Unions, universities, others analyzing pension change fallout

2013-12-04T18:30:00Z 2013-12-05T00:10:07Z Unions, universities, others analyzing pension change falloutKurt Erickson Lee Springfield Bureau nwitimes.com
December 04, 2013 6:30 pm  • 

SPRINGFIELD | Labor union bosses, university presidents and pension system officials were asking what comes next a day after Illinois lawmakers voted to change retirement benefits for thousands of state employees and retirees.

With Gov. Pat Quinn poised to sign the landmark changes into law in the coming days, the groups spent Wednesday assessing how a possible court challenge might take shape and trying to determine how to help anxious employees in the interim.

For union officials who opposed the sweeping changes, Wednesday meant a day of meeting with their legal teams to determine how to best challenge the proposed law in court.

That analysis could help determine who might be the best face to put on a lawsuit challenging the overhaul.

“Any decision about going forward in the courts will be made in the near future,” said Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees union.

The centerpiece of the changes narrowly approved by lawmakers focuses on the current 3 percent cost-of-living-adjustment retirees receive each year. In arguing in favor of the new law, House Speaker Michael Madigan, D-Chicago, called the current raises “too rich.”

Under the new changes, the raises would be calculated only on the first $30,000 of a pension.

At the Teachers Retirement System, spokesman Dave Urbanek said the call volume from concerned teachers and retirees has increased in recent days.

But, he said a variety of factors is making it tough for the system to tell clients exactly what the new law will mean to them.

For example, the law is set to go into effect June 1. But, a union-led lawsuit could delay the implementation. In addition, part of the COLA calculation is based on the rate of inflation. Since the rate hasn’t been set for future years, it makes it difficult to predict a retiree’s pension amount, Urbanek said.

“There are so many moving parts with this, basically you are creating a range of options,” Urbanek said. “It’s not going to be an easy calculation.”

The We Are One coalition of labor unions posted a pension calculator on its website, allowing retirees to view a rough estimate of how the changes will affect their pension payouts.

The site is located at www.weareoneillinois.org/documents/COLA-cut-spreadsheet.xlsx

Meanwhile, university officials also are worried about the new law.

At Illinois State University, President Timothy Flanagan sent a memo to employees saying he is working with presidents and chancellors at other universities to discuss the next steps.

“As soon as I have more information, I will pass it along to you,” Flanagan wrote.

Southern Illinois University President Glenn Poshard was disappointed lawmakers didn’t take university officials up on their proposed pension changes, which he said wouldn’t have had as dire an effect on employees and retirees.

“I’ve had a dozen people tell me today this is the end of their career at the university,” Poshard said. “People are really upset about it.”

He said the changes will hurt SIU’s ability to recruit top faculty. Not only will young employees be wary of the changes in the COLA formula, but raising the retirement age for people under 46 also could turn some people away.

“It’s not like there were no other alternatives available,” Poshard said.

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