SPRINGFIELD — Northern Illinois University President John Peters on Tuesday warned current and retired state university workers to brace for possible changes to their pension benefits in the fall.
By Diane Lee
SPRINGFIELD — Northern Illinois University President John Peters on Tuesday warned current and retired state university workers to brace for possible changes to their pension benefits in the fall.
“Make no mistake, my friends, what happens in Springfield, this fall, regarding pension reform and annuitant health-care policy changes is of critical importance to every annuitant in the state of Illinois,” said Peters, referring to an annuitant as a person who receives pension benefits.
Peters asked State University Annuitants Association, which represents current and retired faculty and staff working to preserve their pensions, to suggest solutions to state lawmakers in order to resolve the state’s growing pension problem.
“In my opinion, leaders in public higher education in Illinois must suggest viable alternatives that will address the very real financial distress confronting our pension systems,” he said.
Illinois’ five taxpayer supported pension systems, including pensions for university workers, are underfunded by $130 billion. To control that debt, lawmakers passed pension reforms this past year that trim costs for future workers.
Kelly Kraft, Gov. Pat Quinn’s budget spokeswoman, said this past year’s reforms will save $200 billion over the coming decades for future employees, but they do little to address costs associated with current workers and current retirees.
This past spring, leaders in the Illinois House proposed to change current benefits by having current employees pay more for their benefits, see reductions, or have retirees pay for some of their health-care costs. State lawmakers are expected to revisit reforming pensions for current employees in the fall veto session.
But Peters said workers who made their contributions deserve full retirement benefits, and the state hasn’t lived up to its promises. He pointed to state lawmakers history for skipping or making partial pension payments to the Illinois pension systems.
“Many individuals on our state Legislature didn’t learn that lesson, or maybe they forgot that lesson: Once you make a deal with somebody, you keep it,” Peters said.
Leo Welch, president of State University Annuitants Association, said the Illinois Constitution guarantees that once staff and faculty join the system, their pensions cannot diminished nor impaired.
“We fully support the constitutional provisions that protect current employees, as well as current annuitants,” Welch said.
State Rep. Bob Pritchard, R-Hinckley, said the state will need to address pension payments, but the constitutionality of possibly changing pensions for existing workers will need to be decided in the courts.
“It is in everyone’s best interest that these pension systems not fail. That is where we are headed if we don’t do something,” Pritchard said. “Sooner or later, they are going to run out of assets, and what are they going to pay people with?”
It’s not just payments to retirees. A new report from the Illinois Policy Institute, a free market think tank, states that within a decade, Illinois will be paying more for university retirements than to run the state’s colleges and universities.
Northern Illinois University, like many other universities in Illinois, has raised tuition as state money for operations dwindles.
However, Welch defends tuition hikes, as a down payment for young people and their families.
“The state should view higher education, as well as education in general, as an investment as opposed (to) viewing it as a cost,” Welch said. “If the economy is going to recover, it is going to depend on educated citizenry in the state of Illinois.”