UIC President Addresses Pension Law Error

“I write today out of concern over an unintended glitch in the wording of the state’s public pension funding law that would significantly reduce pension benefits under the “money purchase” option if retirement-eligible employees continue working beyond June 30, 2014.

The wording was actually meant to preserve (or “hold harmless”) employee benefits when the new pension law lowers the interest rate used to calculate monthly annuities under “money purchase,” effective July 1, 2014. It sought to lock in annuities for retirement-eligible employees to the level they would receive on June 30, 2014, even if they retired months or years later. “ READ MORE

Title: “Pension update re money purchase”

Author: Robert A. Easter

Source: Office of the University President

Date Published: April 24 2014

Pension Law Makes for "Devastated" University

“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.” READ MORE

Title: “Pension reform typo leaves thousands hanging in the balance”

Author: Jonathan Hettinger

Source: The Daily Illini

Date Published: April 21, 2014

Push to Fix Pension Bill Error

“When Illinois legislators finally pushed through a large and complicated pension reform bill last December, they generally agreed that revisions would be off-limits until the courts had a chance to rule on the constitutionality of their handiwork. Follow-up tweaks to bills are common, but lawmakers were wisely loath to reopen a bill that required so many deals and compromises to get done in the first place.

But one error in the bill is so serious and pressing that it must be fixed, and quickly. The error — a drafting mistake that set a key date in 2013 instead of 2014 as intended — would trim university pensions so severely that top professors might begin fleeing in droves before the end of June.” READ MORE

Title: “For sake of higher education, fix pension bill error now”

Author: Editorial Staff

Source: Chicago Sun-Times

Date Published: April 22, 2014

U of I Considers Supplemental Pension Program

“The University of Illinois is moving toward a supplemental pension program that would contribute money to a tax-deferred retirement savings plan for thousands of employees stung by the state's recent pension reform.

The package under consideration also would include matching contributions for employees who put money into their 403(B) retirement accounts, as well as additional help for prominent faculty and others affected by a new salary cap on pension benefits.” READ MORE

Title: “UI group looking at pension supplement”

Author: Julie Wurth

Source: The News Gazette

Date Published: April 11, 2014

Flaw in Pension Law Wording

“Flaw in law's wording means some employees will lose major benefits unless they retire before July 1.

A wording glitch in a new state pension law is prompting hundreds, and perhaps thousands, of professors and other state university employees in Illinois to consider retiring before July 1 to avoid significant benefit cuts.

The cost of waiting could amount to several thousand dollars a year for individual retirees, on top of other cuts in pension benefits, according to official estimates.” READ MORE

Title: “Pension ‘fix’ may spark an exodus”

Author: Julie Wurth

Source: The News Gazette

Date Published: April 18, 2014