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Committee to explore pension solution

June 24, 2013

Illinois State Capitol building in Springfield. Photo courtesy Illinois Board of Tourism.Governor Pat Quinn called for a special session of the General Assembly in Springfield on June 19, 2013 for the intended purpose of addressing Illinois’ growing unfunded pension liability, an issue that was left unresolved when the Spring Session adjourned on May 31.  Since that time, several national credit ratings agencies have further downgraded Illinois’ credit rating, citing serious concerns about the state’s growing unfunded pension liabilities and its inability to take action to address the issue.  The downgrading of Illinois’ credit rating makes it more difficult and costly for the state and its subdivisions, including Northern Illinois University, to borrow money in bond markets for critical projects.

On June 18, the Senate Executive Committee held a Subject Matter Only hearing on the House amendments to SB 1687 and SB 2591.  President John G. Peters, along with University of Illinois president Bob Easter, Governor State University president Elaine Maimon, and SIU President Glen Poshard offered testimony during this hearing, along with NIU acting executive vice president and chief of Operations Steve Cunningham and Avijit Ghosh, senior advisor to the president of the U of I, authors of the U of I’s Institute for Government and Public Affairs publication, “Six Simple Steps:  Reforming the Illinois State Universities Retirement System.”  Committee members expressed their appreciation to the university presidents for suggesting these constructive recommendations on how to ensure the future sustainability of the SURS system for our annuitants, faculty and staff.

The legislation contains several provisions that would have significantly helped universities in return for gradually assuming the employer share of pension costs beginning in FY15 at the rate of 0.5 percent per year, including:

  • Numerous changes to procurement rules including exempting various university functions from the code including expenditures under grant awards, and allowing universities to enter into joint purchase agreements.
  • A one-year postponement of the new regulations related to the rehiring of retired faculty and staff, which would have help schools affordably stave off a “brain drain” as a large percentage of their workforce reaches retirement age in the next few years.
  • Changes to the property control act that would have substantially reduced the cost of tracking university property.
  • An agreement to provide lump sum appropriations to public universities beginning in FY15 to provide universities with additional flexibility to manage budgets efficiently.

The Governor, Speaker of the House, and Senate President agreed to form a conference committee to try to develop a compromise on a comprehensive pension reform plan after it became apparent that neither Speaker Madigan nor President Cullerton’s pension reform proposals would pass both chambers.  The 10-member conference committee has already scheduled its first meeting in Chicago on Thursday.

Speaker Madigan has appointed Representatives Elaine Nekritz, Art Turner, and Mike Zalewski, and House Minority Leader Cross has appointed Representatives Darlene Senger and Jil Tracy.  Senate President Cullerton has appointed Senators Kwame Raoul, Daniel Biss, and Linda Holmes, and Senate Minority Leader Radogno has appointed Senators Matt Murphy and Bill Brady.

In a press conference, Governor Quinn called on the conference committee to agree to a bill that could be voted on by the General Assembly on July 9, 2013.  Committee members are skeptical that this deadline will be met given the complexities of the pension issue and the fact that it requires several weeks to complete an actuarial analysis of cost savings from any proposed new compromise.


The Voices section of NIU Today features opinions and perspectives from across campus. Lori Clark is director of State and Federal Relations for NIU.