Wednesday, April 25, 2012
Video of Springfield Report:
Status of Action on Public Pensions
Thank you to Jim Limber for attending, broadcasting and recording this important event.
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Tuesday, April 24, 2012
NIU's President on Pension Funding Crisis
Author: John G. Peters, President, NIU
Title: Peters emails campus on pension funding crisis
Publication: NIU Today
Title: Peters emails campus on pension funding crisis
Publication: NIU Today
Link: http://tinyurl.com/niupres
Date Published: April 23, 2012
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Date Published: April 23, 2012
NIU President John G. Peters emailed this important message to faculty, staff and annuitants earlier today.
Dear Colleagues,
Friday afternoon Governor Quinn outlined the framework of his plan to resolve the state’s pension funding crisis. Briefly, the Governor’s proposal provides for 100% funding for pension systems by 2042 by making the following changes to the current plan:
• 3% increase in employee contributions
• Reduce COLA (cost of living adjustment) to lesser of 3% or ½ of CPI, simple interest
• Delay COLA to earlier of age 67 or 5 years after retirement
• Increase retirement age to 67 (to be phased in over several years)
• Establish 30-year closed ARC (actuarially required contribution) funding schedule
• Public sector pensions limited to public sector employment
In return for the changes above, employee pay increases would continue to be counted in the calculation of their pension, and employees would receive a subsidy for their health care in retirement.
The Governor’s plan also calls for phasing-in the responsibility for paying normal costs of pensions to each employer, including school districts, community colleges and public universities.
So what does the Governor’s plan mean for our faculty and staff at NIU who have never missed a contribution to their pension plan?
While there is no doubt the state’s pension plans are in terrible financial shape, the root cause of this problem is NOT the fault of the state employees. Nor is it the fault of the taxpayers of the state of Illinois. The root cause lies in decades of state underfunding of required pension obligations while redirecting resources to other priorities. To resolve this funding crisis, shared sacrifice is necessary.
Public university presidents and chancellors have indicated a willingness to assist the state in developing a viable, long-term solution to the pension funding conundrum. The state’s most analytical thinkers on public pension funding have been at the table offering expertise and assistance to political leaders to resolve this issue and put the state on solid financial footing once again.
The Illinois Institute on Government and Public Affairs recently released a plan to address the SURS system funding deficits, which to most public university leaders is considered fair and requires shared sacrifice on the part of the employees, the employers and the state.
The Governor’s Pension Working Group proposal appears inconsistent with these standards.
Under the Governor’s plan, NIU employees would pay 3% more each year in pension contributions, moving from an 8% annual contribution to an 11% annual contribution. The annual cost-of-living adjustments for retirees would be diminished and reformulated, and the retirement age would eventually be raised to 67. This is just the direct financial impact on each individual employee.
In addition, NIU’s contribution as the “employer” under this plan, if current normal cost obligations were fully transferred to the university, would amount to $24 million annually. To put this in context, this represents over 27% of our annual operating appropriation from Springfield. If we were forced to absorb this cost all at once, it would require a 44% increase in tuition for students entering the university this fall. This is unacceptable.
Compounding this imbalance, Illinois public university employees are not eligible for social security benefits unless they have worked outside the public university system. Every private sector and many public sector employers in the state and nation must consistently contribute 6.2% of payroll to Social Security on behalf of each employee. Using this standard, at a minimum, the state must contribute 6.2% of payroll for its employees who are NOT eligible for social security, as this is what is required for employers whose employees remain eligible for social security.
Public universities do not have the ability to increase property taxes to pay for increased employer pension contributions. We need the state to maintain at a minimum a 6.2% contribution rate as part of the employer costs, and over time, with a carefully planned and phased approach, we will be able to absorb the remainder of the employer costs without damaging our universities through program eliminations, lay-offs or tuition increases for our students.
Up until 1967, public universities paid the employer contribution to the pension program for employees. In 1967, the State of Illinois took over this obligation. It has taken 45 years to result in the fiscal mess the state is now facing, and public universities need at least a fraction of that time to help the state fix the problems.
It’s very true there is no quick and simple solution to the long-standing underfunding of the pension system, and clearly the problem must be resolved very soon to ensure that the retirement program public employees were guaranteed remains financially viable. NIU will continue to advocate for a solution similar to that put forth by the IGPA for the SURS system. Make no mistake, this plan will result in increased employer contributions and probable higher employee contributions as well. But I believe it is a fair and equitable solution and one that upholds the Illinois Constitution.
In all likelihood, any pension reform plan approved in Springfield will be subject to a court challenge. While the courts may be the final arbiter, if the legislative and funding solutions are not crafted with extreme care and due-diligence, consider the financial implications to the state should the courts decide the solution the General Assembly approves falls short of the Constitutional standard. Not only would the state be virtually insolvent overnight, but the financial integrity of the pension programs could be poised for collapse as well. This must be avoided at all costs.
My message to Illinois’ elected leaders is simple: Yes, the pension funding crisis is real. It is serious. It must be resolved soon. People’s livelihoods and futures depend on the decisions made by our elected officials. Many have no social security safety net, as they are ineligible for social security benefits. These people have faithfully contributed every single paycheck to their pension plan. Many have served the people of this state honorably and diligently for decades. They deserve our very best efforts to create a fair, stable pension reform package that will provide stability during their retirement years. We believe that employees are willing to make some additional sacrifices to stabilize their earned benefits, as is NIU as an employer.
However, if these shared commitments are made, employees should not be forced to accept a choice of reduced benefits to ensure continuity of a pension funding plan that is already an obligation of the state.
Instead, any increase in employee contributions should specifically be dedicated to funding and retaining current plan benefits. In this way, any increase in employee or university contributions would still assist the state in establishing a long-term, stable funding plan. Otherwise, escalated retirement rates will threaten both the integrity of our universities, and the long term funding status of the pension system.
This is a humbling responsibility and one that should bow the shoulders of all of us who are leaders of this state. It is a time to come together as Illinoisans for the best interests of the State of Illinois. After all, each of us chose this great state in which to live, work and raise our children.
We at NIU remain focused and engaged so that our voice will be heard, and every effort will be made to keep you informed. I ask for your support in this most critical matter.
Sincerely,
John G. Peters
President
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SUAA ALERT on HJRCA49
Below, you will find the direct email address for the
entire Senate Executive Committee.
cradogno@sbcglobal.net
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Monday, April 23, 2012
Pension Proposal
Author: Robert A. Easter, President-designate, University of Illinois
Publication: UIC Staff Official Announcements
Title: Pension proposal
Date Published: April 23, 2011
Members of the University Community:
Publication: UIC Staff Official Announcements
Title: Pension proposal
Date Published: April 23, 2011
The state of Illinois continues to experience severe
financial stress caused by the largest economic downturn in decades and
resulting insufficient revenue to meet the needs and obligations of the state,
including pensions.
Last Friday, Gov. Quinn announced his proposal to
stabilize the state's public pension system that includes the State University
Retirement System (SURS). The proposal is limited to the SURS traditional
benefit plan and does not impact employees in SURS self-managed plans.
