Tribune Article regarding Korshak Agreement

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Subject: Fwd: Tribune Article regarding Korshak Agreement - 17 Dec 12



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Sent: 12/17/2012 9:16:27 P.M. Central Standard Time
Subj: Tribune Article regarding Korshak Agreement - 17 Dec 12



Korshak case explained

City retiree health benefits the result of settlement



December 17, 2012

The guaranteed health care enjoyed by city retirees, their spouses and qualifying children is the result of a settlement of a federal lawsuit known around City Hall simply as "Korshak."

The case dates back to 1987, when then-Mayor Harold Washington tried to stop making the retiree health care payments the city first committed to in 1964 — and claw back $58 million it already had paid out.

So the city sued pension fund trustees, one of whom was the late Marshall Korshak, a Democratic power broker and ally of Mayor Richard J. Daley.

In response to the city's lawsuit, the pension fund countersued. Individual retirees joined the legal fray.

The city's attempt to get the money back failed, and the issue of whether the city was obligated to keep making payments went to trial.

The case was settled after trial testimony but before a ruling. As part of the initial 1988 Korshak settlement, retirees started picking up a portion of their health care insurance costs. City workers who retired after the settlement picked up a slightly larger portion than those who retired before it.

Until the mid-1980s, the city paid the entire cost of retiree insurance plans. Then state laws were enacted that required the pension funds to start paying a portion of the cost, and the city continued to pay the rest — until the Korshak settlement.

The first Korshak settlement lasted until 1997, when the case became active again because no permanent solution had been found. Two more settlements followed, putting off a final resolution for another day. If nothing is settled by the end of June, the case could end up back in court.

— Hal Dardick