State Universities Annuitants Association
MINI BRIEFING
Wednesday, March 04, 2009
Monday Announcements
Senator Bill Brady (R – 44,
Bloomington) is the first official candidate for the Illinois Gubernatorial 2010
race. This will be his second attempt
(2006). Senator Brady is known to be a conservative;
he does not agree with the Democrat’s plan to raise taxes and fees; instead he
wants to target Medicaid and the State Pensions. Senator Brady believes he can balance the
State Budget by cutting spending across the board 4 to 15%.
Senator Brady’s Committee
assignments are: Insurance
(Minority Spokesperson); Senate Committee of the Whole; Pensions & Investments (Minority
Spokesperson); Revenue; Revenue Subcommittee Special Issues
(Sub-Minority Spokesperson). These
committees are in bold because his decisions can affect the members of SURS and
the SUAA membership.
In addition, Senator Brady has sponsored these bills: SB303
Pension Defined Contributions Plan is scheduled to be called in the Pension and
Investments Committee on Thursday, March 5 at 12:30 p.m. The bill amends the
Illinois Pension Code. Requires the General Assembly
Retirement System, the State Employees' Retirement System of Illinois, the
State Universities Retirement System, the Teachers' Retirement System of the
State of Illinois, and the Judges Retirement System of Illinois to allow
employees to elect to participate in a self-managed program of retirement
benefits instead of the program of retirement benefits currently offered.
Provides that a self-managed plan shall authorize a
participating employee to accumulate assets for retirement through a
combination of employer and employee contributions that may be invested at the
employee's direction in mutual funds, collective investment funds, or other
investment products and used to purchase annuity contracts. Provides that, to the extent that the changes made by the
amendatory Act are determined to be a new benefit increase, the changes are
exempt from the 5-year expiration provision. Effective
immediately.
SB304
which is another Pension Defined Contributions Plan but is not being called at
this time. The main difference
between 303 and 304 is newly eligible employees are automatically enrolled in a self-managed plan.
Disability benefit disappears.
SB 1454 is scheduled to be heard in
the Executive Committee on Thursday also.
This bill is in regards to Pension Ethics.
Another announcement came from State Treasurer Giannoulias who opened an
exploratory bid for his run for the junior Senate seat in Washington DC.
SB1734, the bill to consolidate the
State-Funded Pension Investments initiated by Treasurer Giannoulias,
sponsored by Senator Jeffrey Schoenberg, is still being referred to
Assignments.
The Commission on Government Forecasting and Accountability requested proposals
from outside independent consultants to study the Treasurer’s proposed
investment merger (Illinois Public Employees Retirement System – ILPERS) to
identify areas of savings and/or additional costs. Taken verbatim from the
proposal: Areas of review shall include
various investment expenses associated with the consolidation, such as
investment management fees, legal fees, investment consulting fees. The consultant
shall also include an analysis of expected transition costs as assets from the
three state pension investment entities are merged into ILPERS. To the extent
possible, the consultant shall project aggregate costs/savings in each fiscal
year during which transition costs and other costs are expected to be incurred
as the three state pension investment entities divest from long-term
contractual arrangements in areas such as real estate, private equity, and
other alternative investment categories. Additionally, the consultant shall
provide a cursory review of other public employee pension system consolidations
in the United States to determine whether such consolidations achieved
significant savings in the area of investment expenses similar to what the
Treasurer’s analysis claims that the formation of an ILPERS entity would
achieve. As part of this effort, the successful bidder shall also include a
review of investment expenses associated with existing public pension funds
with an asset base similar to a proposed ILPERS ting fees, and other
functions impacted by the proposed asset consolidation.
The Independent Outside Consultant was to have been
chosen this past Thursday.
Senator Schoenberg and Representative Richard Myers are the co-chairmen of
COGFA.
A related item is Senate Resolution 54
sponsored by Senators Michael Frerichs, Larry Bomke and Kyle McCarter.
Synopsis As Introduced
Instructs the Commission on Government Forecasting and
Accountability to study the economic impact on central Illinois of the number
of jobs that would be eliminated due to the consolidation of investment
authority in the State Universities Retirement System and the Teachers'
Retirement System of State of Illinois.
SR54 was assigned to the Pensions
and Investments Committee and is scheduled to be heard on Thursday.
SB1638 was assigned to Revenue. It is the College Insurance Program Senate
bill. It is being sponsored by Senator
Donnie Trotter. The bill will be heard
on Thursday. Fact Sheets will be
provided on SUAA’s website by the end of the week.
HB3652 is the companion bill to
SB1638 and is being sponsored by Representative Barbara Flynn Currie. This legislation has been assigned to the
Personnel & Pensions Committee. It
has not been called as yet.
There is a difference in the synopses.
The effective dates are not alike.
At this time calculations are being worked to decide which dates will be
the most beneficial to the Program and the participants.
Senate President John Cullerton appointed a new committee called Committee on Deficit Reduction. The following Senators are members of this
committee:
Democrats – Co-Chairperson is Donne E. Trotter; Member John M. Sullivan; Iris
Y. Martinez; Edward D. Maloney; Heather Steans.
Republicans – Co-Chairperson is matt Murphy; Pamela J. Althoff; Randall
M. Hultgren; Carole Pankau; Dave Syverson.
Hearings began at 9:00 a.m. this morning.
(The March 3rd hearing was cancelled.) The subject matter for today will
cover aspects of the estimated budget deficit and revenue shortfall as it
relates to education funding. March 10th
is the next hearing. Its charge is to
cover HEALTHCARE AND HUMAN SERVICES BUDGET DEFICIT AND REVENUE SHORTFALL.
Written testimony may be submitted by the public answering: What areas of the
state budget are you interested in protecting and why are those areas
important? What revenue enhancements would you recommend be implemented to
support those areas?
Submit questions to Senator Donne E. Trotter.
Tuesday
Announcements
Here they are again folks – The Commercial Club of
Chicago.
March 3, 2009 (WLS) -- A new study says
the size of the Illinois budget deficit has nearly doubled in two years.
The budget gap for this year is $8.1 billion, according to the Commercial
Club of Chicago.
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The group put the deficit at $4.3 billion two years ago. The study suggests
cutting pension and Medicaid costs and reducing spending to decrease the
deficit.
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Comptroller Dan Hynes announced that he is supportive of changing “the state’s
short term borrowing laws in order to ensure access to enhanced federal funding
from the stimulus package . . .” SB324 would allow state officials to
temporarily borrow a maximum of $1.5 billion that would be paid back with
federal stimulus and Medicaid funds. The
money is also needed to meet the new federal prompt payment guidelines.
More to come . . .