The Governor's proposal includes increasing employee
contributions, raising the retirement age, and reducing cost-of-living
adjustments. The proposal does not identify an effective date for the changes
or suggested phase-in periods.
Let me stress that this is only a proposal, and no
legislation has been introduced. We will closely monitor its progress through
the legislative session.
We also will be actively engaged in proposing adjustments
and amendments to the proposal to minimize the financial impact on our
dedicated employees and protect retirement benefits earned. Approval of the
proposal by the legislature in its present form is uncertain.
I fully appreciate the concern you may have about your
retirement system and the impact these proposed changes may have on you and our
great University. We will keep you informed as this proposal moves forward for
legislative consideration and do everything possible to protect the retirement
benefits you have earned.
Robert A. Easter
President-designate
University of Illinois
For More Information
--Gov. Quinn's news release (http://tinyurl.com/quinnrelease)
--SURS fact sheet on governor's proposal (http://tinyurl.com/sursonquinn)
--Rockford Register Star coverage (http://tinyurl.com/rockfordstar)
of the governor's proposal, including sidebar with key points
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Proposed Changes to TRS
May Impact SURS Members
I forward the following message that I received from TRS for your information. I would guess that most of these changes apply to all members of the five State pension funds, including SURS.
I have set off the TRS-specific language with parentheses.
Merrill Gassman
-------- Original Message, sent Friday, April 20, 2012 --------
This afternoon Governor Pat Quinn outlined a "public pension stabilization plan" that he estimates will save the state between $65 billion and $85 billion by 2045 and will erase the (TRS) unfunded liability (of $44 billion) by 2042. There is no timetable or deadline for action on this plan, or a date when the changes would take effect if enacted, so (TRS) cannot really advise any members what they should do about retirement decisions to be made in the foreseeable future. If enacted, these changes would likely face a court challenge lasting several years. What we do know is that under the plan changes in benefits and contributions only affect active and inactive members. The plan does not change one thing for members who already are retired.
(TRS has not yet modeled aspects of the governor's plan so we do not yet know how much this plan will cost active TRS members.) We have seen no specific legislative language. In announcing the plan, the governor said that action is needed this spring on pension reforms in order to avoid changes in the state's credit rating. A lower rating would cost all taxpayers millions of dollars in extra interest payments when the state borrows money. The governor's call, however, does not mean the General Assembly will act this spring.
Here are changes in the plan that affect active (TRS) members:
*A 3 percentage point increase in the member contribution, from 9.4 percent to 12.4 percent. The retirement age will be gradually increased over several years to age 67.
*Upon retirement, the cost of living adjustment will be changed from 3 percent compounded to a COLA that is capped at 3 percent or one-half of the consumer price index, whichever is less. The new COLA is not compounded.
*Upon retirement, a member's COLA will not begin until 5 years after retirement, or age 67, whichever comes first.
Here is what the plan does not change for (TRS) members:
*The basic 2.2 benefit formula that is based on service credit and final average salary.
*The alternative "money purchase" formula for members with service prior to 2005, a formula that is based on total contributions.
*Post-retirement work rules.
*Creditable earnings -- there is no cap on earnings applied to a pension.
*Survivor benefits
(While) the governor's plan alludes to reducing the current state "subsidy" for health insurance premiums that retired state employees receive, (this part of the plan is likely not aimed at TRS members. TRS members pay an average health insurance premium of $577 in retirement.) State employees that have worked 20 years currently pay no health insurance premium in retirement. The reality is the state wants them to be like TRS members and pay a premium.
Other parts of the pension stabilization plan are:
*A strong guarantee written into state law that requires the state to pay its full annual contribution to (TRS and) the other pension systems. No detailed language of this guarantee was provided.
*(Over the next several years, school districts will gradually begin to pay the total annual cost of TRS pensions. Last year school districts paid $155 million and the state paid $2.1 billion for pensions. Under this shift, those numbers would change. School districts would have paid about $800 million and the state would have paid $1.6 billion.) .
*Only public employees will be allowed to be members of the state's public pension systems -- no private organization employees will be allowed membership (in TRS).
------------------------------------------------------------------------
Merrill L. Gassman, Ph.D.
President and Webmaster, The UIC Chapter of SUAA
Professor Emeritus of Biological Sciences
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Friday, April 20, 2012
Governor Quinn's Proposed Medicaid Cuts
Author: Sara Feigenholtz
Title: Governor Quinn's Proposed Medicaid Cuts
Publication: Sara Feigenholtz Email Newsletter
Date Published: April 20, 2012
Dear Neighbor:
I am one of four members of a bipartisan legislative committee tasked with finding ways to reduce the state's Medicaid liability. I remain committed to the goal of ensuring that vital services are available to those who need it and that care is delivered efficiently and cost-effectively. Facing a $2.7 billion Medicaid budget hole, we risk a complete collapse of the system unless we enact reforms.
On Thursday, Governor Quinn released his plan to reduce the state's Medicaid liability by $2.7 billion. The plan proposes a $1 per pack cigarette tax that his office estimates would bring in $675 million in revenue; this includes a 100% federal match. His plan also eliminates some optional services, cuts reimbursement rates to providers, increases cost-sharing measures, limits access to some services, and eliminates fraudulent and wasteful use of the system.
Some highlights of Governor Quinn's proposed Medicaid cuts and reductions include:
• Reducing adult eligibility to 133% of the federal poverty level for the Illinois FamilyCare program that offers healthcare coverage to parents living with their children 18 years old or younger
• Eliminating Illinois Cares Rx, which provides prescription drug assistance to low-income seniors and disabled persons
• Limiting adult eyeglass eligibility to one pair every two years
• Providing adult podiatry coverage only to diabetics • Eliminating group psychotherapy for nursing home residents
• Eliminating adult dental coverage and new dental grants
• Limiting prescription drug medications to five per month for adults and children
A full list of his proposed cuts, reductions, and efficiencies along with the gross savings and estimated number of clients impacted can be found here.
You can also read the Chicago Sun Times' endorsement of the plan here and the Chicago Tribune's endorsement of the plan here.
These decisions are far from easy, and we realize the very real impact that many of these changes could have on the lives of Illinoisans. I welcome all of your feedback and thoughts as the legislature considers the Governor's proposals and continues to develop our own plan for making Medicaid more efficient.
Very truly yours,
Sara Feigenholtz State
Representative 12th District
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Title: Governor Quinn's Proposed Medicaid Cuts
Publication: Sara Feigenholtz Email Newsletter
Date Published: April 20, 2012
Dear Neighbor:
I am one of four members of a bipartisan legislative committee tasked with finding ways to reduce the state's Medicaid liability. I remain committed to the goal of ensuring that vital services are available to those who need it and that care is delivered efficiently and cost-effectively. Facing a $2.7 billion Medicaid budget hole, we risk a complete collapse of the system unless we enact reforms.
