UI, other universities oppose pension proposal
URBANA — University of Illinois President Robert Easter and other leaders of the state's public universities have come out in opposition to the pension reform plan expected to be called for a vote on Tuesday.
In letters sent to House Speaker Mike Madigan, Senate President John Cullerton and other legislative leaders, Easter and the presidents of Southern Illinois University, Northern Illinois University, Illinois State University and other state universities expressed "profound disappointment" in the legislation.
Easter and his staff spent much of Monday reading the 325-page bill posted that morning. As expected, it calls for a number of changes: the cost-of-living increases for retiree payments would be based on years of service and the consumer price index; it proposes a cap (currently $109,971) on how much salary can be used to calculate pension benefits; and it pushes back the retirement age for some workers, among other changes.
"It's pretty straightforward," Easter said about his opposition to the legislation. "The COLA adjustment and other provisions just make it, we think, a very significant impairment to higher education in Illinois and in particular, our ability to recruit and retain the kind of faculty and staff we need to be the kind of university the state wants us to be," Easter told The News-Gazette.
The university's legislative liaisons will formally file opposition slips today in Springfield.
"We're not opposed to pension reform. We think it's essential. We've been more than willing to work with legislators on various scenarios," Easter said, referring to the "Six Point Plan" drafted by the UI's Institute of Government and Public Affairs and proposed to legislators in the spring.
In previous statements on the topic of pension reform, Easter said the university has called for a pension system that would be "reasonable, responsible, sustainable, and competitive with those offered by our peer institutions."
"In our view, the legislation under consideration fails to meet those basic principles. The likely changes arguably lessen the retirement commitments made to employees and retirees, and their net effect also will harm the public higher education sector in Illinois. We will make our opposition heard and monitor the pending legislation, and will keep you informed of developments," the president wrote to employees in an e-mail Monday.
In the letters to legislators, Easter and the other presidents and chancellors expressed disappointment that the state's nine public universities' counterproposals were not included.
Both the COLA changes and the cap on how much salary is used to calculate pension benefits are the main reasons behind his opposition to the plan, he told The News-Gazette. The cap could affect 2,000 UI employees, according to UI officials.
The Chicago campus operates a College of Pharmacy, and the starting salary for pharmacists is greater than the cap, "and certainly the faculty who teach them," Easter said.
"The immediate concern is about our faculty and staff, but also the quality of individuals we bring to the university has impacts down the road on grant activity," he said. Among the three campuses, the university brings in about $1 billion of grants annually, Easter said.
"That (grant activity) creates a lot of other jobs that are important. If we lose the people who are in competition for those grants, that has impacts on local restaurants, businesses. It's more than just about our faculty and staff, it's about what having a high quality staff enables you to do for the broader economy," Easter said.
UI employees and those at other public university and community colleges participate in the State Universities Retirement System. The system has 202,354 members in its defined benefit plan and 18,707 in its self-managed plan, according to SURS. The proposed pension reform changes do not affect the current defined contribution/self-managed plan members, according to SURS spokeswoman Beth Spencer.