Pension overhaul sends hundreds into early retirement
CARBONDALE, IL -
A $100-billion dollar shortfall forced Illinois lawmakers to overhaul the state's retirement benefits last December, but the overhaul is forcing professors at state universities to line up for early retirement due to a glitch that could cost educators a chunk of their pensions.
"Right now we've had about 148 indicate that they will be retiring," said SIU spokeswoman Rae Goldsmith. "We think there will be more and we think it will be more than 200."
Beginning June 1st the state of Illinois will use a new formula to calculate pension benefits which could cost retiree's thousands in future pension benefit increases.
Southern Illinois University has vowed not to cut classes, but school spokeswoman Rae Goldsmith admits the losses will be felt.
"I think it will be a challenge especially on the faculty side because there is a loss of institutional knowledge," said Goldsmith. "It's difficult to hire at this point people for fall so we will likely end up hiring on a short term basis."
Already faced with potentially trimming millions from their $613-million dollar budget SIU will not be able to help soften the blow to teacher pensions.
"We don't really have the resources to address this on a large scale," said Goldsmith. "We may not fill every position, but our goal is not to use this as an opportunity to eliminate positions our goal is just to make sure that as we go forward to fill positions that we're doing it strategically with the long term view in mind."
The constitutionality of the law is being challenged in court, but unless a stay is granted by the courts it will go into effect on June 1st, 2014.
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