On Thursday, Governor Quinn released his plan to reduce the state's Medicaid liability by $2.7 billion. The plan proposes a $1 per pack cigarette tax that his office estimates would bring in $675 million in revenue; this includes a 100% federal match. His plan also eliminates some optional services, cuts reimbursement rates to providers, increases cost-sharing measures, limits access to some services, and eliminates fraudulent and wasteful use of the system.
Some highlights of Governor Quinn's proposed Medicaid cuts and reductions include:
• Reducing adult eligibility to 133% of the federal poverty level for the Illinois FamilyCare program that offers healthcare coverage to parents living with their children 18 years old or younger
• Eliminating Illinois Cares Rx, which provides prescription drug assistance to low-income seniors and disabled persons
• Limiting adult eyeglass eligibility to one pair every two years
• Providing adult podiatry coverage only to diabetics • Eliminating group psychotherapy for nursing home residents
• Eliminating adult dental coverage and new dental grants
• Limiting prescription drug medications to five per month for adults and children
A full list of his proposed cuts, reductions, and efficiencies along with the gross savings and estimated number of clients impacted can be found here.
You can also read the Chicago Sun Times' endorsement of the plan here and the Chicago Tribune's endorsement of the plan here.
These decisions are far from easy, and we realize the very real impact that many of these changes could have on the lives of Illinoisans. I welcome all of your feedback and thoughts as the legislature considers the Governor's proposals and continues to develop our own plan for making Medicaid more efficient.
Very truly yours,
Sara Feigenholtz State
Representative 12th District
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Tuesday, April 17, 2012
Daniel Biss Proposes Pension Reform:
House Bill 6149 and House Bill 6150
Author: Daniel Biss
Title: Pensions: proposals and town hall meeting April 30
Publication: Daniel Biss Email Newsletter
Date Published: April 17, 2012
Dear Friend,
As you know, I've been spending a huge amount of time working on our state's enormously challenging pension problem. This work has most recently manifested itself in two bills that I've filed, as well as a Town Hall Meeting that I'll be hosting on Monday, April 30, at 7pm, at the Glenview Police Station, 2500 East Lake Avenue.
The first bill, House Bill 6149, sets up a new type of plan, known as a cash balance plan, for future public employees. Like our current systems, a cash balance plan is a type of defined benefit plan; however, its benefits are tied closely to contributions and investment returns, the risk is shared between the state and the employee, and costs are predictable. You can read a one-page description of the bill here and an additional list of frequently asked questions here.
This bill constitutes an attempt to solve a very basic problem: on the one hand, the state has demonstrated a clear inability to properly manage traditional defined benefit plans -- we consistently underfund them, we repeatedly fall victim to actuarial error, and we create loopholes that can be and frequently are abused in ways that are both offensive and expensive. On the other hand, switching to a 401(k)-type defined contribution system would create a huge cash flow problem for the pension funds and would leave our public employees, the majority of whom will not receive Social Security, without any guaranteed retirement security. A cash balance plan splits the difference in that it provides a guaranteed minimum benefit for every employee but has predictable and manageable cost and is not susceptible to abuse.
The second bill, House Bill 6150, creates a Benefit Buyout program for current employees, giving them an option to forgo future benefits in exchange for an immediate cash payout. Current employees could choose to increase their retirement age, or choose to forgo future automatic increases in their pensions. Actuaries would then calculate the savings to the state and the employee would get an immediate check for one-third the savings. You can read a more detailed one-page description of the plan here.
The idea behind this plan is that research shows that some employees value immediate compensation more than they value deferred compensation. HB6150 would give them the option to take a portion of that compensation while saving the state an enormous amount of money, making it a tremendous win-win cost-saving opportunity.
These bills do not by themselves solve our state's pension challenges -- nor does it make sense to pretend that as a freshman legislator I'll be able to single-handedly close the book on one of the most substantively, politically, and legally challenging issues we face. However, as a number of groups have convened to address this increasingly urgent problem and many policy proposals seem to be on the table -- including some very sensible and innovative ones -- I think that House Bills 6149 and 6150 represent a genuine and valuable addition to the discussion.
As always, I tremendously value your feedback, and I'd love to discuss these pension ideas with you, either one on one or especially if you're able to join us at the Town Hall Meeting on Monday, April 30 at 7pm at the Glenview Police Station. I anticipate a robust and constructive discussion and it would mean a lot to me if you were able to join us. Thank you as always for your input.
Best,
Daniel
Daniel Biss
State Representative | 17th District
District Office:
P: 847 568 1250 | F: 847 568 1256
3706 Dempster | Skokie | IL 60076
Note: If you missed the links in the post, above, check them out here:
House Bill 6149
one-page description of the bill here
frequently asked questions here
House Bill 6150
one-page description of the plan here
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Title: Pensions: proposals and town hall meeting April 30
Publication: Daniel Biss Email Newsletter
Date Published: April 17, 2012
Dear Friend,
As you know, I've been spending a huge amount of time working on our state's enormously challenging pension problem. This work has most recently manifested itself in two bills that I've filed, as well as a Town Hall Meeting that I'll be hosting on Monday, April 30, at 7pm, at the Glenview Police Station, 2500 East Lake Avenue.
The first bill, House Bill 6149, sets up a new type of plan, known as a cash balance plan, for future public employees. Like our current systems, a cash balance plan is a type of defined benefit plan; however, its benefits are tied closely to contributions and investment returns, the risk is shared between the state and the employee, and costs are predictable. You can read a one-page description of the bill here and an additional list of frequently asked questions here.
This bill constitutes an attempt to solve a very basic problem: on the one hand, the state has demonstrated a clear inability to properly manage traditional defined benefit plans -- we consistently underfund them, we repeatedly fall victim to actuarial error, and we create loopholes that can be and frequently are abused in ways that are both offensive and expensive. On the other hand, switching to a 401(k)-type defined contribution system would create a huge cash flow problem for the pension funds and would leave our public employees, the majority of whom will not receive Social Security, without any guaranteed retirement security. A cash balance plan splits the difference in that it provides a guaranteed minimum benefit for every employee but has predictable and manageable cost and is not susceptible to abuse.
The second bill, House Bill 6150, creates a Benefit Buyout program for current employees, giving them an option to forgo future benefits in exchange for an immediate cash payout. Current employees could choose to increase their retirement age, or choose to forgo future automatic increases in their pensions. Actuaries would then calculate the savings to the state and the employee would get an immediate check for one-third the savings. You can read a more detailed one-page description of the plan here.
The idea behind this plan is that research shows that some employees value immediate compensation more than they value deferred compensation. HB6150 would give them the option to take a portion of that compensation while saving the state an enormous amount of money, making it a tremendous win-win cost-saving opportunity.
These bills do not by themselves solve our state's pension challenges -- nor does it make sense to pretend that as a freshman legislator I'll be able to single-handedly close the book on one of the most substantively, politically, and legally challenging issues we face. However, as a number of groups have convened to address this increasingly urgent problem and many policy proposals seem to be on the table -- including some very sensible and innovative ones -- I think that House Bills 6149 and 6150 represent a genuine and valuable addition to the discussion.
