Pension Reform Updates
May 10, 2013
I am writing to you today to update you with some very important information relative to the very fluid pension debate in the General Assembly in Springfield.
Thursday afternoon, the Illinois Senate approved an amended version of Senate Bill 2404, a union-backed proposal sponsored by Senate President John Cullerton that offers Tier I employees a choice of whether to accept a choice in cost-of-living adjustments, pensionable future raises and/or state-sponsored health insurance.
Illinois House passes historic pension reform bill
May 2, 2013
The Illinois House has approved a comprehensive pension-reform measure sponsored by House Speaker Michael Madigan by a vote of 62-51 Thursday afternoon.
Senate Bill 1 is designed to close a $97 billion deficit that hangs over the state's pension plans. Underfunding for decades has left the pension systems short of what they need.
The bill would require employees to contribute an additional two percent of their earnings to their pensions, delay retirement, and accept smaller cost of living increases. The state would also promise to make its required contribution each year.
Madigan pension reform package clears first hurdle
Full House vote expected today
May 2, 2013
The House Personnel and Pensions Committee passed a pension reform plan put forth by Speaker Michael Madigan by a 9-1 vote, clearing the way for the pension reform bill to be called before the full House Thursday.
Madigan's plan calls for employees to pay 2 percent more of salary toward their retirement plans. Workers would only be able to collect pension on a salary up to $110,000, which would increase by 0.5 percent of the inflation rate per year.
"It will bring solvency and stability to the four systems," Madigan said of his amendment, which would affect the State Universities Retirement System and three others but leave out the Judges’ Retirement System of Illinois to avoid a conflict should the reforms face legal challenges.
"I commend the nine members of the House Committee who today voted to address the biggest challenge facing our state,” said Illinois Governor Pat Quinn through a statement released Wednesday. "Illinois' economy will not fully recover until the General Assembly passes this comprehensive pension reform and sends the bill to my desk.”
Speaker Madigan files pension reform package
May 1, 2013
Illinois House Speaker Michael Madigan filed an amendment to a comprehensive pension-reform package passed by the Senate last month that caps the salary on which a pension can be based and limits annual cost-of-living increases.
The House Personnel & Pensions Committee is scheduled to consider the legislation at an 8:30 a.m. Wednesday, May 1 meeting.
The 277-page proposed amendment tweaks ideas proposed by Rep. Elaine Nekritz and House Republican Leader Tom Cross and would cap the total annual salary on which a pension could be based at $109,971, which is less than the $113,000 Social Security guideline originally proposed.
Public university leaders endorse pension plan
April 9, 2013
The presidents and chancellors of the 14 public universities in Illinois have unanimously endorsed a six-point proposal for addressing the state’s pension funding crisis as it relates to the State Universities Retirement System (SURS), and in a letter to the governor and legislative leaders they called it “a thoughtful and responsible approach.”
IGPA proposes six-step SURS pension reform plan
March 14, 2013
As Illinois’ public-employee pension liability soars toward $100 billion, a group of scholars that includes Northern Illinois University’s acting executive vice president Steven Cunningham, has developed a six-step proposal to stabilize pensions for employees of the state’s public colleges and universities.
More in NIU Today >
View IGPA Proposal >
Quinn targets pension reform in budget address
March 6, 2013
Education will sustain a painful hit in a new State of Illinois spending plan unveiled today during Gov. Pat Quinn’s annual budget address.
Calling it the “most difficult budget ever,” the governor said the state must solve its public-employee pension crisis, which will drain nearly $7 billion of the Illinois general revenue in the coming year.
More in NIU Today >
FY2014 Budget >
Cross, Nekritz file new pension reform proposal
February 27, 2013
Illinois House Republican Leader Tom Cross (R‐Oswego) and Rep. Elaine Nekritz (D-Northbrook) introduced pension reform legislation Feb. 27, which would save taxpayers $30 billion and the pension system for government workers, according to a press release.
