NIU's Peters says pension reform must be fair to all

Jun 22, 2011

Efforts to repair the state’s failing pension system should not punish those who have faithfully paid into that system, Northern Illinois University President John Peters said today in his keynote address at the State University Annuitants Association annual meeting.

“It is unfair to lay this problem at the feet of employees and annuitants. In the history of the Illinois pension system, they have never failed to pay their share on time,” Peters told the assembled retirees. “The answer to the state’s pension problems should not result in diminished benefits – for you, or for our current employees.”

The issue is of particular importance to state university employees as the SURS pension system replaces Social Security. Participants have no other retirement “safety net” in the event the state fails to meet its obligation.

Peters noted that the $82 million unfunded liability in the state’s pension funds (the largest such shortfall in the nation) is the result of the state legislature repeatedly choosing to defer its constitutionally required contributions. That situation could have been avoided, Peters speculated, but for a fateful decision 50 years ago to move responsibility for funding the nominal cost of the university pension system from the universities to the state.”

“Had they not made that change, I maintain that there would be no unfunded liability and we would not be discussing this issue today,” he said.

Worrying about mistakes of the past, however, will not solve current problems, said Peters, who vowed that he and his fellow university presidents and chancellors will be at the table this fall to hammer out a solution that is fair to all.

“Leaders in public higher education in Illinois must suggest viable alternatives that will address the very real financial distress confronting our pension systems,” he said. “We can argue about root cause, but the problem remains, and it is essential that higher education leaders put forth plans and options to resolve this crisis.”

Those negotiations are likely to be among the most important ever for state employees, Peters said, noting that the decisions made will have consequences for years to come. He called upon the SUAA membership to remain vocal throughout that process. He described annuitants as the “boots on the ground” that helped prevent potentially hasty and damaging decisions during the recently concluded legislative session.

“We will need you again this fall,” he said. “I am certain that these issues will once again take center stage during the veto session and we simply must get it right this time. We cannot afford to fail.”

Efforts to salvage the system by increasing the burden on state university employees and retirees is a symptom of a larger problem, Peters said. It is an example of how the social contract between the state and higher education has been strained to the breaking point in recent years.

America is reducing its support for higher education while foreign countries are spending more, putting America at a disadvantage in the global marketplace, he said.

“For more than 150 years we as a nation defined higher education as a public good,” Peters said. “Today, it is cast as a private benefit instead of the best possible investment in the future of the people of this state and our nation.”

Explore further: Rural loss and ruin can be avoided

Provided by Northern Illinois University

not rated yet
add to favorites email to friend print save as pdf

Related Stories

California state pension funds going broke, study finds

Apr 06, 2010

(PhysOrg.com) -- California public employee pension systems are worse off than anyone previously projected, according to a new report generated by five graduate students in Stanford's Graduate Public Policy Program. The result ...

The kids are alright

May 26, 2011

Children should be seen and not heard... who says? A Philosophy academic at The University of Nottingham is challenging the adage by teaching primary school children to argue properly.

Research may help states address unfunded retiree liabilities

Jan 13, 2010

Research shows that, nationally, states are facing more than $550 billion in unfunded liabilities associated with health care and other non-pension benefits for retired state employees, a situation many states are now struggling ...

Recommended for you

Shrinking dinosaurs evolved into flying birds (w/ Video)

16 hours ago

A new study involving scientists from the University of Southampton has revealed how massive, meat-eating, ground-dwelling dinosaurs evolved into agile flying birds: they just kept shrinking and shrinking, ...

Congressional rift over environment influences public

20 hours ago

American citizens are increasingly divided over the issue of environmental protection and seem to be taking their cue primarily from Congress, finds new research led by a Michigan State University scholar.

Rural loss and ruin can be avoided

22 hours ago

An Australian Reconstruction Development Board needs to be established to help avoid more needless forcing of Australian farmers from their land, a QUT economist has said.

User comments : 0