Changes to the Money Purchase Factorsto Become Effective July 2, 2012

Link: http://surs.org/shepherd.surs?flk=News&shp=78&aid=162
Author: SURS News Features
Title: Changes to the Money Purchase factors to become effective July 2, 2012
Publication: SURS Website
Date: June 13, 2011

At its meeting on June 10, 2011, the Board of Trustees of the State Universities Retirement System set the effective date of the Money Purchase factor changes as July 2, 2012.

The changes to the Money Purchase factors are a result of a recent actuarial experience study which recommended a reduction of the assumed rate of investment return and updated the mortality tables due to increased life expectancy. State statute requires SURS to conduct an experience study at least every five years to test the economic and demographic assumptions used to prepare the annual actuarial valuation report. The results of this process are then evaluated to determine which, if any, of the assumptions need modification to provide better estimates of future liability and asset growth for the System.

The last experience study was conducted in 2006. Based on changing market conditions and the current economic environment, the SURS actuary recommended that the latest experience study be conducted one year early.

For individuals retiring after July 2, 2012, the change in Money Purchase factors will result in an approximately 8% downward adjustment in the member’s annuity if their Money Purchase calculation was higher than the General Formula calculation. Members can offset the adjustment by delaying retirement by approximately 10 to 11 months for active participants and 12 to 14 months for inactive participants.

The changes to the Money Purchase factors will not affect:

• Current annuitants
• Members in the Self-Managed Plan
• Members who began participation on or after July 1, 2005
• The General Formula calculation

The monthly annuity calculation using Money Purchase Formula is unique to each individual. For this reason, SURS encourages all participants to log on to their account on the SURS Member Website. The online Benefit Estimator now reflects these new factors.

For additional details, please refer to the May 2011 edition of the Advocate or contact the SURS office.

What Are You Doing to Protect your Future?

Join SUAA Now!

http://tinyurl.com/join-uicunited

UIC SUAA President's Perspective

Link: http://www.uic.edu/orgs/suaa/Summer2011.pdf

Author: Merill Gassman

Title: President’s Perspective

Publication: UIC UNITED Newsletter

“It has been said that democracy is the worst form of government except all the others that have been tried.” This famous quote, attributed to Winston Churchill, comes to mind as I consider the political situation in Illinois. As citizens of our various governmental democracies, we exercise our right to petition our elected representatives by writing or calling to persuade, demand, cajole, etc. as we attempt to influence their votes on legislative matters of concern to us.

Does it work? Well, thanks to the petition drive organized by Michael Moss and our colleagues in the UIC Academic Professional Advisory Committee (APAC), as well as the efforts of the member organizations of the Illinois Higher Education Legislative Coalition (HELC), we were able to forestall the passage of two bills that would have been deleterious to the interests of state annuitants.

SB512,which would have diminished the retirement benefits of current state employees, and SB175,which would have imposed health insurance premiums on state annuitants, did not reach the floor of the Illinois House of Representatives for a vote in the regular spring session that ended on May 31st. UIC UNITED and SUAA called upon its members to make their feelings on these bills known to their legislators, and this lobbying effort paid off.

SB512 passed out of the Personnel and Pensions Committee of the House with two Democratic members and one Republican member voting “No” and one Democratic member voting “Present.” I take pride in the fact that Rep. Dan Biss (D-17), a freshman legislator from my own district, was the Democrat voting “Present.”Despite the fact that this bill was being championed by the two party leaders in the House, Michael Madigan (D) and Tom Cross (R), it was not called for a vote. Similarly, SB175, led by Sen. Jeff Schoenberg (D-9), did not make it to the Senate floor for action. Yet, we should not be complacent: there are strong indications that these bills will be resurrected during the fall veto session in late October. Comments by legislative experts—lobbyists and journalists—at the recent annual SUAA meeting in Springfield suggest that these bills will not go away, and that state employees and annuitants might have to come up with alternative approaches to satisfy the main thrust of the bills

Should SB512 or a similar bill become law, there is a strong likelihood that its constitutionality will be challenged in the courts. SUAA is already anticipating the need to make this challenge in concert with its partners in the HELC and will be forming a legal defense fund to provide the necessary resources. You should have received a request from SUAA for contributions to this fund.

Remember that the SUAA staff in Springfield is working in your interests. Our contract lobbyist, Richard Lockhart, the dean of Springfield lobbyists, is highly respected among the legislators as well as his peers.UIC UNITED and SUAA will contact you should your intervention be needed once again. SUAAction, our political action division, has been effective in raising the visibility of SUAA in the state capitol and in establishing lines of communication with the members of the General Assembly. Please consider making a donation to SUAAction at P.O. Box 1770, Springfield, Illinois 62705.

On a different note, I am pleased to inform you that, thanks to the efforts of SUAA Executive Director Linda Brookhart, U. of I. employees will soon be able to deduct SUAA dues from paychecks. The officers of the UIUC chapter collaborated with those of our chapter to move this issue forward through negotiations with the university’s central administration. Watch your e-mail

inbox and the UIC UNITED website for more information.

Finally, if you have a specific question or wish to express your feelings about an issue of concern, feel free to send an email to the office at suaa@suaa.org. And I would be happy to respond as best I can to any inquiry or comment. In the meantime, do visit our webpages often: UICUNITED, at www.uic.edu/orgs/suaa, and SUAA, at www.suaa.org. And, if you haven’t been receiving the periodic email messages that I send, please give me your current email address.

With best wishes,

Merrill L. Gassman, PhD, President and Webmaster

Professor Emeritus of Biological Sciences, UIC

E-mail: mgassman@uic.edu

What Are You Doing to Protect your Future?

Join SUAA Now!

http://tinyurl.com/join-uicunited