Read more at NIU Today >
HB 3411 Fact Sheet >
Pension Update: House committee endorses new pension plan
January 8, 2013
A committee of lawmakers in Springfield endorsed a proposal Monday that would enact sweeping changes to the state’s employee pension system. Under the plan endorsed by the House Personnel and Pensions Committee (on a 6-3 vote) the changes would include:
- A six-year suspension of the annual 3 percent cost of living increase currently given to retirees.
- After the six-year period, increases would only apply to the first $25,000 of a retiree’s pension, and those increases would not kick in until a retiree turns 67 years of age.
- Employees also would have to chip in an additional 2 percent of their salary toward their retirements. The increase would be phased in over two years.
- The state would be legally compelled to pay its full share of its annual pension payment every year
Pension experts propose new SURS reforms
December 11, 2012
A group of Illinois university professors and administrators has released a plan to reform the retirement system for university employees.
An Institute of Government and Public Affairs proposal released Monday recommends letting workers trade a portion of their guaranteed benefits for a lump-sum payment which would go into a self-managed retirement account.
“Consideration of a fair set of alternatives for participants along with strategies to reduce pension system liabilities are important components of the reform measures we suggest,” says NIU vice president Steve Cunningham, who is among the report’s authors.
Governor Quinn launches pension reform campaign
November 19, 2012
Flanked by children yelling “Thanks in Advance” through red megaphones, Illinois governor Pat Quinn unveiled a campaign to call attention to the state’s pension funding problems on Sunday, Nov. 18.
Among the elements is the launch of a new website, www.thisismyillinois.com.
Statehouse Update: Fall Veto Session unlikely to tackle pension reform, eyes turn to January
October 16, 2012
The Illinois General Assembly reconvenes from Tuesday, Nov. 27, to Thursday, Nov. 29 and from Tuesday, Dec. 4, to Thursday, Dec. 6, for its Fall Veto Session. We also anticipate that the General Assembly will reconvene in early January 2013 for a “Lame Duck” session before the 98th Illinois General Assembly is inaugurated Jan. 9, 2013.
Although the issue of “pension reform” of the five state-funded pension systems, including the State Universities Retirement System (SURS), has been discussed by the media, elected officials, the governor, business groups, unions and other interested parties, there is unlikely to be any action taken by the General Assembly until the lame duck session in January.
At that time, it will require only a simple majority vote to approve legislation, instead of the three-fifths vote needed to pass during the veto session. Full Story >>
States are $1.38 Trillion Short in Funding Retirement Systems
June 18, 2012
The gap between the promises states have made for public employees’ retirement benefits and the money they have set aside to pay these bills was at least $1.38 trillion in fiscal year 2010, according to Pew's latest comprehensive analysis on pension and retiree health care funding.
Pension reform plans stall in General Assembly
June special session likely
June 1, 2012
Pension reform bills in both the State Senate and House of Representatives failed to come up for a vote before the midnight, May 31, deadline that marks the end of the spring legislative session. While a special session in June is likely to be called to deal with the pension funding issue, it will be more difficult to craft and pass meaningful legislation into law because passage in a special session requires a three-fifths super majority rather than a simple majority during regular session.
For the past year, leaders of Illinois’s public universities and colleges, including those at NIU, have been actively involved both on campus and in Springfield to put forth an equitable solution to pension funding. Northern Illinois University will continue to actively pursue the pension reform goals it has laid out over the past year in order to provide competitive public sector retirement benefits to attract and retain top faculty, staff and administrators. Full Story >
Revised pension plan heads to full House
May 31, 2012
A stripped-down pension reform package absent a controversial cost-shifting provision that would have transferred responsibility for payments of normal costs of pension benefits from the state to employers (universities, school districts and community colleges) passed the House Personnel and Pension Committee for consideration by the full House Thursday. Full Story >
Revised pension plan heads to full House
May 31, 2012
A stripped-down pension reform package absent a controversial cost-shifting provision that would have transferred responsibility for payments of normal costs of pension benefits from the state to employers (universities, school districts and community colleges) passed the House Personnel and Pension Committee for consideration by the full House Thursday. Full Story >
Senate Executive Committee hears separate but similar pension reform bills
May 30, 2012
On Wednesday, the Executive Committee of the Illinois State Senate heard testimony regarding House Bill 3076, which would apply technical elements similar to those presented in Senate Bill 1673, heard yesterday in the House, to the State Universities Retirement System. Additionally, the committee heard summaries of amendments to House Bills 1447 and 3865 before taking testimony in favor of and in opposition to the bills. The committee recessed without taking a formal vote on the amendments.
