U. Of I. Warns Pension Reform Glitch Could Lead To Mass Retirements
Lastest News Headlines:
Get Breaking News First
CHICAGO (CBS) – The University of Illinois was warning state lawmakers of a problem with a pension reform plan that the school fears will trigger a crippling “brain drain” as faculty members consider retiring this summer.
WBBM Newsradio Political Editor Craig Dellimore reports hundreds of university faculty members and employees have applied to retire before July, when the pension reform plan goes into effect, because of wording in the law that would seem to substantially reduce their retirement benefits after June 29.
University board of trustees chairman Christopher Kennedy said the board members knew they’d have to take some action because of the pension law approved by lawmakers and the governor, but they were surprised at one problem that arose.
“There’s a 25 or 30 percent reduction in people’s longterm retirement benefit, and that goes into effect in the next 60 days. I don’t know that everybody was aware of that separate piece,” he said.
Avijit Ghosh, senior adviser to university President Robert Easter, said the pension law effectively takes 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.
The university has asked state lawmakers to take action quickly to correct the problem before the school loses hundreds of valued faculty and staff.
Current and former university employees already have filed a lawsuit challenging the entire pension reform law, stating it violates the state constitution, which holds that retirement benefits for public employees in Illinois must not be “diminished or impaired.”
(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)