Dear colleagues,
We have received alarming news about the State University Retirement System. Please take a few meetings and read this message from Ken Anderson, past President of AAUP-IL and past editor of The Illinois Academe. The situation has been deemed serious enough that current AAUP-IL President Pan Papacosta has asked me to forward Ken's alert to all of you. I encourage you to share this newsletter with any others who may be interested.
~Lynne M. Meyer
Executive Director, AAUP-IL
An Early AAUP Alert
Members should know of a significant threat being posed to the fiduciary integrity of SURS (the State Universities Retirement System) by legislation included in HB3511. The bill probably will have passed the House by the time you read this. Because the impact of this bill that includes most state boards is so significant it may not be given its final form until the close of the session.
Our concern is with provisions relative to SURS but they also apply to all other state pension systems as well. The proposed legislation would terminate the current SURS Board as of June 30, with the Governor appointing a new Board, its chair, (currently elected by the Board) and the Executive Director. Such action would expose the Board to the possibility of significant political influence and endanger the ability to fulfill its fiduciary responsibilities.
The financial heath of SURS would be placed at risk under this proposal. The Board fended off an effort by former Governor Ryan to have SURS invest in a state program that now is worth only ten cents on the dollar. The Board refused on the grounds of fiduciary responsibility. But a new board would have no history, a chair and potentially a new Executive Director replacing Jim Hacking. If the Governor's bonding proposal passes, the new Board might have as much as $2B to invest immediately in addition to the regular flow of funds. Think of the temptation of turning over management of those funds to firms charging much higher fees than the very low management costs of SURS now. Or think of risky investments that might fail.
Since every state dollar going into funding SURS comes out of the higher education budget, any financial losses increase the flow of money away from institutions, students and programs.
It is hoped an amendment will be introduced to take the pension systems out of this bill and maintain the status quo. That amendment has not yet been introduced according to Jim Hacking as of Friday, April 4. If it is not we must be prepared to battle to protect the interests of those in the "traditional benefit plan" of SURS and all of higher education.
It may not be too early to let your concerns be know through contacts with legislators or the Governor. Do not use University resources--phones, stamps, stationary, etc.--to do so.
Representative Naomi Jakobsson
10th District
206 N. Randolph, Suite 120
Champaign, IL 61820
(217) 373-8679 FAX
(217)373-5000
Representative Chapin Rose
103rd District
1113 Lincoln Ave.
Charleston, IL 61920
(217) 348-7677 FAX
(217) 348-7673
Senator Richard Winkel
52nd District
1717 Philo Road, Suite 27
Urbana, IL 61802
(217) 782-6830
Governor Rob Blagojevich
207 State House
Springfield IL 62706
(217) 328-1202 FAX
(217) 382-0400
alternate address:
Thompson Center, Floor 16
100 W. Randolph
Chicago, IL 60601
(312) 814-2121
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