University of Illinois President Warns about Pension Deal

Before he knew the contents of the final pension deal reached this afternoon, University of Illinois President Robert Easter warned his faculty in a memo that upcoming pension reform could be “onerous for public employees.”

University officials are warning that severe cuts to retiree benefits could cause a brain drain.

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“Without a competitive package of compensation and benefits,” says U of I spokesman Tom Hardy, “it will become more difficult to continue to recruit and retain the brightest minds to teach or do research here.”

Instead, Hardy says, the university supports different measures to create a hybrid pension/401k-style defined contribution plan, and to gradually shift the burden of paying for pensions away from the state and on to the university – a provision more commonly known as the “cost shift.”

“This is a good, defensible, reasonable and rational approach that helps the system become more solvent and doesn’t put all of the burden on retirees,” Hardy said.

Hardy says the president sent the memo because he wanted staff to feel informed about what might happen to their pension plans.

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