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Spring NIU retirements total 183

Pension reform effects not as drastic as feared

Published: Saturday, July 12, 2014 12:10 a.m. CDT

DeKALB – The number of retiring Northern Illinois University employees more than tripled this spring, but the total was nowhere near the 800 employees university officials feared would leave in the wake of the state’s pension reform bill.

From January to June, 183 employees submitted retirement applications to the State Universities Retirement System, which covers employees from state universities, community colleges and state agencies.

“It turned out to be not too far from where we normally are,” NIU President Doug Baker said.

Almost 3,600 NIU employees are covered by the state retirement system. Those covered include faculty members, those in civil service and professional support staff.

Retirement system spokeswoman Beth Spencer said the agency received 2,726 applications in the first six months this year from across Illinois. That was almost 500 more than in all of 2013.

Only 60 NIU employees submitted retirement applications during the same period last year, according to the retirement system’s data. Through all of 2013, 110 NIU employees retired.

University officials, including those at NIU, cautioned that the pension reform legislation passed in December to address the state’s $100 billion unfunded pension liability would push their employees into retirement. The bill would cut cost-of-living increases and caps the amount of earnings that can be used toward retirement benefits in June and July, but it has been stayed pending a ruling on its constitutionality.

Some workers changed their minds about ending their public careers. Statewide, 122 people rescinded their applications. At NIU, 16 did.

Baker’s not sure how many of the vacant positions the university will fill. Vice presidents from the university’s various departments reviewed the positions and will determine which ones they feel are essential, which Baker said will help the university match financial resources to staff.

Paul Kelter, 60, was among the NIU employees to retire, although he hasn’t stopped working. Kelter retired from the Illinois public university system where he worked for 11 years – seven of them at NIU – but he’s now a professor heading two centers and a program at North Dakota State University.

He planned to retire from Illinois in 2016, but he didn’t want to risk losing 2 percent in annual increases under the new reform. The Illinois pension system is what drew him to teach in Illinois in the first place, he said.

“It’s like it’s the ninth inning of a baseball game where you’re winning and they change the rules,” Kelter said.

Marc Falkoff, an associate professor at NIU’s college of Law said the temporary injunction put in place by a Sangamon County judge in May staved off the wave of retirements because it alleviated some concern the law would go into effect while its legality was still being debated. He doesn’t expect to see a large exodus anytime soon because a ruling on pension reform could be as far as two years away.

“It’s not at all surprising to see some people who had made this life decision to retire,” Falkoff said. “I’m also not surprised there wasn’t an avalanche.”

A ruling handed down by the Illinois Supreme Court last week that declared it was unconstitutional for the state to require retirees to pay for a portion of their own health care could be the nail in the coffin for the pension reform legislation, Falkoff speculated.

“There could not be a stronger indicator that the pension reform law is unconstitutional,” Falkoff said.

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