During last week’s Urbana-Champaign Senate Executive Committee meeting, Michael Sandretto, senate budget committee chair, stated the Illinois’ pension funds are “seriously underfunded.”

This includes the State Universities Retirement System, which administers the retirement system benefits for Illinois faculty and staff. Sandretto noted that from fiscal year 2004 to 2013, funds granted to SURS have decreased by 24.5 percent, and the program is now underfunded by $20.1 billion, $13.6 billion more than in 2004, according to The Daily Illini.

On Dec. 5, Gov. Pat Quinn signed Senate Bill 1, a reform of Illinois’ pension system, into law, and it was a fairly controversial move because of the effects on those retiring in the near future. Its goal is to fully fund the state’s pension deficit by the end of fiscal year 2044.

Before the bill was passed and signed, University administration, including President Robert Easter and Chancellor Phyllis Wise, sent out an email declaring their opposition to SB-1 and said it would “arguably lessen the retirement commitments made to employees and retirees.” 

Since the passage of SB 1, five lawsuits have been filed to challenge the constitutionality of the bill.

Those lawsuits bring up the question of fairness — does this reform compensate our public employees fairly? Not only were they told by employers to expect certain benefits upon retirement, but they were told by the Illinois Constitution that public pension systems are a contract, “the benefits of which shall not be diminished or impaired.” 

But SB 1 does just that — diminishes and impairs those benefits.

Under the bill, the retirement age increases, cost-of-living adjustments are reduced and a salary cap of $109,971 is applied to all employees.

The salary cap means those who currently make more than the proposed number will see unfair benefits upon retirement, despite the large contributions they have made as employees of the University.

With SB 1 going into effect on June 1, those retiring after June 30 will be worse off because what they had expected to receive for all of their work is now underfunded. The plans they originally made may now be negatively impacted because of the changes made to their pension plans and the loss of benefits. 

According to Sandretto, Tier I faculty (those hired before Jan. 1, 2011,) receive contributions of 15.5 percent, and Tier II faculty receive 14.5 percent for their retirement plans. Meanwhile, the Big Ten currently averages contributions of 26.4 percent.

To help make up for the benefits cut in SB 1, the SEC has voted to have the Board of Trustees establish a supplemental retirement system for SURS-eligible University employees. 

Though there are no firm plans yet, a supplemental system will hopefully give University employees more immediate benefits that cater to the work they have done over the years.