The board that oversees Illinois state universities’ employees’ pension system voted unanimously Thursday to impose an emergency rule to change the pension law so that faculty members won’t have to retire by June 30 or suffer big pension losses.
The emergency rule change is expected to take effect by Friday.
The board’s executive committee, meeting at 77 W. Wacker Drive in emergency session, approved a recommendation by William Mabe, executive director of the State Universities Retirement System, to fix an error that would have calculated an employee’s benefits as of last year instead of this year. If left alone, the interpretation — made by the retirement system’s own lawyers — would have led to a more significant reduction in retirement benefits than the Legislature intended when it passed the pension bill.
Even though the board left untouched the Legislature’s lowering of a previously guaranteed investment earnings rate, from 7.75 percent a year to a market rate that now stands at 4.5 percent, University of Illinois Board of Trustees Chairman Chris Kennedy, who attended the meeting, said the fix would avert a brain drain of faculty who would otherwise feel forced to take their retirement benefits in full and leave.