* From a late Monday press release…
Today the State Universities Annuitants Association and Illinois Attorney General Lisa Madigan reached a tentative agreement to postpone implementation of the State’s new pension law (PA 98-599).
The agreement is pending as it requires judicial approval before going into effect. The agreement delays implementation of the pension law until July 1, 2015. Specifically, the agreement protects SURS members currently eligible for retirement by allowing them to delay their retirement decision until the constitutionality of the new pension law is determined. It allows them to calculate their money purchase annuity based on the effective rates as of June 30, 2014 and allows them to avoid the skips in the annual increases if the changes to the pension are upheld. The agreement also ensures that any unnecessary pension contributions will be refunded.
* From WUIS…
The SUAA request had also asked for a stay of the entire pension law, but instead of holding out for that or going through a protracted court battle, negotiated the deal with the attorney general. Those involved say time is of the essence in hopes of holding off a retirement wave they argue will harm the state’s schools through a loss of institutional memory. They say the State Universities Retirement System has been overburdened with members trying to understand how the pension law would affect their benefits, and without enough time to meet with each, people have been forced to make retirement decisions without the full scope of information.
The tentative agreement between the SUAA and the attorney general resolves problems stemming from what can be described as typo in the pension law affecting university workers’ so-called “money purchase plans.” The SURS board recently voted to interpret the law as if the typo were fixed, so as to not inadvertently further cut some university workers’ pensions.
But the SUAA deal also goes beyond that; it eliminates issues involving so-called “refunds” that would have meant some university employees would have taken big hits were they to stay on the school payroll; the original request for an injunction, filed May 2, cited a man who would lose $190,000 if he kept working rather than retire by July.
The deal would also allow retirement systems to temporarily ignores a key provision of the pension law which reduces by one-percentage point how much employees must contribute toward their retirement; under the terms workers will continue paying what they do now, so as to not create additional harm if the law is found to be unconstitutional. There are additional changes, that affect individuals under systems besides SURS.
* And in a related story…
A coalition of labor unions on Monday asked a court in Springfield to prevent a new state law aimed at curbing Illinois’ public employee pension debt from taking effect next month until questions about its constitutionality have been resolved.
The legal filing in Sangamon County by We Are One Illinois came more than a week after a similar request was made on behalf of a group representing current and retired state university employees.
The pension law, approved by lawmakers and signed into law in December, sets a goal of wiping out the state’s $100 billion retirement debt within 30 years by reducing automatic cost-of-living increases for existing and future retirees while requiring workers to work longer before retiring.
“The pension theft bill must not be implemented before the courts have ruled,” Illinois AFL-CIO President Michael Carrigan said in a statement. The coalition includes the American Federation of State, County and Municipal Employees, the Service Employees International Union, the Illinois Federation of Teachers, the Illinois Education Association and other public worker unions.