Testimony, Springfield, May 16, 2013
University of Illinois President Robert A. Easter and Southern Illinois University President Glenn Poshard, on behalf of public universities’ presidents and chancellors, joined representatives of community colleges in Illinois to testify at a special legislative hearing in support of a proposal to shift responsibility for future pension benefits costs to the colleges and universities. [Read the AP story.]
The state of Illinois currently has the responsibility of funding the so-called “normal costs” of pension benefits for its public employees, including university and community college workers, but the system is grossly underfunded and various proposals are under consideration that would change benefits to restore financial viability of the system.
While those changes are still to be determined, the higher education leaders and legislative leaders tentatively agreed to a “cost-shift” plan over time. The state would be responsible for the current unfunded pension obligation, and the colleges and universities would be given time to prepare for and then transition to a pension benefits cost-shift over time:
- The cost shift would be effective in fiscal 2015, giving the colleges and universities a year to prepare
- The cost-shift would be at the rate of .5% per year, the time to completion being about 10 years
- Any new pension benefits enacted by the legislature would require the approval of the boards of trustees of the respective educational institutions and the board of the State Universities Retirement System (SURS)
- The SURS board would be reconstituted to include greater representation by public universities and community colleges
President Easter (right) and Southern Illinois University President Glenn Poshard testify on May 16.
President Easter said that the annual cost the the U of I is expected to be $5-6 million when fully transitioned to the institution.
Video and photos courtesy of UIS Office of Campus Relations: Blake Wood (video) and Shannon O'Brien (photo).