Full Story >
Update: Pension plan passes out of committee for consideration by House
May 29, 2012
A pension reform plan with significant implications for existing and retired state and university employees passed the House Personnel & Pensions Committee late this morning on a 6-3 vote. It now moves to the full House for consideration, possibly later today.
Briefly, SB 1673, House Amendment #3, shifts normal costs to universities, community colleges and school districts, reduces cost-of-living-adjustments in retirement and offers employees a choice between accepting the lesser, Tier II cost-of-living-adjustment (COLA) with access to the state’s retiree health care plan or maintaining the current COLA with a freeze on pay raises counting toward future pension benefits and no access to the state’s retiree health care plan.
At this point, the legislation does not include an increase in the retirement age to 67 or an increase in employee contributions to the retirement systems. A complete analysis of SB 1673, prepared by the State Universities Annuitants Association, was completed early this morning.
As this critical phase of pension discussions unfolds, updates will be posted to NIU’s State Pension & Budget Update website in addition to NIU Today.
NIU, Higher Ed representatives discuss pension plan
May 25, 2012
A pension reform plan outlined by House Speaker Michael Madigan Thursday would shift costs to universities, reduce cost-of-living-adjustments in retirement, and offer a choice between accepting the lesser, Tier II cost-of-living-adjustment (COLA) with access to the state’s retiree health care plan or maintaining the current COLA with a freeze on pay raises counting towards future pension benefits and no access to the state’s retiree health care plan.
Higher education representatives—including those at Northern Illinois University—met today with Governor Pat Quinn’s pension working group to explain the effect potential pension changes will have on the quality of higher education in the state of Illinois and on retention and attraction of qualified educators and administrators to state universities.
Speaker Michael Madigan on Medicaid and Pension Reform
May 25, 2012
Courtesy of the Illinois Channel
Retiree Healthcare Reform Bill Passes
May 11, 2012
University and other state employees could be on the verge of losing the free health insurance received in retirement, as legislation to end the benefit was approved by the Senate and goes to Governor Pat Quinn. Under the new plan contained within Senate Bill 1313, retired state employees, legislators, judges and university employees would pay a premium based on their years working for the state and ability to pay. Full story >
Cunningham discusses pensions on WNIJ
April 30, 2012
Illinois Governor Pat Quinn wants state institutions, such as Northern Illinois University, to contribute to their workers' pensions. Currently, the state pays the employer share of contributions. Quinn's plan would slowly shift the responsibility for paying the "normal cost of pensions" to universities, community colleges and school districts.
WNIJ's Dan Klefstad spoke with Steven Cunningham, NIU's vice president for administration and human resources, regarding the impact the governor's proposal would have on NIU. Read more >
Cunningham on the proposed fix by the Institute on Government & Public Policy - Listen >
Full interview - Listen >
Illinois Policy Survey analyzes attitudes towards pension reform
April 26, 2012
Each year, the just-released Illinois Policy Survey asks respondents what they consider to be the most important problem facing the state. In 2011, 34 percent of respondents indicated some aspect of state budget and government debt, making it the most widely-cited problem for the fourth straight year.
Produced by Northern Illinois University’s Center for Governmental Studies for the last 28 years, the Illinois Policy Survey provides citizens and state leaders with systematic and representative information on public attitudes, values and expectations with respect to the performance of elected officials and policy issues facing Illinois.
One major issue relating to Illinois’ financial crisis concerns the state pension systems, as funding for these programs are making increasingly heavy demands on the state’s revenues. This attachedexcerpt from the Illinois Policy Survey breaks down attitudes towards pension reform in the state of Illinois.
