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Illinois Gov. Faces Legal Pushback on Pension Reform

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On December 27, a group of eight members of the Illinois Retired Teachers’ Association filed a class action lawsuit in Cook County Circuit Court seeking to void an amendment limiting pension benefits set to go into effect on June 1, 2014.

The eight, through law firm Tabet DiVito & Rothstein LLC, argue that Public Act 98-0599, which was approved by the state legislature and signed into law by Illinois Governor Pat Quinn, would violate what is known as the Pension Protection Clause of the Illinois Constitution. The clause, which was ratified in the 1970s, states that the benefits of pension or retirement system membership “shall not be diminished or impaired.”

Furthermore, the lawsuit states that the courts have “consistently invalidated amendments to the Pension Code where the result is to diminish benefits,” the lawsuit stated citing the court’s decision of a 1996 case.

The lawsuit states that the new law would impair or diminish pension benefits in three ways: it would lower the rate at which pensions would be calculated, it would raise the retirement age for certain members, and it would impose a new cap on pensionable salaries.

But given the pension’s US$ 100 billion in unfunded liabilities, Governor Quinn is not about to back off a deal that proponents say could save about US$ 160 billion over the next 30 years.

“We believe the new law is as constitutionally sound as it is urgently needed to resolve the state’s pension crisis,” Quinn spokeswoman Brooke Anderson said in a statement.

Capital Constellation Backs Middle Market PE Platform

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Capital Constellation is the investment platform owned by the Alaska Permanent Fund Corporation (APFC), RPMI Railpen, and Wafra Inc. on behalf of the Public Institution for Social Security of Kuwait (PIFSS). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Canadian Pension Giants Could Support Trans Mountain Pipeline Deal

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The British Columbian (B.C.) government and indigenous groups publicly oppose the Trans Mountain Pipeline project over a number of issues, which include environmental concerns (potential pipeline spills) and land protections. The threat of project derailment sent jitters to Houston-based Kinder Morgan, Inc., requiring the company to halt non-essential spending on Trans Mountain Pipeline L.P. Calgary-based Kinder Morgan Canada Limited, which owns the pipeline, is a listed company that is 70% owned by Kinder Morgan and 30% owned by stock market investors (float). Kinder Morgan Canada hired TD Securities to explore options regarding the future of the pipeline.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Goldman Sachs Poised to Name David Solomon as New CEO

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Goldman Sachs is poised to name David M. Solomon, the firm’s president, as its new CEO, replacing Lloyd C. Blankfein. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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