FAQs: Proposed Pension Reform, Health Benefits Legislation & Budget Legislation [5/16/12]
May 16, 2012
Proposed Pension Reform
How would Gov. Quinn's pension reform proposal affect state university employees?
On April 20, Gov. Pat Quinn announced his plan for proposed pension reforms. The governor's proposal includes: a 3 percent increase in employee contributions; reduce the cost of living adjustment to lesser of 3 percent or half of CPI; delay cost of living adjustment to earlier age of 67 or five years after retirement; increase retirement age to 67 (to be phased in); establish a 30-year closed actuarially required funding schedule; and limit public sector pensions to public sector employment.
Has pension reform legislation been drafted?
As of today (May 16), neither the governor's proposal nor other legislative proposals dealing with pensions have been made available in bill form. A pension reform working group, comprised of Senators Mike Noland and Bill Brady and Representatives Elaine Nekritz and Darlene Senger, along with house and senate leaders, is reviewing a variety of scenarios/proposals.
What are some of the proposals being considered?
In addition to Gov. Quinn's proposal, the Illinois Institute of Government & Public Affairs (IGPA) is proposing a set of reforms for the State Universities Retirement System (SURS) to meet the standards of the Illinois Constitution and to provide fiscal sustainability for the retirement system. The IGPA proposals are built on the concept of shared responsibility for the state, its public universities and university employees. The IGPA's proposals can be found at wiu.edu/news/newsrelease.php?release_id=9554. The University expects to see additional proposals prior to the end of the legislative session.
If universities must start contributing a portion to employee pension funds, how will this affect Western and other universities?
State-supported colleges and universities would have less money to use to support their educational mission, to support employees, to support technology and to attend to critical deferred maintenance projects. Western is committed to keeping education affordable for our students. However, this new liability would make it more difficult to hold down the expense of getting an education.
What is Western Illinois University doing?
We have been communicating with our legislators, coordinating with other university presidents, and through our governmental liaison in Springfield, we have made our concerns known to the governor and legislative leadership.
What can state university employees do?
Contact legislators and other state leaders to voice concerns. Contact information can be found at www.ilga.gov.
Health Benefits for Retirees Legislation
What does the health insurance legislation mean for current and future retirees?
Legislation to restructure health insurance for retirees has been approved by both the House and the Senate. The legislation now goes to Gov. Quinn for approval. Under the new plan in SB 1313, retired state employees, legislators, judges and university employees would pay a premium based on determinations made by the Department of Central Management Services. Discussions at the state-level are ongoing.
Is the State considering a reduction in higher education funding for FY'13?
A reduction in state appropriated dollars for higher education is a concern each fiscal year as the state continues to face dire budgetary challenges. There is discussion that state university appropriated budgets could be reduced by as much as 6.5 percent for Fiscal Year 2013.
If the State does further decrease FY'13 higher education funding, how will this affect state colleges and universities?
As stated above, it would make it more difficult to accomplish our mission and to keep our tuition affordable. A significant reduction in higher education funding would affect hiring and many other expenditures, projects, programming, etc.