As always, I tremendously value your feedback, and I'd love to discuss these pension ideas with you, either one on one or especially if you're able to join us at the Town Hall Meeting on Monday, April 30 at 7pm at the Glenview Police Station. I anticipate a robust and constructive discussion and it would mean a lot to me if you were able to join us. Thank you as always for your input.
Best,
Daniel
Daniel Biss
State Representative | 17th District
District Office:
P: 847 568 1250 | F: 847 568 1256
3706 Dempster | Skokie | IL 60076
Note: If you missed the links in the post, above, check them out here:
House Bill 6149
one-page description of the bill here
frequently asked questions here
House Bill 6150
one-page description of the plan here
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HJRCA49 Passed Unanimously
Author: Merrill Gassman; Reposted from SUAA Alert
Date Published: April 17, 2012
Colleagues:
The following is excerpted from a message received from the SUAA office:
HJRCA49 passed unanimously out of committee this morning. No individual votes were taken, in fact roll call was not taken. HJRCA49 will now be placed on the House Floor for 2nd Reading. Thursday of this week will most likely be the first day it can be voted on as it will need to be read two more times before passage.
Sponsor of the Resolution Speaker Madigan presented and testified on behalf of HJRCA 49. Speaker Madigan stated that he is sponsoring this Constitutional Amendment as a dose of "real tough medicine" due to his review of legislators' and governors' past behavior. According to Speaker Madigan, "we" need this medicine.
Representative Poe suggested that this Proposed Constitutional Amendment looks like a way to curtail "runaway liability" of the pension systems, to which Speaker Madigan agreed. Then Poe asked why shouldn't we have a 3/5ths vote for a pension(-funding) holiday; make it harder to have (a) pension holiday. Speaker Madigan responded that this was a good idea; he had not thought of this.
Representative Durkin who is not on the Committee asked about the process -- if there would be one in place -- as to how the pensions/benefits would be determined. He also asked about a "pension note" which would require information from the Commission on Government Forecasting and Accountability (COGFA); would this Proposed Constitutional Amendment result in an increase in costs to the General Assembly.
Speaker Madigan believes that this Proposed Constitutional Amendment will make the General Assembly pay closer attention -- find all pension sweeteners which will no longer be tolerated (so to say).
The passage of HJRCA49 will make it harder to pass changes to the TIER II pension legislation. However, this Amendment, if passed, would not go into effect until January 9th, 2013, allowing for any adjustments that might need to be made. Therefore, there is a window of opportunity for TIER II pension legislation to be changed without the requirement of a 3/5ths vote.
...............................................................................
Proponents of HJRCA49 were the Illinois Municipal League along with the Mayors and Managers Association. This Constitutional Amendment would allow new or additional controls on their pension budgets. Going forward, an expected proponent could be Rahm Emanuel, Mayor of Chicago.
None of the proponents testified except Speaker Madigan.
This proposed Constitutional Amendment will now move towards the Senate where 36 "yes" votes will be needed for passage. Note: Final passage in the Senate must be no later than the 6th of May in order for it to be placed on the General Election Ballot in November. Actually, under normal circumstances, it will need to pass out of the Senate no later than the 4th. (HJRCA49 has to be read in 3 separate days in each chamber.)
...............................................................................
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Date Published: April 17, 2012
Colleagues:
The following is excerpted from a message received from the SUAA office:
HJRCA49 passed unanimously out of committee this morning. No individual votes were taken, in fact roll call was not taken. HJRCA49 will now be placed on the House Floor for 2nd Reading. Thursday of this week will most likely be the first day it can be voted on as it will need to be read two more times before passage.
Sponsor of the Resolution Speaker Madigan presented and testified on behalf of HJRCA 49. Speaker Madigan stated that he is sponsoring this Constitutional Amendment as a dose of "real tough medicine" due to his review of legislators' and governors' past behavior. According to Speaker Madigan, "we" need this medicine.
Representative Poe suggested that this Proposed Constitutional Amendment looks like a way to curtail "runaway liability" of the pension systems, to which Speaker Madigan agreed. Then Poe asked why shouldn't we have a 3/5ths vote for a pension(-funding) holiday; make it harder to have (a) pension holiday. Speaker Madigan responded that this was a good idea; he had not thought of this.
Representative Durkin who is not on the Committee asked about the process -- if there would be one in place -- as to how the pensions/benefits would be determined. He also asked about a "pension note" which would require information from the Commission on Government Forecasting and Accountability (COGFA); would this Proposed Constitutional Amendment result in an increase in costs to the General Assembly.
Speaker Madigan believes that this Proposed Constitutional Amendment will make the General Assembly pay closer attention -- find all pension sweeteners which will no longer be tolerated (so to say).
The passage of HJRCA49 will make it harder to pass changes to the TIER II pension legislation. However, this Amendment, if passed, would not go into effect until January 9th, 2013, allowing for any adjustments that might need to be made. Therefore, there is a window of opportunity for TIER II pension legislation to be changed without the requirement of a 3/5ths vote.
...............................................................................
Proponents of HJRCA49 were the Illinois Municipal League along with the Mayors and Managers Association. This Constitutional Amendment would allow new or additional controls on their pension budgets. Going forward, an expected proponent could be Rahm Emanuel, Mayor of Chicago.
None of the proponents testified except Speaker Madigan.
This proposed Constitutional Amendment will now move towards the Senate where 36 "yes" votes will be needed for passage. Note: Final passage in the Senate must be no later than the 6th of May in order for it to be placed on the General Election Ballot in November. Actually, under normal circumstances, it will need to pass out of the Senate no later than the 4th. (HJRCA49 has to be read in 3 separate days in each chamber.)
...............................................................................
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Appeal Opposing HJRCA49:
SUAA Action on Your Behalf
Author: Richard Lockhart representing the State Universities Annuitants Association
April 17, 2012
Chairwoman Representative Nekritz
House Personnel and Pensions Committee
Dear Madame Chair:
Vote ‘No’ on HJRCA 49
Amending the Constitution of the State of Illinois is more about how it affects the next generation rather than the present. HJRCA 49 would be a very complex addition to our Constitution and should be subject to more objective analysis and a thorough legal review than in the time we have here today.
As I read it, this amendment affects all local governments and government services, including police and fire departments, education and more. It will affect government at every level for a very long time.
The State Universities’ Annuitant Association represents currently employed and retirees of the State University and Community College systems. Our members do not receive social security.
We believe this amendment to our Constitution will make it more difficult to attract and retain quality personnel at Illinois State-funded universities and colleges by placing conditions and strict procedural requirements on pension and retirement benefit increases. We also understand that the governing body for higher education in this State is the General Assembly. These requirements seem to put or would require the General Assembly to be in the business of setting salaries for those such as physics professors, grounds-keepers, plumbers and talented administrators employed in higher education. We believe this is the domain of the education sector.
