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I have been following this closely. The pension changes apply to new hires after either June 30th of 2010 or January 1, 2011. At this date it does not impact current employees or retirees. I knew there would be changes. What I expected is that there would be an increase in age to retirement and a cap on pensions of in the neighborhood of $150k. The worst of the new changes is a 6% reduction per year for every year of retirement before 67 and a reduction of the COLA. The COLA would not be compounding and it would be 1/2 of 3% or the CPI which ever is less. There are a lot of unintended consequences and un-thought of consequences to these changes. To name just a few; recruitment of faculty, the fact that when new employees think about selecting a retirement option they may decide to select the Self Managed Plan, further stressing the traditional SURS or other retirement plans, the use of disability to retire before 67 without penalty, etc. And the impact of these changes would be devastating to those who may not have the flexibility of professors or administrators. The Trib had an editorial piece today that said these changes did not go far enough, that there needed to be changes for existing employees going forward. That is very scary! And finally all of these changes do little for the unfunded liability of the pension systems today. In fact it is likely Quinn will not make the required full funding of the pension systems this year because he will argue that these changes save so much money over the long run that he can take some of those savings now. Of course this is what Blago did and that exacerbated the pension crisis that was gathering steam in the mid 2000's.
Jeffrey S. KaiserUPI/GSU Webmaster j-kaiser@upigsu.org |