Pension Message from President Peters
April 23, 2012
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.
Information on Gov. Quinn's Proposed Plan to Stabilize the Pension System
April 20, 2012
- News Release & Video
- Fact Sheet (PDF)
- Public Pension Stabilization Plan (PDF)
- What the Rating Agencies Say About Illinois (PDF)
SURS Town Hall Recap
March 7, 2012
Northern Illinois University President John G. Peters sent a video message to NIU faculty and staff Wednesday, March 7, regarding the pension reform town hall meeting held earlier in the day.
Colleagues,
As part of our ongoing efforts to provide you with timely information regarding proposed changes to our pension plans, NIU hosted a town hall-style meeting this afternoon. Hundreds of current employees and annuitants attended.
At that meeting, Steve Cunningham, Vice President for Administration and Human Resources, and I presented an overview of the current situation including a brief history, implications for SURS and proposed legislation. We also discussed insights presented in the recent University of Illinois Institute of Government and Public Affairs report on this topic and had the opportunity to hear and answer questions posed by the audience.
Pension reform is a priority in state government this spring, so I encourage you to take the time to view the Town Hall meeting online, review the associated documents and stay engaged by following the issue on our state budget and pension website and offering your thoughtful comments and suggestions so we may best represent your interests.
Sincerely,
John G. Peters
President
View the video message >
View video and PowerPoint slides from today's meeting on pension issues >
President Peters, Steve Cunningham to host March 7 ‘town hall’ meeting on pension issues
February 29, 2012
NIU President John G. Peters emailed this message to the campus Wednesday, Feb. 29.
Colleagues,
As part of our ongoing efforts to provide you with timely information regarding proposed changes to our pension plans, the university will host a town hall-style meeting at 1:30 p.m. Wednesday, March 7, in the Carl Sandburg Auditorium of the Holmes Student Center.
At that meeting, Steve Cunningham, Vice President for Administration and Human Resources, and I will present an overview of the current situation including a brief history, implications for SURS and proposed legislation. We will also discuss insights presented in the recent University of Illinois Institute of Government and Public Affairs report on this topic, and will include a question-and-answer session. Specific questions may be emailed in advance to pensionquestions@niu.edu.
The entire program is expected to last approximately 90 minutes.
For those unable to attend the event, NIU Media Services will live-stream the event at NIU Today (www.niutoday.info). That stream will be archived on the State Pension & Budget Update website (www.niu.edu/statebudget/) and available for viewing at your convenience.
Pension reform is a priority in state government this spring, so please take advantage of this opportunity to hear the latest news on this important topic.
For more information about this event, and about pension issues in general, visit the NIU State Pension & Budget Update website.
Sincerely,
John G. Peters
President
State Pension Update
February 10, 2012
Northern Illinois University President John G. Peters sent a video message to NIU faculty and staff Friday, February 10, regarding a recent analysis of Illinois’ public pension problem.
Colleagues,
The prestigious Illinois Institute of Government & Public Affairs has released an insightful analysis of Illinois’ public pension problem and proposes a set of reforms for the SURS that meet the standards of the Illinois constitution and provides fiscal sustainability for the system going forward. It is built on the concept of shared responsibility among the state, its universities and employees.
Please take the time to view the video and to click the link below for more information about this insightful report and the proposal contained within. Thank you for your time and thoughtful consideration.
Sincerely,
John G. Peters
President
Read the IGPA reform proposal for the SURS >
Archived 2011 Pension Reform Updates >
Illinois Governor Pat Quinn wants state institutions, such as Northern Illinois University, to contribute to their workers' pensions. Currently, the state pays the employer share of contributions. Quinn's plan would slowly shift the responsibility for paying the "normal cost of pensions" to universities, community colleges and school districts.
WNIJ's Dan Klefstad spoke with Steven Cunningham, NIU's vice president for administration and human resources, regarding the impact the governor's proposal would have on NIU.
