May 15, 2012
Upcoming Days Are Key Concerning Pensions, Benefits
1.) State Employees pay a higher percentage of a monthly salary into the pension
fund; 2.) State contributions to the
pension fund shift to the budgets of local governments and public
universities/colleges; 3.) Cost of living
increases curtailed or limited for pensioners; 4.) Increased costs for health
care placed on pensioners (this legislation is waiting for Governor Patrick Quinn’s signature; see article below); 5.) Increase the age limit of when an employee
can take a pension; 6.) Increase the
burden of working after retirement -- in terms of reduced pensions or cost --
to the public university/college.
THE GOVERNOR has asked business leaders to back
his pension reforms and pressure the General Assembly to pass them (see http://www.sj-r.com/top-stories/x85614209/Quinn-Reform-plans-a-rescue-operation),
while opposition is gearing up (see : http://www.sj-r.com/breaking/x1986333006/Unions-gear-up-to-oppose-pension-changes).
IN THE end, whatever happens this week or
the next, if legislation is signed into law it is likely to be challenged in
court.
Free Healthcare for Retirees on the Way Out
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Legislation passed by
the Illinois General Assembly
will have retirees pay for healthcare.
(Photo
courtesy stock.xchng.)
|
“THIS LEGISLATION will help ensure that our retirees continue to have access to quality health care while also lowering the cost to taxpayers," Quinn said.
THE AMOUNT of premiums retirees will pay will be established by Central Management Services (CMS), and then recommended to the State Legislature's bi-partisan, bicameral J-CAR (Joint Committee on Administrative Rules) for approval before being put into effect.
IN OPPOSITION, AFSCME (American Federation of State,
County, and Municipal Employees) Council 31 said, “The legislation would remove
the current schedule of State-supported health benefits and leave it to the
discretion of CMS. This means CMS could charge whatever they choose to for
premiums or completely eliminate any subsidy for retiree health insurance all
together. This legislation breaks a commitment to affordable health care
coverage for State and University retirees, including thousands who were
encouraged to take early retirement and do not qualify for Medicare.
“IN THE past, retiree health benefits were
decided through the collective bargaining process and only then would any
changes be enacted into law,” AFSCME continued. “The collective bargaining
process should be honored, and this issue should be a subject of collective
bargaining. Through collective bargaining, health care benefits have been made
more affordable to the State. Shifting the costs of health insurance premiums
will not reduce the cost of health care, it will only reduce the standard of
living for Illinois retirees.”
IN THE Springfield State
Journal-Register of
May 10, Sen. Larry Bomke
(R-Springfield) said he thinks the bill is unconstitutional because it applies
to people who retired years ago from the State with the expectation of
receiving health insurance at no premium cost if they worked 20 or more years
for the State. The benefit was put into state law in 1997. Bomke said the
change should only apply to future retirees.
BOMKE SAID, “To vote yes on this bill will simply mean that we’ll have a court challenge, we’ll spend millions of dollars we don’t have trying to defend it, only to realize it’s not constitutional.”
BOMKE SAID, “To vote yes on this bill will simply mean that we’ll have a court challenge, we’ll spend millions of dollars we don’t have trying to defend it, only to realize it’s not constitutional.”
Your Take Home Salary is About to be Cut
APAC EXPLAINS why employees who are not planning to retire soon should care about the pending pension legislation:
YOUR TAKE-HOME salary is likely to be cut. Increased contributions to pay for the State Universities Retirement System (SURS) mean increased deductions from your paycheck, and less money for you. It is basically a pay cut to pay for the lack of contributions to on the part of the State over the years.
WHAT IS next? The State has already approved legislation that will eliminate State payments for health insurance coverage for currently retired employees (see related article
below). Do you have an extra $15,000 to $23,000 (or more!) per year to pay for your insurance if the State makes the same decision for current
employees?
THE PROPOSED pension reform will set a precedent of saving the State money by cutting University employee benefits. Do you think the State is planning to give the University any funding for salary increases in the near future? Do you think the State will hesitate to cut our salary or benefits in the future the next time they
need to save money?