This amendment also creates new definitions for the terms “new benefit,” “emolument increase” and “beneficial determination” which are neither defined in current statutes or in existing case law. These definitions, and other terms in this amendment, would likely generate a litigation that would result in delays and costs that will be borne by local governments, the State, our university system and other stakeholders.
Finally in section (d) of this amendment, the concluding paragraph would grant unprecedented powers to government that will undermine protections contained in the Pension Protection Clause and eliminate the uniform laws that now exist for State employee benefits and obligations in the Illinois Pension Code. This paragraph will allow every unit of local government to go its own way with respect to pensions, therefore ensuring a benefit gulf will emerge between the State’s retirement systems, geographic regions and citizens employed in a wide range of public sector occupations.
Again, we respectfully ask you vote no on HJRCA 49.
Richard Lockhart representing the State Universities Annuitants Association
cc: Members of the House Personnel & Pensions Committee
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Chairwoman Representative Nekritz
House Personnel and Pensions Committee
Dear Madame Chair:
Vote ‘No’ on HJRCA 49
Amending the Constitution of the State of Illinois is more about how it affects the next generation rather than the present. HJRCA 49 would be a very complex addition to our Constitution and should be subject to more objective analysis and a thorough legal review than in the time we have here today.
As I read it, this amendment affects all local governments and government services, including police and fire departments, education and more. It will affect government at every level for a very long time.
The State Universities’ Annuitant Association represents currently employed and retirees of the State University and Community College systems. Our members do not receive social security.
We believe this amendment to our Constitution will make it more difficult to attract and retain quality personnel at Illinois State-funded universities and colleges by placing conditions and strict procedural requirements on pension and retirement benefit increases. We also understand that the governing body for higher education in this State is the General Assembly. These requirements seem to put or would require the General Assembly to be in the business of setting salaries for those such as physics professors, grounds-keepers, plumbers and talented administrators employed in higher education. We believe this is the domain of the education sector.
This amendment also creates new definitions for the terms “new benefit,” “emolument increase” and “beneficial determination” which are neither defined in current statutes or in existing case law. These definitions, and other terms in this amendment, would likely generate a litigation that would result in delays and costs that will be borne by local governments, the State, our university system and other stakeholders.
Finally in section (d) of this amendment, the concluding paragraph would grant unprecedented powers to government that will undermine protections contained in the Pension Protection Clause and eliminate the uniform laws that now exist for State employee benefits and obligations in the Illinois Pension Code. This paragraph will allow every unit of local government to go its own way with respect to pensions, therefore ensuring a benefit gulf will emerge between the State’s retirement systems, geographic regions and citizens employed in a wide range of public sector occupations.
Again, we respectfully ask you vote no on HJRCA 49.
Richard Lockhart representing the State Universities Annuitants Association
cc: Members of the House Personnel & Pensions Committee
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Monday, April 16, 2012
HJRCA49 an Insurmountable Hurdle to Improving
Tier II Pension Options for New Employees
Author: Merrill Gassman
Date Pubhlished: April 16, 2012
Colleagues:
HJRCA49 (http://tinyurl.com/HJRCA0049) has been introduced in the Illinois House of Representatives by Speaker Michael Madigan. This amendment to the Illinois Constitution would require a 3/5ths vote by any governmental body - from local school districts and municipalities to the General Assembly - in order to increase pension benefits by public employees. If this amendment should be ratified by the electorate in the coming November election, it would become effective on January 9, 2013. The amendment would present an almost insurmountable hurdle to improve the Tier II pension option for those state employees hired after January 1, 2011. The bill will be considered by the House Personnel and Pensions Committee tomorrow (Tuesday) morning at 10:00am; the State Universities Annuitants Association (SUAA) recommends that SURS participants contact members of the Committee TODAY to request that they vote "Nay" or "Present."
Other pension-related news: Rep. Daniel Biss (D-17), a member of the Personnel and Pensions Committee, will hold a town hall meeting on pension issues on Monday, April 30th at 7:00pm at the Glenview Police Station, 2500 E. Lake Av, Glenview.
Reminder: Keep up with retirement issues and legislation on the joint APAC/UIC SUAA blog at http://uicretirement.blogspot.com/.
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Date Pubhlished: April 16, 2012
Colleagues:
HJRCA49 (http://tinyurl.com/HJRCA0049) has been introduced in the Illinois House of Representatives by Speaker Michael Madigan. This amendment to the Illinois Constitution would require a 3/5ths vote by any governmental body - from local school districts and municipalities to the General Assembly - in order to increase pension benefits by public employees. If this amendment should be ratified by the electorate in the coming November election, it would become effective on January 9, 2013. The amendment would present an almost insurmountable hurdle to improve the Tier II pension option for those state employees hired after January 1, 2011. The bill will be considered by the House Personnel and Pensions Committee tomorrow (Tuesday) morning at 10:00am; the State Universities Annuitants Association (SUAA) recommends that SURS participants contact members of the Committee TODAY to request that they vote "Nay" or "Present."
Other pension-related news: Rep. Daniel Biss (D-17), a member of the Personnel and Pensions Committee, will hold a town hall meeting on pension issues on Monday, April 30th at 7:00pm at the Glenview Police Station, 2500 E. Lake Av, Glenview.
Reminder: Keep up with retirement issues and legislation on the joint APAC/UIC SUAA blog at http://uicretirement.blogspot.com/.
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New Legislation Targets Retire/Rehire
Already Passed House
Link: http://admin.conference.uic.edu/
Title: Departmental Planning for Upcoming Retirements...
Publication: 2012 Bringing Administrators Together Website
Date Published: April 11, 2012
At the Bringing Administrators Together (BAT) Conference this week, Maureen Parks, Executive Director and Associate Vice President, University Human Resources, discussed new legislation (HB 4996) which intends to curtail UI retire/rehire practices. The PowerPoint presentation is available here (refer to slides 19-23): http://tinyurl.com/7u24735.
If implemented, the legislation would introduce costly University contributions to SURS for retire/rehire employees, and establish a burdensome administrative process. The legislation could be implemented as early as this August. Other highlights from the presentation include:
*There is no guarantee of post retirement employment at the University of Illinois in accordance with Board of Trustees guidelines which encourage succession planning.
*HB4996 creates restrictions and additional SURS contributions for State universities and community colleges that hire/rehire individuals receiving an annuity from SURS.
*While the re-employment of SURS retirees at the University of Illinois is a small proportion of its workforce, the University is keenly interested in this legislation because of its anticipated impact on rehired SURS annuitants, employing departments, and University hiring policies and procedures.
*Passed IL House March 28, 2012
*Senate Sponsor: Heather Steans
*HR studying impact of implementation “as is”
*UI meeting with Senator Steans to express concerns
*UI will continue to stay involved and suggest changes
Comments from UIC UNITED's Merrill Gassman: This bill has passed the House and is now in the Senate under the sponsorship of Sen. Heather Steans, who you may remember spoke at our Forum last September (filling in for Sen. Cullerton). Final action on the bill - pass, fail, or hold - has to come before the General Assembly adjourns on May 31.
