Illinois lawmakers proposed a new plan  Dec. 5 to correct the Illinois’ pension system, which is currently the most underfunded in the nation.

The bill was introduced by Elaine Nekritz, D-Northbrook, representative and chairwoman of the House Personnel and Pensions Committee, State Rep. Daniel Biss, D-Evanston, and other colleagues. House Bill 6258 called for an eventual raise in employee contributions by 2 percent, later retirement ages for younger employees and limited cost-of-living adjustments. It would affect all five of Illinois’ pension agreements, including the State Universities Retirement System that manages pensions for University employees.

“We need to do something, and we need to do something sooner rather than later,” said State Rep. Dave Harris, R-Arlington Heights, and sponsor of House Bill 6258. “Our state is being ruined financially by our increasing pension obligations.”

In April, Gov. Pat Quinn drew attention to the pension problem, which has about $96 billion in liability, and continued his efforts to raise awareness by launching the “Thanks in Advance” online campaign Nov. 18.

When Quinn came to speak on campus Dec. 6, he said he was confident there would be a bipartisan majority for pension reform by the time new legislators, which create a Democratic supermajority, are sworn in in January.

“I think it’s very helpful for the public to have a bipartisan showing of support for pension reform,” he said. “We have 34 days until Jan. 9, and we really have to use this opportunity after the election — so politics is kind of behind us of the Election of 2012 — (to) get everybody to work for the future of Illinois, for the common good.”

The General Assembly discussed pension reform at the veto session held Nov. 27-29, but further discussion will have to take place when the assembly reconvenes for a lame duck session Jan. 3-8.

Lt. Gov. Sheila Simon said she feels this step closer toward pension reform is both important and necessary.

“Without action, the strain pension payments place on our budget will crowd out funding for other priorities like education, public safety and health care,” Simon said in a press release Dec. 5.

Michael Zalewski, D-Summit, explained the impact the bill would have on University employees.

“SURS employees, depending on their age and salary, might see a slight increase in their pension contribution and increase in their retirement age,” Zalewski said. “The University of Illinois stands to benefit if this legislation passes. If we gain control of our mounting pension debt, we can begin to address serious funding shortages that have left our universities without adequate resources.”

The Senate Executive Committee discussed this at their meeting Dec. 10. John Kindt, chair of faculty and academic staff benefits, stressed the importance of voicing concerns as a decision regarding the bill has not been made.

“If people want to indicate their general concerns about any particular issue, now is the time,” Kindt said. “The ripple effect of anything that you say to a decision maker really does have an impact.”

Several University professors made their opinions known by submitting a reform proposal to the Institute of Government and Public Affairs, which has been an active participant in the pension discussion, on Dec. 10. Authors Avijit Ghosh, professor of business, and Jeffrey Brown and Scott Weisbenner, professors of finance, along with Northern Illinois University professor Steven Cunningham discussed changes to the bill that would specifically affect SURS.

The IGPA had proposed a new retirement system on Feb. 9 to reduce state government’s contributions into the University pension system. These payments are supplemented by worker and University contributions. Currently, the University estimates its pension payments for the upcoming fiscal year to be about a billion, an increase of $227 million from the previous year.

The new proposal now calls for lower employee benefits in exchange for lump-sum payments that would be deposited into a self-managed account. The plan also suggests ending state tax exemption and increasing University tuition to ensure current plans are funded and old pension promises are fulfilled.

Nekritz, though, said she plans to listen to and support other reform ideas because she feels that reform is necessary.

“We have supported other reform legislation and would definitely consider other good ideas moving forward,” Nekritz said in a press release Dec. 5. “But we must continue to push this issue forward and not let excuses get in the way of progress.”

Chrissy can be reached at [email protected].