Editorial: Pension reform needs to look at big picture

Six to eight times more retirements this year than in any other, $85 billion in unfunded liability, 50th out of all the U.S. states in adequate financing – this is what Illinois’ government has done to the pension system.

Gov. Pat Quinn discussed the need for pension reform in his State of the State address, and other lawmakers have stressed the importance of finding a solution to the “pension problem” soon. However, their attempts at reform make the Northern Star Editorial Board question if they understand the need to balance reducing the government’s contribution with the importance of retaining and attracting educators.

NIU employees, who pay into the State Universities Retirement System (SURS), depend upon their pensions to get them through their post-retirement years. Without a good retirement package, public employees may have to find employment in other states, which will have long-lasting effects for everyone in Illinois.

Under a proposed solution from the Institute of Government and Public Affairs (IGPA), the state, employees and employers will all pay into the pension system. Similar plans have been proposed in legislation like Senate Bill 512, but the IGPA’s proposal is more attractive because it doesn’t increase what employees must contribute as much as other plans do – the IGPA would phase in an 11 percent contribution as opposed to SB 512’s immediate increase to a 15 percent contribution. NIU President John Peters has spoken in favor of the plan, which would alleviate some of the financial burden on the state without sending all professors and teachers packing.

If the government continues to focus solely on reducing its contribution, educators can and will take their talents to non-Illinois universities, where they are guaranteed better pension packages. This “brain drain” will effectively reduce the quality of education in Illinois as schools scramble to find teachers with good credentials who don’t mind having a crummy pension package.

In a March 8 article, the Northern Star reported that Steve Cunningham, vice president of Human Resources and Compliance, said he thought the uncertainty of the pension system has led to more retirements and will make recruitment more difficult.

It’s bad enough that the state has threatened the future of public employees; now, its proposed reforms may damage the future of the public and Illinois itself.

The government needs to look at the full picture – not just the numbers, but the people behind them. The pension system must be reformed so that the state is not financially overwhelmed, as it may be as more and more public employees retire. However, Illinois must retain an attractive SURS package to ensure professors don’t jump ship. Its reforms must also ensure that public employees who don’t use SURS, but one of the four other public pension systems, also receive good benefits.

The government’s underfunding of the pension system is what got the state into this mess. Its reforms need to ensure nothing gets worse.