University of Illinois officials have worried for months that state pension reforms will push employees to retire early. But they say language inadvertently placed in pension law may provide even stronger incentive.
Avijit Ghosh is a senior adviser to university President Robert Easter. He said at a trustees' meeting Friday that the pension law passed last year would effectively take away a year of pension benefits from about 4,000 University of Illinois employees if they don't retire before July 1. Those pensions would be reduced by up to 35 percent.
The change affects employees at other public universities, too. John A Logan College will lose two top-level administrators in the coming months, and College President Mike Dreith says he doesn't fault their decision: "You know, if they stayed, they would probably have to stay a considerable amount of time to get back to where they were at this point. So it made no sense for them to do anything but retire."
Employees who are a part of the "Money Purchase" plan stand to lose a sizable chunk of their monthly benefit - IF they don't retire by July first. State University Annuitants Association Executive Director Linda Brookhart says it's important for ALL employees to take a look at their options: "People truly need to think about their situation. While maybe SURS doesn't have time, or they're running out of time, maybe they can take their financial circumstances to a financial planner."
The pension law affects ALL state employees, including those on university and college campuses in Illinois. President Dreith says he fears a "brain drain" in higher education because of the potential number of retirees over the next several months. State Sen. Daniel Biss was involved in drafting the pension reform legislation and says the fix would be simple. But some lawmakers may be uneasy about reopening the pension legislation.