THE SURGE in retirements won't reduce the amount of work that needs to be done - the burden and responsibilities will fall to other staff until new employees can be hired to
fill vacated roles. You should not anticipate a pay raise to compensate all of your extra hours and new work.
THE EXISTING SURS legislation has language that is intended to protect current employees from changes to the pension system that "diminish" benefits for current employees.
Governor Patrick Quinn, as well as other current Illinois Senators and Representatives, are considering aggressive
steps to cut our pensions anyway. If Illinois State law can't protect us, what will?WHOM SHOULD you contact? Your State Senator and State Representative. Why don't you give them a call and let them know what you think about what they are doing? Find them at
Opposition Weighs In On Drastic Pension Cuts
AFTER GOVERNOR Patrick Quinn on April 20 unveiled his plan to
alter State Universities Retirement System (SURS) and other pensions by raising
the retirement age, increasing employee contributions, and threatening to
withhold retiree health care for those who do not accept the new plan, the
opposition weighed in.
THE WE Are One Illinois organization, a coalition of labor organizations working to protect public employee pensions, issued the following statements.
THE WE Are One Illinois organization, a coalition of labor organizations working to protect public employee pensions, issued the following statements.
“FOR MORE than a year, Big Business interests have been waging an
unrelenting campaign to eliminate public-sector defined-benefit pensions in
Illinois. Time and again, the We Are One Illinois labor coalition has fought
them to a standstill.
“NOW THAT battle has gotten even tougher. With the State budget in
crisis, due in part to the enormous unfunded pension liability that must be
paid down, political leaders are starting to jump on the pension slashing
bandwagon.
“WE ARE One Illinois immediately issued a statement rejecting the
Quinn plan, which would shift responsibility for the unfunded liability to
employees—despite the fact that those same employees have always paid their
share into the pension funds, while the State has too often failed to do so.
“HERE’S WHAT’S really disturbing, though: Growing numbers of legislators
who have stood with us against slashing pension benefits in the past are now
voicing support for the Governor’s plan.
“NO DOUBT the pension underfunding problem is dire, and ensuring
that our pension systems are sound is a top priority for all public employees.
But labor’s position is clear: Any changes to the pension systems must be fair
to employees, constitutional, and developed through a process that includes the
unions that represent public employees.”
WE ARE One included a toll-free hotline that will help
interested parties call their State Representatives and Senators: (888)
412-6570.
IGPA Has Alternative to Governor’s Plan
THE PLAN concentrates on the State Universities Retirement System (SURS) and is designed to reduce the State government’s payments into the system by billions of dollars over time.
“PENSIONS REPRESENT an important component of the overall compensation package for university employees and is key for us recruiting top-notch individuals,” said Robert F. Rich, director of the Institute of Government and Public Affairs, who developed the proposal with Jeffrey R. Brown, an IGPA professor and the William G. Karnes Professor of Finance at the U of I’s Urbana-Champaign campus.
THE PLAN is intended to stimulate discussion among policymakers and legislators and is not intended to reflect the position of the University of Illinois, the authors said. Although the authors consulted with a large number of experts, they stress that the opinions expressed in the plan are their own. The full proposal can be found here. It contains several components that reflect some of the ideas that have been publicly discussed by State leaders in recent weeks.
THE PROPOSAL has four basic components: 1.) Create a new hybrid retirement system for new employees that would combine a scaled-down version of the existing SURS defined benefit plan with a new defined contribution plan that would include contributions from both employee and employer; 2.) Peg the SURS “Effective Rate of Interest” to market rates; 3.) Redistribute the SURS funding burden to include a modest increase in employee contributions and new direct contributions from universities, thereby reducing state government’s burden on state government; and 4.) Align pension vesting rules with the private sector, which would decrease the years new employees hired after Jan. 1, 2011, would need to work for their pension benefit to be vested.
THE PROPOSED reforms assume that all accrued benefits of current employees would remain unchanged up to the point reforms are implemented and that changing from an existing plan to the new hybrid plan would be voluntary for current employees.
"THIS PROPOSAL is designed to reduce costs by approximately as much as Senate Bill 512 (another drastic pension-cutting bill that has come up in the General Assembly from time to time), but in a manner that does a much better job of providing secure retirement benefits to employees,” Brown said. The proposed reforms to SURS reduce costs to State government, provide a better approach to sharing the funding burden, and provide a balanced and attractive approach to retirement security for employees, Brown and Rich said.
