Wednesday, Aug 20, 2014
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Illinois universities search for ways to soften pension losses

3 months, 2 weeks ago from the Associated Press

Most say they can't afford it

From from the Associated Press:

Concerned about retirements and its ability to recruit new professors, the University of Illinoisis working on a plan to make up for what employees will lose after the state's landmark pension overhaul, but most other state universities say they don't have the ability to follow suit.

Most say they just don't have the money to do anything about it.

"Where does this money come from?" asked Matt Bierman, budget director at Western Illinois University, where up to 150 employees are expected to retire, almost 8 percent of the university's 2,000 staff and faculty. "If we're going to add another benefit to our employees, which is probably deserved, we still have to find the revenue or cut expenses."

Illinois lawmakers passed the pension overhaul plan last December to address a $100 billion shortfall in funding state retirement benefits. Signed into law by Gov. Pat Quinn, it cut cost-of-living increases for retirees and capped the amount of earnings that can be applied toward pensions.

The changes take effect in June, but the plan is being challenged in court. That includes a motion filed Friday in Sangamon County by a group that represents university employees and retirees asking that the law be entirely set aside until its constitutionality has been determined.

But many employees of public universities already have decided to retire to avoid losing pension benefits under a new way of calculating them due to the overhaul — or are considering it.

In April, state universities identified an additional problem — an unintended glitch with a date in the law that could further reduce pension payouts for several thousand university employees. Lawmakers last week filed legislation to fix that problem, but there is no guarantee it will happen.

The State University Employees Retirement System says more than 400 employees at the University of Illinois campuses in Urbana-Champaign, Chicago and Springfield have filed paperwork to retire in May and June. And many more are possible.

Details of the U of I plan to cushion employees' losses have yet to be decided, but many administrators assume it will happen. They hope it will keep as many current faculty members around as possible and keep the university on par in recruiting with schools like the Massachusetts Institute of Technology and Stanford University.

But some wonder where the money will come from.

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