Pension issues likely to resurface in veto session

Steve Cunningham
Steve Cunningham

With the Illinois General Assembly’s Fall Veto Session less than a month away, look for the issue of state employee pension plans to start creeping back into the headlines, says Steve Cunningham, NIU vice president for Administration and Human Resources.

The topic dominated much of the discussion at the end of the spring legislative session, but no action was taken on any proposals.

However, look for discussion on proposals similar to both Senate Bill 512 and Senate Bill 175 to reemerge during the two-week veto session, which begins Tuesday,  Oct. 25.

NIU’s State Pension and Budget Update website once again will provide up-to-the minute information on these topics as they develop.

As presented in the spring, Senate Bill 512, would dramatically alter pension contribution rates for current employees, while Senate Bill 175 would require some annuitants to start contributing toward their health insurance.

Lawmakers set aside both bills, thanks in no small part to objections by current and former state employees who raised a variety of issues – from the constitutionality of changing the pension plan for current employees to the fairness of requiring long-time current and future retirees on modest pensions to start shouldering a substantial portion of their health insurance costs.

There were a number of meetings held during the summer to explore those issues, but no substantive changes emerged.

At the veto session, the bills could be reintroduced as they stood in May, they could be altered, or entirely new proposals could be put forth, Cunningham said. Any plan would require a three-fifths majority for approval. If that cannot be achieved, the issue likely will be taken up again in the next legislative session.

“Speaker of the House Mike Madigan and Minority Leader Tom Cross have made statements that they plan to continue pursuing pension reform, so this is going to remain a major issue,” Cunningham says.

The topic is crucial to the financial health of the state.

State Pension & Budget UpdateCurrently, Illinois has the largest unfunded pension liability of any state in the country – in excess of $80 billion. That shortfall is primarily due to decisions of lawmakers in the past to skip payments or make partial payments. The state signed on to a plan to cover 90 percent of that gap by 2045, but some experts say that doing so will consume so much of the state budget in years ahead that it will cripple the state.

“The magnitude of this problem is enormous – the scale of it is difficult for individual employees to respond to because they rely on the state for their pension benefits,” Cunningham says. “But for our employees it is crucial that they stay up to speed on these issues and engaged in the conversation.”

To assist in that process, the university’s State Pension and Budget Update website provides links to recent news articles, copies of legislation and analysis of the issues. The Resources section includes an excellent overview of the issue provided by the Institute of Government and Public Affairs at the University of Illinois.

“Last spring demonstrated the value of an informed university community, and the impact they can have on this crucial issue,” NIU President John Peters says. “I urge all of our employees to take advantage of the resources provided by the State Pension and Budget Update website, and to engage thoughtfully in this discussion. Few things on the horizon have the potential for a more lasting impact on our lives.”

Print Friendly, PDF & Email