Senates Conference Committee Calls for Fair Resolution of Pension Crisis
THE DOCUMENT says any reforms being considered should maintain benefits
promised to current participants.
“THE RESOLUTION embraces pension funding principles espoused by the Institute of
Government and Public Affairs (IGPA) of the University of Illinois,” said Dr. Donald A. Chambers, Chair of the
University Senates Conference and Professor of Biochemistry and Molecular
Genetics at UIC. “The USC resolution is a sign that the highest group in the
shared governance structure of the University of Illinois recognizes the need to
address the SURS funding shortfall and for shared obligation.”
ON APRIL 30, the University of Illinois at Urbana-Champaign Senate
unanimously expressed its support for the document.
THE FULL resolution and links to additional information are below.
Resolution on Pensions
University Senates Conference
April 27, 2012
THE UNIVERSITY Senates Conference (USC), in its role as a faculty elected
advisory body to the President of the University and the Board of Trustees,
recognizes that the funding basis for the State University Retirement System
(SURS) is not sustainable in its current form. Previous underfunding of the
system has made SURS unable to continue to pay out benefits indefinitely at
current levels, even though participants have fully contributed their portion
of responsibility for the system.
AS HAS been documented, Illinois ranks 50th among the 50 states in
adequately funding its public pensions. This situation cannot be allowed to
continue; retaining and recruiting top faculty to our universities will be
increasingly difficult unless this issue is addressed.
TODAY WE face a reality in which sensible, equitable reforms are needed.
The USC writes to acknowledge this reality and to seek a constructive way
forward. Reforms will be needed in order to return the SURS system to a sound
financial footing, and all stakeholders — participants, the universities, and
the State — have a necessary role to play in such reforms. These reforms must
be guided by certain agreed-upon principles, the most important of which is
fairness to university employees who entered the system on the basis of certain
understandings and commitments that need to be honored.
OTHER PRINCIPLES also seem to us reasonable and prudent as a solution is being
worked out. Many of these principles are laid out and defended in the IGPA
report authored by Jeffrey R. Brown
and Robert F. Rich: Fiscal Sustainability and Retirement
Security: A Reform Proposal for the Illinois State Universities Retirement
Systems (SURS), Institute of Government & Public Affairs, University of
Illinois, Urbana-Champaign, Chicago, Springfield, Feb. 9, 2012.
- Any reformed SURS system must be financially sustainable for the State, the universities, and the participants, and it must respect existing constitutional protections of already-accrued benefits;
- All promised benefits to current participants and annuitants should be maintained, as guaranteed by the State Constitution (Article 8, Section 5 General Provisions);
- Existing unfunded liabilities must remain the State's responsibility, and the State must provide credible guarantees that future payments will be made on time (such as through a clause that state contributions to the system must have priority);
- In addition, the State should continue to make its contributions to the system at a level at least equal to the level of what it would be paying to Social Security (6.2% of pay) along with its contributions to health care;
- Any transfer of normal costs to universities must be nominal, and phased in gradually;
- Any reform must include improvements to the current Tier II program for new employees, as suggested in the IGPA position paper referenced above (this could include a hybrid plan combining some elements of defined benefits and an employee self-managed plan), and this revised program should also be available to Tier I employees;
- Any change in participant contributions must involve consultations with those affected. The USC is ready to participate in further discussions in order to seek a constructive resolution to these issues.
THE UIC Senate Executive
Committee on May 2 passed the following resolution:
“The
UIC Senate requests that the State of Illinois' Legislature engage the
University of Illinois' faculty and staff in consultation regarding any proposed
changes to the State University Retirement System (SURS). The Resolution on
Pensions, passed unanimously by the University Senates Conference on April 27,
2012 and endorsed by the UIUC Senate, should serve as a starting point for
meaningful discussion.”
