Wednesday, April 4, 2012

Proposal Requires SURS Reimbursement
When Retirees Return to Work

Author: Chris Wetterich
Title: Proposal requires SURS reimbursement when retirees return to work
Publication: The State-Journal Register
Date Published: March 29, 2012

Legislation aimed at saving the State Universities Retirement System money when retirees return to work at a university easily cleared the Illinois House on Wednesday.

Under certain circumstances, House Bill 4996 would require state colleges and universities to pick up the tab for retirees’ pension payments if they go back to work. The bill passed the House on a 112-0 vote and now heads to the Illinois Senate.

“It is possible under the current law under the current pension code for an employee of the university system … to effectively offload a substantial portion of their compensation from the university to the pension system by kind of artificially retiring and returning to work,” said the bill’s sponsor, Rep. Daniel Biss, D-Evanston. “It attempts to curb some of the more inexcusable instances of this practice.”

Rep. Robert Pritchard, R-Hinckley, expressed concern about instances in which colleges or universities have trouble finding personnel.

“Hiring some of these retirees has been a good practice in providing students an education by qualified personnel,” he said.

But Biss noted that there are exceptions in the policy, including emergencies, part-time work, a job paid by grant funds and situations in which someone works for 18 weeks or less at a full-time salary.

Employers would have to reimburse SURS for the employees’ retirement income, not the employees themselves. Employees could also shut off their retirement payments and resume paying into the pension system and accumulating credits, in which case the bill would not apply.

Biss said he was unsure how much SURS would save if his legislation passed.

“The impact would be non-trivial,” Biss said. “It’s not the case that this is one or two high-profile instances.”

Chris Wetterich can be reached at 788-1523.

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