Please share these with other NEIU employees…SURS applies to all state university employees. SURS (State University Retirement System)

Money Purchase Factor Change Fact Sheet

Retire: Who…Me?

Letter to Governor Quinn

Springfield’s lawmakers said Wednesday they do not think a bill revamping pensions for current state employees will be called for a vote during the remaining three days of the veto session.

Appearing before The State Journal-Register editorial board, Sen. Larry Bomke, R-Springfield, and Reps. Raymond Poe, R-Springfield, and Rich Brauer, R-Petersburg, also said they might consider a borrowing plan for the state if the money could be repaid in less than a year and Gov. Pat Quinn specifies exactly how the borrowed money will be spent.

The General Assembly is taking a week off before returning Tuesday for the final three days of the veto session.

Read more at the State Journal-Register…

This is from the SUAA fall board meeting a couple of weeks ago. Most people, including legislators, do not understand the flaws in the plan to push everyone into a 401(k). Illinois could end up in a worse situation with all retirees forced into Social Security and the state forced to make back payments into the system.

“Bill Mabe, Executive Director of the State University Retirement System (SURS) was the luncheon speaker. He addressed the current state of the pension system and noted that the system was funded for the current fiscal year. Payments of 81.7 million dollars were to be made to the System each month. However, the full payments were not being made but he has been told that they would catch up to the full payment amount owed to the system.

Among the problems faced by the System is simple demographics. The number of applicants (retirees) has doubled over the last 10 years, benefits have increased, but the number of active members (employees) has not increased and salaries have not increased enough to offset the number of those retiring.

Mr. Mabe discussed the four pension reform working groups which have been working over the summer and continue working to address the funding problem. He has been testifying at their sessions and believes that the members of the groups have come away from the meetings much more aware of the issues. He has pointed out that SB 512 does not save money in the long run and does not address the current unfunded liability. For example, he states that money required of the Defined Contribution plan (401 (k) type plan) costs significantly more to operate than the current system, would not allow the State to defer payments to the pension fund as it does now, and would take away money used to support the other pension plans. He also noted that he did not think the alternative plans would meet the Social Security standards for exemption from Social Security. Thus, Social Security officials would start demanding payroll taxes at some point. Those taxes would be due from the first day the covered plan took effect so there could be years of back payroll taxes due. He also noted that many part-time workers might receive small pensions but the pension would cause the offset and WEP provisions of Social Security to take effect, reducing the Social Security benefit awarded more than the pension was worth.”

Illinois House Minority Leader Tom Cross, R-Oswego, said he will be ready to call a bill to set up a three-tiered pension system for state workers during the second week of the legislature’s veto session, which starts Nov. 8.

But demonstrations against Cross’ bill, among other employee funding issues, resulted in the Statehouse being closed for about 10 minutes Wednesday as thousands of union members packed the rotunda.
Cross said the Civic Committee of the Commercial Club of Chicago, a group of the city’s top CEOs, has brokered a deal in which House Republicans would provide 30 votes for the pension bill, Senate Bill 512, and House Democrats would provide another 30. Sixty votes are needed for legislation to pass the House.
“We have 30,” Cross said.

The Senate is another story. Senate President John Cullerton, D-Chicago, says the pension bill is unconstitutional, although he has not ruled out allowing a vote in his chamber.

3 options
The bill would offer current teachers, university employees and state workers three pension options: Stay in the current system but pay significantly more, go into a second tier for workers hired after Jan. 1 that has reduced benefits or choose a 401(k)-style defined contribution plan.

Read more at the State Journal Register…

The Chronicle reports that the state has nearly repaid the higher education bill for 2009-2010 and then speculates about the borrowing that may lie in our financial future.

Illinois’s Public Universities Won’t Have to Borrow — for Now

By Eric Kelderman

The State of Illinois has repaid nearly all of the $464-million it owed to its public universities from the 2009-10 fiscal year, which ended on June 30.

Read more at the Chronicle…

Teachers: Don’t blame us for mess

By Ed Geppert and Ken Swanson
August 19, 2010

Dennis Byrne’s Aug. 10 column on Illinois’ financially imperiled pension system struck a nerve. The presidents of the Illinois Education Association and the Illinois Federation of Teachers have responded with an essay that says the Tribune is being used as a “tool of terror.” The IEA Web site says the Tribune is “waging a relentless war against public employees over state pensions” and claims the “real author” of Byrne’s column was Eden Martin, president of the Civic Committee of the Commercial Club of Chicago.

In the interest of debate, we present the essay from the IEA and IFT, and a response from Eden Martin.

How much longer will the Chicago Tribune allow itself to be used as a tool of terror by millionaire Eden Martin in his quest to deprive hundreds of thousands of Illinoisans of the reasonable retirement they, in large part, have paid for?

The Aug. 10 opinion piece, ostensibly written by public relations specialist Dennis Byrne, is a blatant attempt to frighten and intimidate innocent people who simply expect the State of Illinois to keep its promises.

Byrne/Martin’s claim that the state pension shortfall was caused by overly-generous pension benefits paid to state employees and teachers is provably false. And they know it.

Read more at the Chicago Tribune…

Why That Illinois Pension Check Will (Most Likely) Be in the Mail After All

Posted by Jeffrey Brown on Aug 16, 2010

As an economist, I often get annoyed when lawyers with no training in economics try to act as if they are experts in economic policy. As such, all the lawyers out there should be equally annoyed with this blog post, because I – an economist with no legal training – am about to make an observation about state constitutional law.

Read more at the Center for Business and Public Policy…

Pension check may not be in the mail

Dennis Byrne
August 10, 2010

Illinois public employees who think the state constitution guarantees that they’ll get all their pension benefits may have another think coming.

Politicians’ and public labor unions’ assurances aside, there’s another, not-well-publicized school of thought that says if the pension funds go bust, the state has no obligation to step in to pay the benefits. This runs contrary to the popular view that the Illinois Constitution, on its face, guarantees that all public employee pension benefits will be fully paid.

Read more at the Chicago Tribune…

Here’s an alert from the Illinois Federation of Teachers (IFT), the state organization for the UPI.

This is an urgent Action Alert for all members of the Responsible Budget Coalition. (The IFT is a lead partner in the RBC coalition.)

The so-called “Emergency Budget Act” will be voted on TODAY in the Illinois General Assembly.
Please call your legislators NOW! Dial 800/719-3020 and follow the prompts to be connected to your legislator.
Tell them to VOTE NO on the Emergency Budget Act (House amendment 3 to Senate Bill 3660).
The Emergency Budget Act, if passed, would give Governor Pat Quinn broad powers to:
• skip paying the state’s required contribution to its pension funds; and
• place reserves on any state appropriation — in effect forcing cuts — including to the Common School Fund, funding for state universities and colleges, or any state agency, grantee or program.
Call 800/719-3020 now. It is urgent that legislators hear from us.

Tell them to VOTE NO on the Emergency Budget Act (House Amendment 3 to Senate Bill 3660).
Please share this RBC Action Alert right away with fellow union members, friends and families.
Thank you for your quick action on this important issue.