STUMP » Articles » Public Pensions Watch: Illinois Reform Pushing Out Senior Professors » 21 April 2014, 15:27

Where Stu & MP spout off about everything.

Public Pensions Watch: Illinois Reform Pushing Out Senior Professors  

by

21 April 2014, 15:27

They call this a “typo”.

I’m not sure this was a mistake.

Headline: Pension reform typo leaves thousands hanging in the balance

Suslick, Gordon and Cahill are just three of the 3,500 to 4,000 University employees who will lose significant benefits if they do not retire by July 1, a result of pension reform legislation passed by the Illinois General Assembly in December.

The reform made sweeping changes for state employees, including cutting cost-of-living adjustments and raising the retirement age for many younger employees, to help save the state’s massively underfunded pension system.

But one unintentional effect the bill had was significantly cutting the retirement benefits of those already eligible to retire if they do not retire by the time the bill goes into effect on July 1.

On Friday, President Robert Easter and Chancellor Phyllis Wise warned the University Board of Trustees that a mass exodus of faculty and staff prior to July 1 is very much a reality. As a result, Easter said, the University could have trouble finding instructors for all of its courses. Wise said the effect would go beyond the classroom, as the professors retiring would lose grant money and would have their research disrupted.

Avijit Ghosh, a senior adviser to Easter, said the problem could be easily fixed by the state legislature — all legislators would have to do is rewrite one sentence — but no one seems motivated to fix it.
…..
The University is last in the Big Ten in retirement benefits, offering by far the lowest retirement contribution rate. University employees, on average, receive 15 percent of their annual salary in contributions compared to a Big Ten average, excluding Illinois, of 26.4 percent.

Ghosh said the University could augment retirement benefits through its 403(b) program, increasing employer contributions to match employee contributions up to a certain percentage. He said the new rate would be “not even in the middle of the Big Ten, but it takes us away from being at the bottom in a very significant way.”

But faculty, however, said the legislature has proved to be an unreliable partner, and the blame for this fiasco falls on the board.

….
Kennedy apologized for his failing to lead the University in the right direction through the pension crisis and said the University will work to help faculty going forward. He also pleaded for faculty to not retire or leave before the next board meeting on May 14, when the board will likely vote on a supplemental pension benefit plan.

“Take this risk for us,” Kennedy said to employees thinking about leaving.

So the claim is that there was a mistake in the bill.

I’m not sure that that was a mistake. There is a note that the legislature is not trying to fix said “mistake”. I think that’s a pretty good clue that they don’t care at all.

Unluckily for the University employees, Obama cannot “deem” them to have their old retirement benefits if they retire after July 1. If only Obama were the governor of Illinois. Oh, the things that might have been.

If this was a real mistake, as noted above, it would be easily fixed, and would have been fixed by now. But it isn’t and it hasn’t, so my assumption this is on purpose. It can be that they just want to inflict all sorts of pension cuts sub rosa, hoping that some make the mistake of not retiring and then getting whacked with others on pension benefits.

If I were the professors, I would absolutely not take the risk for the university, and just retire. As it is, the Illinois pensions are in a questionable position, so the guarantees there are not much, but it’s more than a guaranteed pension cut if you stay on.

Compilation of Illinois posts


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