pension Reform Litigation ruling issued May 8, Associate Judge Rita M. Novak held the Chicago plan is unconstitutional. The city wanted to curb pension payments by lowering cost-of-living increases, raising the retirement age and increasing workers’ contributions to the Municipal Employees and Laborers Pension Funds.

Novak’s ruling voids the entire proposal.

The Illinois General Assembly passed the enabling legislation, Public Act 98-641, that took effect last year and authorized the city to make the change.

In light of the ruling, John T. Shapiro — a partner at Freeborn & Peters LLP who represents one of the lead plaintiffs, Mary Jones — said he looks forward to working with the city to come up with a “fair and lawful” solution to its burgeoning pension issues.

Shapiro said there are “a variety of ways” the city could raise revenues to fund its pension system. He said he will let the city figure out ideas on ways it could take that route, should it choose to.

Changing the state constitution is a possible fix, he said, but “whether that would solve the problem remains to be seen.”

The case was consolidated with a second suit filed by Jeffrey Johnson, who was represented by Clinton A. Krislov of Krislov and Associates Ltd.

In a statement, Stephen R. Patton — the city’s corporation counsel — said while he is disappointed by Novak’s ruling, he looks forward to having the Supreme Court hear the city’s arguments.

“We continue to strongly believe that the city’s pension reform legislation, unlike the state legislation held unconstitutional this past spring, does not diminish or impair pension benefits, but rather preserves and protects them,” he said.

The city argued that its plan gave pension participants a “net benefit” because they would be part of a financially sound pension system despite seeing “modest changes” to their annuities and contribution levels.

Novak ruled the city’s argument was “based on several premises that are wholly inconsistent with constitutional teachings.”

She turned to In re Pension Reform Litigation to note that when the high court defined the rights guaranteed through the state constitution’s pension protection clause, it did so with reference to mandating an employer-employee contractual relationship that provides an enforceable obligation to pay pension benefits.

“If the state or municipal employer creates a pension system, the contractual relationship that is mandated derives from the constitution, and so does the enforceable obligation to pay the benefits,” she wrote.

Novak wasn’t swayed by the city’s contention that all provisions of the Pension Code become part of a public employee’s contractual relationship.

Although the city highlighted one Supreme Court case and a 3rd District Appellate Court ruling to support its position, Novak ruled the Supreme Court laid a large foundation of case precedent to rule “a significant set of the code’s provisions are expressly not incorporated into the contractual relationship specifically the funding provisions.”

“From the Supreme Court’s latest pronouncement in In re Pension Reform Litigation to its early statements shortly after ratification of the 1970 Illinois Constitution in People ex rel. Federation of Teachers v. Lindberg, … the decisions have been uniform,” she wrote. “Funding choices remain in the hands of the political branches and are not ‘benefits’ within the meaning of the pension protection clause.”

Novak held the city’s “net benefit” argument, at its core, rests on the notion that the General Assembly can trade the plaintiffs’ constitutional rights to receive pension benefits for a way to ensure that the employees are guaranteed payment in the future.

That trade-off, she wrote, is inconsistent with the pension protection clause’s safeguards.

“No ‘net’ benefit can result where the loss of guaranteed rights are exchanged for legislative funding choices, which remain outside of the protections of [A]rticle XIII, [S]ection 5,” Novak ruled. “Therefore, the General Assembly is not free to diminish benefits even if offering increased financial stability.”

Novak held the city’s theory also overlooks another “core concept” in the pension protection clause — the fact that it limits legislative power.

The limits exist, she wrote, because the framers of the state constitution were operating on past experiences when the 1970 constitution was ratified to ensure the legislature would have no authority to diminish public employees’ retirement benefits.

The consolidated case is Mary Jones, et al. v Municipal Employees’ Annuity and Benefit Fund of Chicago, 14 CH 20027.