Early retirement proposal defeated
January 15, 1993
Early retirement legislation that had wide support among faculty members was defeated Tuesday night because a powerful labor union refused to endorse it.
At a Wednesday press release, Board of Regents Chancellor Roderick Groves said the plan, known as 10-30, was, “opposed by some significant union personnel who apparently were influential with the legislative leadership.” Groves later confirmed that the opposition came from AFSCME.
Phil Adams, legislative liaison for the Regents, said AFSCME’s refusal to support the legislation was the main factor that kept it from being introduced in the legislature. The bill also lacked support from the Illinois Education Association.
Adams said the legislation was subject to the agreed bill process which requires agreement between university governing boards and labor unions representing employees in order for bills to be introduced.
The Board of Regents, the Board of Governors and the governing boards of Southern Illinois University and the University of Illinois had all accepted the 10-30 proposal, Adams said.
However, the refusal of AFSCME to agree with other unions who supported 10-30, prevented the plan from being introduced into the legislature, Adams said.
The 10-30 proposal would have allowed university faculty members with 30 years of service to retire with their full pension. According to Kate Romano, NIU retirement benefits counselor, NIU has 48-year-old faculty members who would have qualified under this proposal.
Early retirement plans are popular cost-cutting devices which encourage employees with more seniority and correspondingly higher pay checks to retire early.
The vacancies sometimes remain unfilled unless the jobs are turned over to younger employees with less experience who demand a smaller paycheck.
An additional component of the 10-30 legislation would have allowed younger employees with fewer years of service to retire early. Romano said a good example of this benefit would be an employee retiring after 10 years of service who did not meet the 30-year service requirement.
She said such an employee would receive 16.7 percent of an average month’s salary during his or her highest four years of earnings under existing retirement benefits.
With the proposal, such an employee could boost the payments by another 1.67 percent by paying 6 percent of his or her highest annual salary rate as a penalty.
Romano said the university would have to pay an additional 20 percent of the employee’s highest annual salary rate. The retiree then could receive 18.37 percent of his or her average monthly salary during the highest four years of earnings, she said.
The legislature did pass some early retirement benefits this week which Groves called, “The thinnest of thin excuses for an early retirement plan.”
Romano said the legislation that passed had been attached to the original 10-30 legislation. “The main train derailed and all we got was this sidecar,” she said.
The passed legislation requires the university to pay both the employee and university portion of the penalty for one year.
Instead of receiving the permanent benefits of the 10-30 plan, faculty members who wish to retire under the more limited benefits which did pass must file their intent to retire before June 30 of this year.
Mitch Vogel, president of University Professionals of Illinois, had supported the 10-30 plan. “I am somewhat amazed by (AFSCME’s) lack of support for the plan.” Vogel said he did not see how AFSCME’s actions benefited the employees it was representing.
Steve Trossman, director of AFSCME Public Relations, said the proposal hurt the chances of faculty pay raises.
“The problem was the money that the universities contributed (under 10-30) was from personnel departments. Every dollar that went to early retirement came from money that could have gone to pay raises. It’s like robbing Peter to pay Paul,” Trossman said.
Groves said, “I think that’s true of any early retirement plan.” He explained that any plan, including the one passed, is done with personnel funds.
Trossman said AFSCME would attempt to negotiate pay raises this year with the personnel money saved.
Groves, however, said there were no guarantees pay raises will be available as a substitute because the 10-30 plan failed.
Groves also questioned AFSCME’s support of the legislation that did pass. “It doesn’t seem consistent to support one and not the other.”
Sources involved with the process said AFSCME’s lack of support may have been done as a move of retribution against the University of Illinois. For the last two years, AFSCME and U of I have been negotiating a dispute between clerical employees and university officials. The dispute was solved last weekend, with the union making concessions, sources said.
Vogel said, “U of I has treated AFSCME miserably.” But Vogel said he thought it unlikely that AFSCME would not support 10-30 for this reason. He said it seemed to be too contrary to their own interests.