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Title: Departmental Planning for Upcoming Retirements...
Publication: 2012 Bringing Administrators Together Website
Date Published: April 11, 2012
At the Bringing Administrators Together (BAT) Conference this week, Maureen Parks, Executive Director and Associate Vice President, University Human Resources, discussed new legislation (HB 4996) which intends to curtail UI retire/rehire practices. The PowerPoint presentation is available here (refer to slides 19-23): http://tinyurl.com/7u24735.
If implemented, the legislation would introduce costly University contributions to SURS for retire/rehire employees, and establish a burdensome administrative process. The legislation could be implemented as early as this August. Other highlights from the presentation include:
*There is no guarantee of post retirement employment at the University of Illinois in accordance with Board of Trustees guidelines which encourage succession planning.
*HB4996 creates restrictions and additional SURS contributions for State universities and community colleges that hire/rehire individuals receiving an annuity from SURS.
*While the re-employment of SURS retirees at the University of Illinois is a small proportion of its workforce, the University is keenly interested in this legislation because of its anticipated impact on rehired SURS annuitants, employing departments, and University hiring policies and procedures.
*Passed IL House March 28, 2012
*Senate Sponsor: Heather Steans
*HR studying impact of implementation “as is”
*UI meeting with Senator Steans to express concerns
*UI will continue to stay involved and suggest changes
Comments from UIC UNITED's Merrill Gassman: This bill has passed the House and is now in the Senate under the sponsorship of Sen. Heather Steans, who you may remember spoke at our Forum last September (filling in for Sen. Cullerton). Final action on the bill - pass, fail, or hold - has to come before the General Assembly adjourns on May 31.
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Thursday, April 12, 2012
Topinka Opens the Ledger
for Taxpayer Inspection
Link: http://tinyurl.com/7544877
Title: Topinka Opens the Ledger Taxpayer Inspection
Publication: State of Illinois Comptroller Website
Date Published: April, 2012
Initiative Delivers Unprecedented Fiscal Information
CHICAGO – Illinois Comptroller Judy Baar Topinka on Monday unveiled The Ledger, a comprehensive online financial database that sets a new standard for transparency. In fact, the site provides taxpayers with the same up-to-date numbers and information that is used by Topinka’s office in carrying out its Constitutional duties.
Launched Monday, The Ledger allows taxpayers to click their way through everything from the state’s daily receipts and bill backlog numbers to state agency budgets and expenses. The site also provides a state employee database, allowing taxpayers to view all public salaries and recent additions to Illinois’ payroll.
The Ledger can be found at ledger.illinoiscomptroller.com.
“The Ledger is the most comprehensive, up-to-date online financial database that Illinois has seen,” said Topinka, adding that the site is automatically electronically updated each day. “Beyond providing the day’s balances and transactions, the site allows taxpayers to inspect state revenues, expenses, contracts and salaries – all without having to move from their home computer.”
To further assist taxpayers, information on the site is available for download, meaning site visitors can immediately generate a hard copy of everything from state agency budgets to employee salary listings. Specifically, the site provides:
“The Taxpayers Federation of Illinois applauds Comptroller Topinka’s interest in improving fiscal transparency in Illinois,” said Tom Johnson, President of the Taxpayers Federation of Illinois, a leading non-partisan advocacy organization. “We look forward to working with her to make the Comptroller’s fiscal data more accessible to taxpayers throughout the state.”
What Are You Doing to Protect your Future?
Title: Topinka Opens the Ledger Taxpayer Inspection
Publication: State of Illinois Comptroller Website
Date Published: April, 2012
Initiative Delivers Unprecedented Fiscal Information
CHICAGO – Illinois Comptroller Judy Baar Topinka on Monday unveiled The Ledger, a comprehensive online financial database that sets a new standard for transparency. In fact, the site provides taxpayers with the same up-to-date numbers and information that is used by Topinka’s office in carrying out its Constitutional duties.
Launched Monday, The Ledger allows taxpayers to click their way through everything from the state’s daily receipts and bill backlog numbers to state agency budgets and expenses. The site also provides a state employee database, allowing taxpayers to view all public salaries and recent additions to Illinois’ payroll.
The Ledger can be found at ledger.illinoiscomptroller.com.
“The Ledger is the most comprehensive, up-to-date online financial database that Illinois has seen,” said Topinka, adding that the site is automatically electronically updated each day. “Beyond providing the day’s balances and transactions, the site allows taxpayers to inspect state revenues, expenses, contracts and salaries – all without having to move from their home computer.”
To further assist taxpayers, information on the site is available for download, meaning site visitors can immediately generate a hard copy of everything from state agency budgets to employee salary listings. Specifically, the site provides:
- Daily General Funds balances and bond rating information
- Unpaid bill totals on file at the Comptroller’s Office
- State contract database providing agreement descriptions, with an option to obtain the document itself
- State salary database detailing payments to all public employees
- Revenue and expense database containing all transactions
- All state financial reports
- Automatically-generated Freedom of Information request for additional information
“The Taxpayers Federation of Illinois applauds Comptroller Topinka’s interest in improving fiscal transparency in Illinois,” said Tom Johnson, President of the Taxpayers Federation of Illinois, a leading non-partisan advocacy organization. “We look forward to working with her to make the Comptroller’s fiscal data more accessible to taxpayers throughout the state.”
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Wednesday, April 11, 2012
Biss Bill to End Public University Pension
'Double-Dipping' Clears Illinois House
Link: http://tinyurl.com/bissretirerehire
Author: Susan Du
Title: Biss bill to end public university pension 'double-dipping' clears Illinois House
Publication: The Daily Northwestern
Date Published: April 4, 2012
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State Rep. Daniel Biss (D-Evanston) passed legislation out of the House on March 31 to eliminate pension double-dipping at public universities.
Pension double-dipping is the practice of returning to work as a retiree to simultaneously collect a pension and salary. Private universities operating on a defined contribution pension plan, a group which includes Northwestern, have built-in protections against these abuses.
The bill mandates that if a public university rehires a retiree, that retiree must reimburse the pension system for dues collected while he is earning a salary. Biss said curbing pension double-dipping is one step toward alleviating the state’s long-standing pension woes.
“Our pension systems allow for a lot of abuses,” Biss told The Daily on Monday. “Some of those abuses involve people returning to work entitled simultaneously to a salary and pension, and some of those abuses involve artificially bumping their pensions by late-career raises and job changes and so forth. There are a variety of different opportunities for abuse, and you can’t solve your whole pension problem just by going after one of them, but addressing them is the first step to addressing our broader pension problem.”
Biss said he did not want to give the impression most people in public universities take advantage of the system. However, it does happen with some frequency, he said.
“It varies, obviously, from university to university,” Biss said. “But when I first started asking around about this I kept hearing more and more examples, so it’s definitely not just one or two people. I think it’s fair to say the cost to the state of funding our state university retirement systems is substantial and places a very meaningful strain on our budget.”
University of Illinois at Urbana-Champaign spokesman Tom Hardy said although retiree rehires occur at public and private universities nationwide, it is a very limited practice at UIUC.
