What's the impact of Gov.'s pension fix?

Apr 30, 2012

Illinois Governor Pat Quinn wants state institutions, such as Northern Illinois University, to contribute to their workers' pensions.  Currently, the state pays the employer share of contributions.   Quinn's plan would slowly shift the responsibility for paying the "normal cost of pensions" to universities, community colleges and school districts. 

WNIJ's Dan Klefstad wondered if NIU would be forced to hike tuition to make up for the increased costs.  For answers, he spoke with Steven Cunningham, NIU's vice president for administration and human resources.  Dr. Cunningham says the Governor's proposal could have "a very serious effect" on tuition.  However, he says, NIU will take every step to minimize that.  He says it's not feasible to translate the full value of normal costs on tuition.  For example, he says, normal costs are about 12 percent of payroll.  If that were to be translated to tuition it would amount to "about a 44 percent increase in tutition which is not feasible, it's not realistic."


First "Listen" link: 
Steven Cunningham on the proposed fix by the Institute on Government & Public Policy


Second "Listen" link: 
Full interview with Dr. Cunningham

Cunningham says the state should continue to at least contribute 6.2 percent, which is the Social Security benchmark for private and public sector employees nationwide.  He calls that a "reasonable starting point" for any discussion about alternatives to the way Illinois pensions are funded.

Cunningham was specifically referring to the State Universities Retirement System, or SURS.  According to the SURS website the system serves 65 employers, including state universities, community colleges and state agencies.  SURS employs 120 people.  It provides benefit services to over 200,000 members throughout the world.