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Stay requested on pension law

Friday, May 2, 2014

* The State University Annuitants Association has filed a motion requesting that the relevant portions of the pension reform law be stayed. WUIS has more

These workers can escape some of the pension reductions if they quit before July. But once someone retires, there’s no going back.

The filing argues that “misinformation and confusion” surrounding the pension law is widespread.

And with State University Retirement System overwhelmed with members seeking counseling, people are having to make these decisions without “the benefit of full information.” It says many workers may be compelled to retire on the mere chance the law would be upheld.

Though the motion is specific to members of the State University Retirement System, a stay would likely be effective for all affected public employees.

I’ve requested a copy of the motion. Check this post for updates in a bit.

…Adding… Click here to read the motion.

…Adding more… With a hat tip to a reader, this was in the DeKalb Daily Chronicle

As many news organizations have reported in the past week or so, the new, controversial pension “reform” law includes a mistake that affects some public university employees and is causing what some are calling “a mass exodus.”

That’s not an exaggeration. Just at NIU, it’s been reported that as many as 800 employees, or 20 percent, are suddenly heading for the exits. Without even concentrating, I personally can think of about 10 people leaving. Sure, some faculty members might come back to teach on an ad hoc basis, but many won’t and very few staff will return.

- Posted by Rich Miller        


25 Comments
  1. - yinn - Friday, May 2, 14 @ 3:00 pm:

    I was just reading that NIU stands to lose up to 20% of its employees.

    http://www.daily-chronicle.com/2014/05/01/akst-whats-really-wrong-at-niu/al4wwcy/


  2. - Stuff happens - Friday, May 2, 14 @ 3:00 pm:

    We’ve already lost a few people who are fleeing before the July deadline. I’m not surprised, and it makes sense to me.


  3. - Formerly Known As... - Friday, May 2, 14 @ 3:03 pm:

    That sounds more like an exodus than a trickle. Sheesh.


  4. - Formerly Known As... - Friday, May 2, 14 @ 3:08 pm:

    == controversial pension “reform” law includes a mistake ==

    That’s a pretty significant “mistake” to be missed by the House, the Senate, the Governor, the Pension funds, the Civic Committee-types and all of their staffers.

    No one thought of this? Or no one cared?


  5. - Walker - Friday, May 2, 14 @ 3:11 pm:

    Is there an unintended “mistake” in the drafting of the law, or isn’t there?

    That would be a reasonable basis for a stay.

    “Misinformation and confusion” surrounding the pension law is as much the fault of union leaders and advocates, as anyone else. Not sure that alone gets you a stay.


  6. - anon - Friday, May 2, 14 @ 3:11 pm:

    The Puerto Rico Supreme Court recently cited a rush of early retirements as a reason for striking down teacher pension cuts as a contract clause violation: “In the 5-3 teacher pension case, the majority … concluded that the legislature and governor had acted unreasonably in enacting the legislation, because (according to the majority) the legislation failed to take into account the high number of accelerated teacher retirements the legislation would provoke, which (according to the majority) would further strain, rather than improving, the teacher pension system’s finances.” And this, too: “The court noted that the legislation had been enacted during a 6-day period and that the legislature had commissioned no studies about the early retirements the legislation might trigger or the impact of such early retirements on the system’s solvency.” http://www.natlawreview.com/article/municipal-bond-market-absorbs-puerto-rico-supreme-court-s-decision-teacher-pension-r


  7. - Becasue I say so... - Friday, May 2, 14 @ 3:15 pm:

    Not only are faculty and staff running for the doors, the state stands to lose millions in grant funding. When these highly sought after faculty members leave, many will take their grant dollars with them.


  8. - kimaye - Friday, May 2, 14 @ 3:15 pm:

    Well, that’s one way to reduce state worker head counts, I guess. Crazy.


  9. - RNUG - Friday, May 2, 14 @ 3:17 pm:

    Just finished reading the motion. I was kind of expecting this because of the huge impact of the Money Purchase Option changes.

    Overall, they make a good case for a temporary stay. And they also offer 4 different choices for the stay, if the courts want to order something short of a complete TRO.

    The confusion is not just at SURS institutions. In the past couple of weeks I have heard from a number of SERS employees who were being advised by various sources to retire before May 1 in order to avoid the pension changes … apparently on the theory that anyone who retired before the effective date would be grandfathered into any protection affirmed by the courts. I don’t know how many SERS employees bailed April 30; only one of the people I talked with got back to me and siad they had decided to stay for now.

    And it is in the best interest of the taxpayers to have a smooth and orderly transition. The last time there was a mass retirement in 2002, it had some not so obvious but severe consequences on state operations.

    Given the valid questions about “pension reform” constitutionality, IMO it would be smart if the State also requested / concurred with this TRO.


  10. - anon - Friday, May 2, 14 @ 3:22 pm:

    SURS is the only system claiming there’s an error that forces these people to leave early.


  11. - Anonymous - Friday, May 2, 14 @ 3:28 pm:

    Actually the error referenced by anon will have little impact on the exodus. Money purchase changes will result in an exodus regardless of whether or not the error is corrected.


  12. - in the know - Friday, May 2, 14 @ 3:34 pm:

    for SERS employees, the deadline, per the pension system is JUNE 1, which means that the decision point for many is to be gone no later than May 15.
    Very confusing.


