The State Universities Annuitants Association issued the following press release announcing a tentative agreement with Illinois Attorney General Lisa Madigan to postpone implementation of the state’s new pension law:
Springfield, IL – Today the State Universities Annuitants Association and Illinois Attorney General Lisa Madigan reached a tentative agreement to postpone implementation of the State’s new pension law (PA 98-599).
The agreement is pending as it requires judicial approval before going into effect . The agreement delays implementation of the pension law until July 1, 2015. Specifically, the agreement protects SURS members currently eligible for retirement by allowing them to delay their retirement decision until the constitutionality of the new pension law is determined. It allows them to calculate their money purchase annuity based on the effective rates as of June 30, 2014 and allows them to avoid the skips in the annual increases if the changes to the pension are upheld. The agreement also ensures that any unnecessary pension contributions will be refunded.
“It took time and a lot of work but in the end we reached an agreement on a critical issue to our members,” said SUAA Executive Director Linda Brookhart. “The agreement ensures that our members will have all of the facts before they have to make a decision on whether to retire or not. It is my hope the court will do the right thing and allow this agreement to stand.”
SUAA’s legal team provided nearly 30 exhibits and nearly 20 declarations as part of their motion. SUAA filed the motion for injunctive relief because if the law is upheld, many faculty and other employees of the State’s universities and community colleges would be faced with the possibility of losing pension contributions already ma de and then they would be making additional contributions to their pensions without seeing any benefit to their pension benefits if they did not retire by June 29th of this year.
On the other hand, if the law is struck as unconstitutional, as SUAA argues it should be, these members would have retired early when there was no reason to do so.
SUAA has filed a lawsuit challenging Senate Bill 1, [PA 98-599]. The case is pending in the Sangamon County Circuit Court. SUAA’s lawsuit challenges the changes to the pension code on the basis that they violate three different clauses of the Illinoi s Constitution. The suit claims Senate Bill 1 violates the Pension Clause, [Article 13 Sec. 5] which forbids diminishment of pensions, the Takings Clause, [Article 1 Sec. 15] which forbids taking of private property for public use without just compensation, and the Contracts Clause, [Article 1 Sec. 16] which forbids the State to breach contracts that it makes. Several other lawsuits making similar arguments have also been filed across the State on behalf of public employees, but SURS members are different in some significant ways.
SURS members have the ability to choose one of three different retirement options but once they choose a retirement option – they are locked into their retirement plan. By changing the rules governing the various SURS retirement plans, SUAA believes the State is in breach of contract.
SUAA is represented by Aaron Maduff of Maduff & Maduff, LLC, and John D. Carr.