Disaster averted?

Disaster averted?

This year will be remembered for the crisis that wasn't.

Anyone remember that big pension snafu, the one that was going to cause hundreds of university employees to run for the retirement exits rather than take a hit on their pension earnings?

Never mind. The problem has gone away. In fact, it never was a big problem. At least that's the revisionist version of what transpired.

Unfortunately, it's not quite that simple. Perhaps that's why state Sen. Chapin Rose says he'll continue to push for legislative language to resolve the issue.

The State Universities Retirement System initially interpreted the state pension bill passed in December as establishing a June 30, 2013, rather than a June 30, 2014, cutoff date for determining retiree benefits. Current university employees were told that if they stayed past June 1, they would face a reduction, possibly quite sizeable, in pension income.

To stave off large numbers of retirements, SURS and university officials urged legislators to fix the law.

But Illinois House Speaker Michael Madigan recently came forward with a simpler solution. He suggested SURS, like other state pension funds, reinterpret the law as establishing the June 1, 2014, cutoff date. He described the statutory language as "ambiguous" and urged SURS to rely on the Legislature's clear intent.

Presto chango, SURS decided the bill's language was "ambiguous" and adopted the more convenient cutoff date.

The courts have ruled that legislative intent, so far as it can be clearly determined from the historical record, is helpful in interpreting a statute's meaning. But the courts also have plainly stated that the language contained in a statute is the first and best way to determine a statute's meaning. And the reality is that the language reinterpreted as "ambiguous" isn't all that ambiguous. After all, Speaker Madigan also said that he, like Sen. Rose, continues to support legislation to correct the "technical error."

But there's a bigger issue at play. This is what happens when important, complicated legislation is passed without adequate time for a thorough review.

Part of the problem lies with the General Assembly, where legislative leaders rule like autocrats. But responsibility also lies with retirement funds like SURS. In a letter to SURS, Madigan pointed out that the system officials were "directly involved" in drafting the statutory language and "at no point" raised any concerns.

Without saying so outright, Madigan suggested SURS officials were asleep at the switch. They defended themselves, stating that no one caught the "glitch" because the bill was lengthy and complicated..

Given the importance of pension issues to thousands of university employees and the crucial importance of dates on which pension benefits are determined, Madigan's point is well taken.

Just as it was easy not to pay attention to the bill's language, SURS has now found it easy to reinterpret the bill's language. Bad things happen when people take the easy way out.

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Sid Saltfork wrote on May 13, 2014 at 4:05 pm

So the big flush comes next year instead of this year.  That gives one year for the university to create a second retirement program for the academics.  It is doubtful that many of the staff will be included in the separate pension plan.  Really, what difference will one year make; and will the workers trust the employer who stole their original pensions to do the right thing without legal clarification of the "pension reform"?  The constitutionality of the pension reform law, SB1, still waits for the State of Illinois Supreme Court to decide.  Of course, the political State of Illinois Supreme Court is delaying it's constitutional decision until after the fall election.

Will people who worked their career years leading to retirement trust their corrupt employer, and delay retirement; or not take a chance, and get out now?  After the workers leave; who in their right mind will accept employement with the State of Illinois to replace them?  The university would be well served as would the State of Illinois if the "flagship of higher education" went private with no state support what so ever.  Honor the debts, and obligations already created, and constitutionally protected.  Disassociate the U of I from state higher education; and create a private retirement system in a private university.  The citizens of the state would remain ashamed of their state government; but at least, they would lose the shame of continuous scandals at their "flagship university".