“LEADERS OF our State's public
universities have been engaged on their respective campuses and in Springfield
for over a year to identify an equitable solution to the unsustainable pension
funding shortfall,” said University of Illinois President-Designate Robert A. Easter and President Michael J. Hogan in a May 4 e-mail. The
day before, the Presidents and Chancellors of the State's public universities
acted in unison to provide a "Statement of Objectives" for resolving this issue. They did so in a letter
to Governor Pat Quinn and to the
four leaders of the State House and Senate.
THE LETTER states that any
changes affecting SURS must provide "a credible certainty of retirement
security to our employees." It lays out principles and specific conditions
essential for a successful pension stabilization proposal. "It must also
be financially sustainable for the State, the universities, the participant,
and it must respect existing constitutional protection against impairment of
already-accrued pension benefits," the letter stated.
FOR MORE information:
IGPA REPORT: http://igpa.uillinois.edu/pensions/SURS-paper.
USC TRANSMITTAL letter: http://www.uillinois.edu/our/news/2012/Apr30.USCtransmittal.pdf.
THE PRESIDENTS’ letter: http://www.uillinois.edu/our/news/2012/May3.StateUnivPresidentsLtr.pdf.
SEE ALSO Springfield
News-Gazette coverage
at www.news-gazette.com/news/education/2012-05-01/ui-senate-backs-principles-pension-reform.html.
SURSMAC Calls for Pension Protection
THE STATE UNIVERSITIES Retirement System Members Advisory
Committee (SURSMAC) on May 8 passed a resolution calling for protection of SURS
pensions.
THE RESOLUTION’S highlights include a call that “all
promised benefits to current participants and annuitants should be maintained,”
and that “existing unfunded liabilities must remain the State’s
responsibility.”
SURSMAC INCLUDES representatives of all institutions
covered by SURS, as well as two retiree representatives. The 19-member panel
advises the Board of Trustees of SURS.
FOR THE full resolution, see below:
SURSMAC Resolution on Pensions
Adopted May 8, 2012
Whereas, Previous underfunding of the
State Universities Retirement System (SURS) has made SURS unable to continue to
pay out benefits indefinitely at current levels even though participants have
fully contributed their portion of the required amounts; and
Whereas, Given Illinois ranks last
among the 50 states in adequately funding its public pensions, this situation
cannot be allowed to continue since retaining and recruiting top faculty and
staff will be increasingly difficult unless the issue is addressed;
Whereas, All
stakeholders---participants, colleges and universities, and the state of
Illinois—have a necessary role in any reform to bring the SURS to a sound
financial state; and
Whereas, Reforms must be guided by
agreed upon principles, the most important of which is fairness to participants
and annuitants who entered into the system on the basis of certain
understandings and commitments that need to be honored;
Resolved, That any changes to SURS must be
financially sustainable for the State, the institutions, and the participants
and must respect existing constitutional protections of already-accrued
benefits;
Resolved,
That all promised benefits to current participants and annuitants should be
maintained, as guaranteed by the State Constitution (Article 8, Section 5
General Provisions);
Resolved, That existing unfunded liabilities
must remain the State’s responsibility with credible guarantees that future
payments will be made on time;
Resolved,
That the State should
continue to make its contributions to SURS at a level at least equal to that it
would be paying to Social Security (6.2% of pay) along with its contributions
to health care;
Resolved,
That any transfer of
normal costs to institutions must be nominal and phased in gradually;
Resolved,
That any reform must
include improvements to the current Tier II program for new employees and this
revised program should be an option for Tier I employees; and
Resolved, That any changes in participant contributions must
involve consultations with those affected.
Medicaid Cuts Could Impact UIC Bottom Line
THERE ARE three components of
Quinn’s plan: a $1 a pack increase in the cigarette tax, an across the board
cut to Medicaid providers of $625 million, and 58 line item cuts that total up
to $1.35 billion.
CUTS TO providers could “jeopardize access to
care” and “bear the brunt of costs” on healthcare facilities such as UIC’s,
argues Larry Joseph, the fiscal policy director for Voices for Children
Illinois.
PRIVATE HEALTHCARE
practitioners can refuse to treat Medicaid patients, and more are likely to do
so with lower State Medicaid reimbursements. Public healthcare facilities such
as UIC’s, though, cannot legally deny patients. So less money from the State
could lead to a number of collateral issues, including healthcare facilities
passing on the costs to all their patients, and also laying off staff,
according to the Campaign for Better Health Care.