“University of Illinois has a policy regarding retiree rehires and our office of government relations has been working with Representative Biss on researching this subject and helping inform his legislation,” Hardy said.
Adding that those who retire and return to work are typically hourly workers — such as ushers at football games — Hardy said UIUC has policies in place that protect against widespread abuse of the pension system.
“(UIUC has) policies that basically limit how much time you can work as a retiree rehire, that spell out the kind of work that’s done. Again, typically it’s part-time in nature, and we publish a list of who those individuals are.”
NU, as a private university, will not be subject to Biss’ proposed bill even if it clears the Illinois Senate.
Pamela Beemer, NU associate vice president for human resources, said because the University operates on a defined contribution plan as opposed to a defined benefit plan, employees who return to work after retiring won’t get the retirement contribution in addition to their new salaries.
In a defined contribution plan, employees make contributions to their accounts during their working years and may withdraw from those accounts when they retire.
“If they are hired back, typically it’s more in a phased situation, and they typically aren’t working full-time or they’re working for a defined period of time, not just being re-employed and working for years after,” Beemer said.
She agreed university pension systems, public and private alike, have undergone particular strain in recent years as a result of the recession.
“In the last couple of years with the economic downturn, individuals in higher education, and certainly Northwestern is no different, the retirement account balances of individuals have dropped,” she said.
shijundu2014@u.northwestern.edu
What Are You Doing to Protect your Future?
Author: Susan Du
Title: Biss bill to end public university pension 'double-dipping' clears Illinois House
Publication: The Daily Northwestern
Date Published: April 4, 2012
.jpg)
State Rep. Daniel Biss (D-Evanston) passed legislation out of the House on March 31 to eliminate pension double-dipping at public universities.
Pension double-dipping is the practice of returning to work as a retiree to simultaneously collect a pension and salary. Private universities operating on a defined contribution pension plan, a group which includes Northwestern, have built-in protections against these abuses.
The bill mandates that if a public university rehires a retiree, that retiree must reimburse the pension system for dues collected while he is earning a salary. Biss said curbing pension double-dipping is one step toward alleviating the state’s long-standing pension woes.
“Our pension systems allow for a lot of abuses,” Biss told The Daily on Monday. “Some of those abuses involve people returning to work entitled simultaneously to a salary and pension, and some of those abuses involve artificially bumping their pensions by late-career raises and job changes and so forth. There are a variety of different opportunities for abuse, and you can’t solve your whole pension problem just by going after one of them, but addressing them is the first step to addressing our broader pension problem.”
Biss said he did not want to give the impression most people in public universities take advantage of the system. However, it does happen with some frequency, he said.
“It varies, obviously, from university to university,” Biss said. “But when I first started asking around about this I kept hearing more and more examples, so it’s definitely not just one or two people. I think it’s fair to say the cost to the state of funding our state university retirement systems is substantial and places a very meaningful strain on our budget.”
University of Illinois at Urbana-Champaign spokesman Tom Hardy said although retiree rehires occur at public and private universities nationwide, it is a very limited practice at UIUC.
“University of Illinois has a policy regarding retiree rehires and our office of government relations has been working with Representative Biss on researching this subject and helping inform his legislation,” Hardy said.
Adding that those who retire and return to work are typically hourly workers — such as ushers at football games — Hardy said UIUC has policies in place that protect against widespread abuse of the pension system.
“(UIUC has) policies that basically limit how much time you can work as a retiree rehire, that spell out the kind of work that’s done. Again, typically it’s part-time in nature, and we publish a list of who those individuals are.”
NU, as a private university, will not be subject to Biss’ proposed bill even if it clears the Illinois Senate.
Pamela Beemer, NU associate vice president for human resources, said because the University operates on a defined contribution plan as opposed to a defined benefit plan, employees who return to work after retiring won’t get the retirement contribution in addition to their new salaries.
In a defined contribution plan, employees make contributions to their accounts during their working years and may withdraw from those accounts when they retire.
“If they are hired back, typically it’s more in a phased situation, and they typically aren’t working full-time or they’re working for a defined period of time, not just being re-employed and working for years after,” Beemer said.
She agreed university pension systems, public and private alike, have undergone particular strain in recent years as a result of the recession.
“In the last couple of years with the economic downturn, individuals in higher education, and certainly Northwestern is no different, the retirement account balances of individuals have dropped,” she said.
shijundu2014@u.northwestern.edu
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Friday, April 6, 2012
SUAA Mini Briefing
Link: http://tinyurl.com/suaa040512
Author: The State Universities Annuitants Association (SUAA)
Title: SUAA Mini Briefing
Publication: SUAA Website
Date Published: April 5, 2012
Thinking back on the days right before the Legislative Spring Break (beginning March 30 through April 16) there were several reasons for positive reactions to the decisions that were made in both the House and the Senate. March 30th was the deadline date for the third reading of the substantive bills. Those substantive bills have now left the House of their origination. Today's focus will be on the House of Representatives because this is where most of the bills on the SUAA watch originated.
House Resolution 706 Amendment 002 is a House Appropriations bill for the 2013 Fiscal Year. Both sides of the aisle, leaders Speaker Madigan and Minority Leader Cross, have pledged that they will work to reduce the State's spending. At this time there are reductions below Governor Quinn’s budget proposal.
The Resolution reads that the House expects $33,719,000,000 to be available in the general funds for not only spending but for paying the State obligations - unpaid bills. Included under non-discretionary items were the Pension payments of $5.1B for the normal cost of the five State funded pensions systems. Group Insurance is also included at $1.17B.
The Governor is looking to reduce Medicaid by $2.7B. This might be unattainable in just one year as was stated in the Committee of the Whole by Joy Johnson Wilson, Health Policy Director of the National Conference of State Legislators on March 22nd. (A Committee of the Whole is a device in which a legislative body or other deliberative assembly is considered one large committee. All members of the legislative body are members of such a committee. This is usually done for the purposes of discussion and debate of the details of bills and other main motions.)
HB3116 Pension Abuse Abatement (Jefferson, D - 67) was left on the House Floor in order of Second Reading. This bill would have kept retirees from moving to other government employment in another state and collecting their pension while receiving a salary unless their pension was suspended. This bill will not come forward again during this session - hopefully not in the future either.HB4513 Metropolitan Water Reclamation District legislation which increases the required employee and employer contributions was of interest because while this pension fund is not within the five-State funded pension systems the changes DO allow for a continued 3% COLA. HB4996 is the SURS Return to Work bill sponsored by Rep. Biss and now by Senator Steans in the Senate. There will most likely be some changes made to this bill in the Senate, but not many. One of the changes will be the effective date; a year to implement. The bill does not affect those who are under federal grants. Passage in the House was 112 yeas 2 present. SUAA's Legislative Steering Committee provided information to Rep. Biss along with other campus liaisons and lobbyists.
