A study by the University of Illinois Institute of Government and Public Affairs provides some new ideas on what can be done about the state's soaring pension expenses.
Report co-author Jeffrey Brown said it's important to look for savings while at the same time maintaining a retirement package that's competitive.
“You cannot view pension reform as solely an exercise in cost-cutting. We really do need to think about the impact that this has on the ability of higher education to continue to be an economic engine for the state, and to continue to attract and retain the kind of talent that we have and that we need,” Brown said.
The report focuses on the State Universities Retirement System, though Brown said most proposals could be applied to Illinois' other pension funds as well.
“I view this as an exercise in showing that a good pension system can be designed that provides good retirement benefits for individuals and does so while saving the state a lot of money,” Brown said.
The study recommends universities and their employees both contribute more money, with those increases phased in over time. It also suggests offering combined 401(K) style and defined benefit plans, and it seeks to redo an interest rate formula that Brown said can inflate payouts.
Thanks to Illinois Public Radio