EIU President Would Consider Phased-In Pension Costs
With Illinois' pension debt climbing, the President of Eastern Illinois University suggests his school could handle those costs for retiring employees, if phased in gradually.
Governor Pat Quinn has floated the idea that pensions normally covered by the state could be shifted to universities and school districts.
The proposal was made as William Perry appeared before a Senate Committee in Springfield Wednesday. In EIU's case, that amounts to about $20-million. Perry says it would take at least five years, likely ten, for the university to phase in the state's contribution for pensions.
And he says that period would vary for other universities and their budgets, but each of them would have to hold open debates with state officials.
"The trust between the state goverment, the universities, and the university employees - that triangle of trust has to be strong," Perry said. "I think right now people are feeling like with change coming along, the trust they've put in the system for so long is at risk, so we have to be really careful on the trust side."
Perry says if the employer contribution to pensions was to change, the next logical step is finding a stable base of funding.
"If you kept your general revenue funding equal or even increased it a bit, if you're having to take money from other places in the university or from the general revenue appropriation to use to take care of employer contribution, it's still going to be a cut on your budget and a strain on your budget," Perry said. "We know that we can't just pass this off on the students in tuition."
For the long term - Perry says a sustainable model for pension could be achieved through a hybrid - a defined benefit and contribution - a model suggested by two University of Illinois faculty members.
Perry says an overhaul of the State Universities Retirement System, making it more like the private sector holds merit.
The model was recently proposed by Robert Rich and Jeffrey Brown with the U of I's Institute of Government and Public Affairs.