Thu May 8, 2014
A Different Take On A State Pension Law Could Stop Flood Of Retirements
State university employees are rushing to retire because of last year’s state pension reform law. Now a new interpretation of that law indicates it may not drastically reduce pension amounts for some retirees after all.
Many more professors and staffers than usual are retiring at the end of June because of a quirk in the pension reform law. Some were told by the State University Retirement System (SURS) they needed to retire immediately or face a large reduction in their pensions. Now William Mabe, director of the retirement system, says SURS will change its interpretation of what’s believed to have been an error in the law’s language. That’s what the state’s Teachers Retirement System did: they assumed it was an error and that the law’s intent was NOT to cut pensions. SURS will follow TRS’s lead.
Still, there are a number of groups suing the state over the pension reforms. And some lawmakers have filed corrective language for the bill. This comes too late for the unknown number of university employees who took retirement earlier than they would have liked.
Illinois House Speaker Michael Madigan weighed in on the interpretation of the bill earlier this week. He said in a letter SURS was misinterpreting the intent of the legislation, and should have caught the language error before the legislation was approved.