THE LINE item cuts include reductions in preventive
care services like an Illinois Cares RX program for prescription drugs and also
adult dental services.
Editor’s
note: The above article is from Matthew
Blake, Progress
Illinois. For an alternative to the
State’s plan for Medicaid cuts, see “Safety-net hospital group proposes
alternatives to Illinois Medicaid cuts,” Gazette, May 4, 2012: www.gazettechicago.com.
HR, SUCCS Reach Deal on Research Personnel AP Status
UIC HUMAN Resources has been
working closely with both the Research Advisory Council and the Executive
Director of the State Universities Civil Service System (SUCSS) to come to an
agreement about which research jobs should be exempted from their system and
classified as Academic Professional and which should be Civil Service
positions.
“I AM very happy to report
that SUCSS has agreed to a framework we developed in conjunction with members
of the Research Advisory Council,” said Maureen
Parks, Executive Director and Associate Vice President of Human Resources.
THIS FRAMEWORK detailed the key job
characteristics, research activities, and skills for the Research Specialist
and Research Technologist positions.
Both the “Research Specialist” and “Senior Research Specialist” will be
designated as Academic Professional. “Research Technologist I” and “Research
Technologist II” will remain Civil Service.
“HAVING THESE positions carefully
defined will make our job analysis process much more expedient and will allow
departments the necessary flexibility needed to hire qualified staff,” Parks
said. “While there are still a couple of outstanding issues, this is a great
stride in the right direction.”
THE UIC Human Resources office still has
several steps to take to implement this new structure, including developing
generic standard job descriptions for each title. “We are also in the process
of developing a communication plan for sharing this information with the
Research Advisory Council, HR Professionals, hiring managers, and the UIC faculty,”
Parks said. “The UIC HR team understands the criticality and urgency of this
issue and we will work as quickly as possible to put plans into action.”
APAC SURS Town Hall Meeting Held
Lee Bridges talked about retirement and pensions at a
Town Hall meeting.
THE PRESENTER was Lee Bridges, Members Services Representative, SURS.
RETIREMENT, PENSIONS, and pending legislation have captured the attention of the campus in recent months, and Bridges covered those issues and more.
A COPY of the handout from the presentation is available here.
Chancellor’s Academic Professional Excellence Award Nominations Due in June
THE CHANCELLOR’S Academic Professional Excellence
Award (CAPE) acknowledges the demonstrated excellence of Academic Professional
employees (APs). The CAPE Award honors the contributions of individual staff
members and encourages the professional growth and achievement of APs at
UIC. Each winner of the CAPE Award receives a $1,000 permanent salary
increase, a certificate and a pin. The names of the winners are added to the
CAPE plaque on the first floor of University Hall. In addition, a $2,000 one-time
cash award is given to each recipient. For nomination form, see http://sites.google.com/site/uicapac/resources/awards-and-recognition-programs/cape.
THE DEADLINE for receipt of nominations and
all supporting credentials is noon on Friday, June 29, 2012. The CAPE awards
will be presented in November at a reception as part of the UIC Employee
Recognition Week. 2012 Nomination forms are available here. If you have any questions,
please contact William S. Bike, Chair of the 2012 CAPE Selection Committee, at billbike@uic.edu
or at (312) 996-8495.
APAC Meetings Scheduled; All Invited
ALL
APs are invited to
the monthly APAC meeting at 12:30 p.m. on the second Wednesday of the month.
Meetings are held either in Room 5175 of the College of Medicine Research
Building, 909 S. Wolcott, or Room 2750 of University Hall on the East Campus.
SCHEDULED MEETINGS are June 13 in Room 5175 CMRB, July 11 in Room 2750 UH, Aug. 8 in Room 5175 CMRB, Sept 12 in Room 2750 UH, Oct. 10 in Room 5175 CMRB, Nov. 14 in Room 2750 UH, Dec. 12 in Room 5175 CMRB. For information, call (312) 996-0306.
SCHEDULED MEETINGS are June 13 in Room 5175 CMRB, July 11 in Room 2750 UH, Aug. 8 in Room 5175 CMRB, Sept 12 in Room 2750 UH, Oct. 10 in Room 5175 CMRB, Nov. 14 in Room 2750 UH, Dec. 12 in Room 5175 CMRB. For information, call (312) 996-0306.