  13. - Langhorne - Friday, May 2, 14 @ 3:37 pm:

    Its a horrible mistake. Unintended. Fix it


  14. - RNUG - Friday, May 2, 14 @ 3:42 pm:

    FWIW - I’ve heard from SURS people about this mistake since shortly after it was passed. It was pretty much common knowledge in the university systems. The GA has had time to fix it if they wanted to.


  15. - mythoughtis - Friday, May 2, 14 @ 3:45 pm:

    According to various AP newspaper articles, there were 1100 SERS (NOT SURS) people intending to retire April 30th. The normal number is 200. TNEeaCCI


  16. - Norseman - Friday, May 2, 14 @ 3:45 pm:

    Perhaps some legal eagle can answer this. I’m curious as to what will happen to these university folks under the following scenario:

    - A stay is issued and they don’t retire because of it.

    - The SC lifts the stay after it rules after July 1st that the law is constitutional.

    Are the university folks then penalized for not having retired prior to July 1st?

    I guess, there could be a request to the SC to establish a new effective date to occur X number of days from the constitutionality ruling to allow the University folks to retire without the penalty.

    My point is that if I were a university person in this position, I would still retire even if a stay were issued unless I could be 100% assured that I could do so at the end of the ruling without penalty.


  17. - Tsavo - Friday, May 2, 14 @ 3:47 pm:

    http://www.wifr.com/news/headlines/Illinois-State-Workers-Retire-At-Higher-Rate-in-April-257691651.html

    Link to article concerning number of employees retiring in April.


  18. - OneMan - Friday, May 2, 14 @ 3:50 pm:

    So what exactly is the mistake…

    I have a very small amount (a few hundred) with this system from teaching at the local CC a couple of times.


  19. - Norseman - Friday, May 2, 14 @ 4:01 pm:

    To all those folks who are rightly pointing out the likely adverse impact on the operations of the universities, don’t waste your breath.

    These issues were raised during the deliberations and GA didn’t care about them when they passed the bill. They solved the immediate problem. It’s their practice to only solve one crisis at a time.

    When the university decline becomes evident to the public in a few years, they’ll come up with some patchwork proposal to “solve” this new crisis. Strategic thinking is not practiced by the Solons.


  20. - Old and in the Way - Friday, May 2, 14 @ 4:18 pm:

    Gee where were those legislative pension experts like Nekritz and Biss when this all happened? My gosh Nekritz is supposedly a lawyer and Biss is a self proclaimed math expert! No one in the legal community that deals in this type of law that I have talked to is surprised by this. In fact several pointed it out before the legislation even passed. Both SERS and SURS referenced this issue and others early on only to be ignored by those intent on theft no matter the complications or consequences. If the state has any sense, which I doubt, they will concur with the stay.

    The only thing more inevitable than this will be Baron Von Carhart’s flip flop on the issue. Remember he is “focused like a laser on education” in Illinois! Seems to me the loss of thousands of university faculty could hurt education! With pension reform in limbo good luck recruiting new faculty!


  21. - Formerly Known As... - Friday, May 2, 14 @ 4:28 pm:

    == These issues were raised during the deliberations and GA didn’t care ==

    == Both SERS and SURS referenced this issue and others early on only to be ignored ==

    Very important context. This problem was foreseen, the alarm was raised, and our esteemed legislators from both parties basically said “We don’t care right now”. Fantastic. So much for caring about the quality of our kids education or public services.


  22. - Norseman - Friday, May 2, 14 @ 4:29 pm:

    Old,

    What would you advise the University types to do? Trust that court will push back the effective date at the end of the process or go ahead and retire now?


  23. - Arthur Andersen - Friday, May 2, 14 @ 4:30 pm:

    Oneman, it’s complicated like most pension stuff. In a sentence, SB1 had a “typo” in the SURS provisions relating to a change in benefit calculations-for career employees, the effect on the monthly pension can be in the $100s per month. Likely minimal impact on your stash over there.


  24. - taking the gamble - Wednesday, May 7, 14 @ 9:08 pm:

    After a co worker told me that if you wanted to possibly receive the retirement with SERS that may allow you to get the 3%COLA I made a visit to SERS. Of course there is no guarantee but there was no announcement that this might be a way to be grandfathered in. After all of my years of work the lack of communication is abhorent. No where did it say you have to go by April 30 2014 but you do in order to possibly avoid the new law of sb1 on 6/1. It has made for a very unplanned ending to my career. SHAME on you SERS!!!


  25. - Norseman - Wednesday, May 7, 14 @ 10:46 pm:

    === After a co worker told me that if you wanted to possibly receive the retirement with SERS that may allow you to get the 3%COLA I made a visit to SERS. Of course there is no guarantee but there was no announcement that this might be a way to be grandfathered in. After all of my years of work the lack of communication is abhorent. No where did it say you have to go by April 30 2014 but you do in order to possibly avoid the new law of sb1 on 6/1. It has made for a very unplanned ending to my career. SHAME on you SERS!!! ===

    Your coworker misinformed you, not SERS. Retiring prior to the effective date will not affect you any differently under SB 1. I retired a few years ago and I will be affected by the diminishment of my AAI under the law.

    The best hope is for the success of the lawsuits filed by the Retired State Employee Association and others to overturn the law.

    Some TV lawyers speculate that the court may rule that you can’t touch folks already out the door, but current employees would be covered. Nobody knows how the court will rule, thus SERS would have been irresponsible if they counseled you on such an amateur legal opinion saying retire now. They have to advise based on the law as it is now and as it will be when SB 1 becomes effective.


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