Pension plan sparks uncertainty, frustration
URBANA — Uncertainty was the word of the day on campus. And frustration — to put it mildly.
University of Illinois employees anticipating today's vote on a legislative plan to fix the state's pension problem scoured the Web, talked to colleagues and emailed administrators to find out how the changes would affect their retirement bottom line.
"I'm worried because I don't know what the details are and how it's going to affect me," said Professor Bryan White, graduate program coordinator for the Department of Animal Sciences.
White, 59, said he wouldn't be hurt by the proposal to push back the retirement age for those 45 and younger. But a cap (currently $109,971) on how much salary could be used to calculate pension benefits would diminish his retirement in future years, even though his current salary would be grandfathered in, according to the draft bill. He'd also see his benefits cut by new limits on cost-of-living increases for pension payments.
That insecurity is felt by every employee on campus, said Professor Amr Elnashai, head of the UI's highly ranked civil engineering department. He's particularly upset about the reductions in cost-of-living adjustments.
"It's a really very negative message to send," said Elnashai, who is leaving to become dean of Penn State's engineering college. "All other universities are subjected to the financial hardships that the country has gone through. But they didn't turn around and penalize the faculty like Illinois is doing through the pension reforms. It's affecting everybody's future."
The changes will affect academic professionals and other staff as well as faculty. Some staff members are re-evaluating when they might be able to retire, said Tammy Nohren, administrative assistant in the College of Engineering.
"People are still trying to absorb this. It's kind of shocking," said Melissa Madsen, assistant director of human resources in the College of Fine and Applied Arts and head of the Council for Academic Professionals. "I don't see how getting 1 percent back in our paychecks is in any way going to make up for the harm done down the road."
Beyond personal interest, many professors and administrators worried about the fallout on efforts to recruit talented new faculty — and keep the UI's stars from being lured elsewhere.
Professor Gene Robinson, head of the UI's Institute for Genomic Biology, couldn't point to a specific case but said the university has had trouble recruiting and retaining "the best and brightest" because of the state's financial problems. It hasn't been able to keep pace with its peers on salaries and overall compensation, and the proposed pension changes wouldn't help, he said.
"Certainly people will be thinking about it. They owe it to their families to be thinking about it," Robinson said, who fears the changes could affect a search he is leading with five other departments to recruit three new faculty in "human sociogenomics," the study of social behavior using genomics.
Robinson said he supports the efforts to solve the state's pension problem, as it would benefit the entire state. But for the UI to remain a top university, "we have to be able to compete favorably with the other top universities in the country, public and private, for the top talent in the nation. And to compete favorably, this would include having a pension plan that is solid but not too limited in scope."
White, who also holds an appointment with IGB, has chaired recent search committees for top faculty prospects. Pensions and state finances almost always come up, he said, especially when the school is trying to recruit a more senior faculty member.
Younger recruits are more worried about landing a position than their eventual retirement, he said.
At the same time, the UI has seen many talented assistant professors come in, establish their careers and then get "poached" by another school, he said.
Professors usually don't leave for just one reason, but finances certainly play a role, he said. And this could make some "mid-career superstars" who had toyed with the idea of moving on take the prospect more seriously — especially if they're approached with a better offer, he said.
White was heavily recruited by another institution four years ago, when the recession was at its worst and the UI was in the throes of an admissions scandal. He stayed for two reasons: the "fantastic" intellectual environment on campus, and the community itself.
"The intellectual environment here far surpassed this other institution," he said, and his son was about to start high school. "It was hard to leave."
But his own department has seen "severe attrition" in the last few years, dropping from 60 faculty members to "somewhere in the 40s." They either left campus or retired so they could lock in their pensions, he said.
"You don't just rebuild that overnight," he said.
History Professor Teresa Barnes said her salary is well under the proposed cap in the pension bill, but her take-home pay is now $100 per month less than when she was hired more than five years ago because of rising insurance premiums and tax increases.
"Why would a mid-career person come to a university like this when they know that their pay is not going to be able to keep up with inflation?" she asked.
"People will start their careers here, but they won't stay," she said. And that ultimately means "students are getting shortchanged because they'll be taught by a never-ending succession of people starting out in their careers."
Math Professor Bruce Reznick, who has won several teaching awards at the UI, said he's turned down opportunities to move elsewhere because he loved working with the students and faculty here.
Reznick said a senior UI professor told him when he was recruited in 1979 that "when it comes to salaries, we're 11th in the Big Ten, but the pensions are very good and are protected by the state Constitution."
"The first part was a joke: back then there were only 10 schools in the Big Ten. I'm beginning to realize that the second part might have been a joke, too," he said via email.
"My pension (for whenever I might retire) is part of the deferred compensation that was used to recruit and retain my professional services for more than 30 years. If the state of Illinois wants to renege on its contractual obligations, they should do so, not just for state employees, but for every company that has a contract: 'People are corporations too, my friend; people are corporations too.' And there is a word for somebody who takes your work and then doesn't pay you what they promised, and that word is 'thief.'"
BY THE NUMBERS
327: Pages in the amended Senate Bill 1, the "final" version of which was made available Monday
30 & 60: Votes needed in the Illinois Senate (30) and House (60) for passage
8:30 a.m.: Scheduled start time of the conference committee hearing on Senate Bill 1 in Room 212 of the Capitol, which starts today's process
$100 billion: State's unfunded pension obligation, the worst in the country
4 of 5: Affected retirement systems: state universities', teachers', state employees' and General Assembly; the judges' system is exempt