APAC PROFILE: New APAC Member Ahlam Al-Kodmany Looks to Increase APAC Accomplishments
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Ahlam Al-Kodmany is a
newly elected APAC member.
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AHLAM AL-KODMANY, PhD,, a newly elected APAC member, is the Director of Financial Operations at the Institute for Health Research and Policy (IHRP) at the School of Public Health. Having been in this position for nine years, and at the University 23 years, Al-Kodmany says “no two days are alike.”
“THE PEOPLE at IHRP, from the investigators to the students, create a great environment to work in,” she said.
AL-KODMANY decided to get involved in APAC because she wanted to help make a difference in the work environment that “we as APs live in 8-to-12 hours a day,” she said.
WHILE SHE is new to serving on APAC, having been on board for two months, she is quite familiar with the work accomplished. “I’m proud of the high quality events sponsored by APAC the last few years, including sessions on SURS, the budget, retirement, and the Academic Restructuring Committee.” Al-Kodmany added that the commitment of the APAC Executive Committee, its input into campus policy, and its outreach across the Chicago campuses and University as a whole, are inspiring.
LOOKING FORWARD, she would like to see APAC achieve a few things, including influencing the University of Illinois Board of Trustees and the State Universities Civil Service System boards, noting, “UIC is not a one-size-policy-fits-all situation.” Al-Kodmany hopes APAC can put forth policies to protect the rights of APs, including seniority, professional development and advancement, and salary. She strongly believes that a degreed workforce is imperative at the University of Illinois.
AL-KODMANY encourages APAC members to attend monthly meetings and to volunteer on committees. She stated, “without your participation and assistance, it will be difficult to advance our goals quickly and efficiently.” She also added that non-members should consider joining because “APAC is a wonderful organization to have your ideas heard, and our collective goals realized.”
IN HER spare time, Al-Kodmany enjoys cooking and gardening as well as spending time with her family – her husband (and UIC faculty member) Professor Kheir Al-Kodmany and their four children Nur 10, Muhsen 9, Suendus 4, and Imran 1.
AP RESOURCE SPOTLIGHT: Resume & Cover Letter Resources
IN ORDER to help you with your professional goals, APAC has added a new page to our "Careers" section, Resume & Cover Letter Resources, with links to dozens of sample resumes and cover letters from leading employment websites such as Monster.com. There also are links to resume and cover letter writing tips, advice for interviewing, resume and cover letter templates from Microsoft Office, and more. Visit the new page at:
OTHER PAGES in the APAC Careers section include:
*UIC Job Postings, with quick links to the two HR websites that list on-campus position announcements.
*Training Offices & Campus Classes, with links to free on-campus professional development opportunities available from various offices.
*Waivers, Release Time & Mentoring, with links to campus policies that help support your professional growth.
*Professional Certifications, with links to programs to help your resume stand out.
THE CONTINUING CRISIS
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President Designate
Robert Easter.
|
DAILY ILLINI interviews President-Designate Robert Easter, May 2: http://www.dailyillini.com/index.php/article/2012/05/presidentdesignate_robert_easter_quotit_was_the_thing_that_i_needed_to_doquot
GOVERNOR ASKS business leaders to pressure General
Assembly to pass changes in our pensions, says Springfield Journal-Register of May 14: http://www.sj-r.com/top-stories/x85614209/Quinn-Reform-plans-a-rescue-operation.
UNIONS GEAR up to oppose pension changes, says Springfield Journal-Register of May 15: http://www.sj-r.com/breaking/x1986333006/Unions-gear-up-to-oppose-pension-changes.
Vol. 5, No. 5, May 2012
ISSN 1946-1860
Editor: William S. Bike
Writing Staff: Jennifer Costanzo, Ivone De Jesus, Tomeiko Sewell
Chair: Michael Moss
Vice Chair: Jennifer Rowan
Secretary: Jacqueline M. Berger
Treasurer: Virginia Buglio
Webmaster: Jeff Alcantar
Webmaster: Jeff Alcantar
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