HB5531 was a big win for current employees and some annuitants. The bill would have repealed the provision that permits the children of employees of the State-funded universities to receive a 50% reduction in tuition fees. This is a benefit for all employees on the university campuses. The vote was 26 yeas - 75 nays - 7 voting present.
HB5790 Unused Sick Leave Credit was left on the House Floor under Second Reading. HJRCA5 - was also left in House Rules. While it can be brought back at any time, it would have to be passed by both the House and the Senate by May 6th to be on the November General Election Ballot. Constitutional amendments do not have the same rules as do legislative bills. This constitutional amendment provides that a bill shall not become a law without the concurrence of three-fifths of the members elected to each house of the General Assembly if that bill increases a benefit under any pension or retirement system of the State, any unit of government or school district, or any agency or instrumentality thereof.
For those of you who have either read the headlines of newspapers about TRS Executive Director Dick Ingram, please do not have any fears. SURS financial state is quite good; no one is looking to take the COLAs from the annuitants or reduce the 3%. The pensions are being funded; investments are doing well and it looks as if there could be solutions coming forward to change Tier II.
While there are no crystal balls to tell what adverse legislation will prevail as session moves to the adjournment date; we do know that we look forward to being able to count on the SUAA membership and friends to guide us as decisions are made. Thank you for answering the calls to action - we know they work. Your efforts are being recognized as SUAA was mentioned on the House Floor during the last few days. Let's keep working for the good of all! Enjoy this Easter weekend!
Author: The State Universities Annuitants Association (SUAA)
Title: SUAA Mini Briefing
Publication: SUAA Website
Date Published: April 5, 2012
Thinking back on the days right before the Legislative Spring Break (beginning March 30 through April 16) there were several reasons for positive reactions to the decisions that were made in both the House and the Senate. March 30th was the deadline date for the third reading of the substantive bills. Those substantive bills have now left the House of their origination. Today's focus will be on the House of Representatives because this is where most of the bills on the SUAA watch originated.
House Resolution 706 Amendment 002 is a House Appropriations bill for the 2013 Fiscal Year. Both sides of the aisle, leaders Speaker Madigan and Minority Leader Cross, have pledged that they will work to reduce the State's spending. At this time there are reductions below Governor Quinn’s budget proposal.
The Resolution reads that the House expects $33,719,000,000 to be available in the general funds for not only spending but for paying the State obligations - unpaid bills. Included under non-discretionary items were the Pension payments of $5.1B for the normal cost of the five State funded pensions systems. Group Insurance is also included at $1.17B.
The Governor is looking to reduce Medicaid by $2.7B. This might be unattainable in just one year as was stated in the Committee of the Whole by Joy Johnson Wilson, Health Policy Director of the National Conference of State Legislators on March 22nd. (A Committee of the Whole is a device in which a legislative body or other deliberative assembly is considered one large committee. All members of the legislative body are members of such a committee. This is usually done for the purposes of discussion and debate of the details of bills and other main motions.)
HB3116 Pension Abuse Abatement (Jefferson, D - 67) was left on the House Floor in order of Second Reading. This bill would have kept retirees from moving to other government employment in another state and collecting their pension while receiving a salary unless their pension was suspended. This bill will not come forward again during this session - hopefully not in the future either.HB4513 Metropolitan Water Reclamation District legislation which increases the required employee and employer contributions was of interest because while this pension fund is not within the five-State funded pension systems the changes DO allow for a continued 3% COLA. HB4996 is the SURS Return to Work bill sponsored by Rep. Biss and now by Senator Steans in the Senate. There will most likely be some changes made to this bill in the Senate, but not many. One of the changes will be the effective date; a year to implement. The bill does not affect those who are under federal grants. Passage in the House was 112 yeas 2 present. SUAA's Legislative Steering Committee provided information to Rep. Biss along with other campus liaisons and lobbyists.
HB5531 was a big win for current employees and some annuitants. The bill would have repealed the provision that permits the children of employees of the State-funded universities to receive a 50% reduction in tuition fees. This is a benefit for all employees on the university campuses. The vote was 26 yeas - 75 nays - 7 voting present.
HB5790 Unused Sick Leave Credit was left on the House Floor under Second Reading. HJRCA5 - was also left in House Rules. While it can be brought back at any time, it would have to be passed by both the House and the Senate by May 6th to be on the November General Election Ballot. Constitutional amendments do not have the same rules as do legislative bills. This constitutional amendment provides that a bill shall not become a law without the concurrence of three-fifths of the members elected to each house of the General Assembly if that bill increases a benefit under any pension or retirement system of the State, any unit of government or school district, or any agency or instrumentality thereof.
For those of you who have either read the headlines of newspapers about TRS Executive Director Dick Ingram, please do not have any fears. SURS financial state is quite good; no one is looking to take the COLAs from the annuitants or reduce the 3%. The pensions are being funded; investments are doing well and it looks as if there could be solutions coming forward to change Tier II.
While there are no crystal balls to tell what adverse legislation will prevail as session moves to the adjournment date; we do know that we look forward to being able to count on the SUAA membership and friends to guide us as decisions are made. Thank you for answering the calls to action - we know they work. Your efforts are being recognized as SUAA was mentioned on the House Floor during the last few days. Let's keep working for the good of all! Enjoy this Easter weekend!
What Are You Doing to Protect your Future?
Join SUAA Now!
http://tinyurl.com/join-uicunited
Wednesday, April 4, 2012
Proposal Requires SURS Reimbursement
When Retirees Return to Work
Link: http://tinyurl.com/retirerehire
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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Springfield Report:
Status of Action on Public Pensions
Kappy Laing (pictured, far right) with Chairman of the University of Illinois Board of Trustees, Christopher Kennedy; UIC UNITED President Merrill Gassman; and Michelle Thompson, former Secretary of the University of Illinois Board of Trustees at SUAA's Fall, 2011, membership meeting.
UIC UNITED, the UIC Chapter of the State Universities Annuitants Association (SUAA), will hold its Spring Membership Meeting on Wednesday, April 25, 2012 in the UIC Student Center West, Michelle M. Thompson (Chicago) Rooms. Katherine "Kappy" Laing, Executive Director, University of Illinois Office of Governmental Relations, will speak on:
"Springfield Report: Status of Action on Public Pensions"
The Governmental Relations office serves as the University of Illinois liaison to members of the Illinois Congressional Delegation, the Illinois General Assembly, the Office of the Governor, agencies of the federal and state governments, key local officials, and major higher education associations.
9:30am: Coffee and Rolls
10:00am: Business Meeting, including election of officers
11:00am: Katherine "Kappy" Laing
12:00pm: Buffet Luncheon ($15 - reservation required)
The reservation form may be found at: http://www.uic.edu/orgs/suaa/Spring2012announce.html.
To RSVP or obtain more information: Contact Donna Knutson (markanddonna@uicalumni.org, 630-579-6134) or Rose Kirk (rfrankirk@comcast.net, 630-852-7316).
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Welcome to UIC Retirement Matters!
We hope this blog will be a resource to all UIC faculty and staff. We share common pension concerns - it's time we learn, act together, and protect our future!
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