EIU Annuitants Association

Oct. 13, 2011 Chapter Meeting Minutes

Presentation by William Mabe, Executive Director, SURS

Executive Director Mabe began by distributing a handout to accompany the presentation which would follow, in which he made the following points:

• A. SURS assets are valued at $14.3.billion as of 6/30/11. The "trendline" of SURS' funding ratio (assets compared to liabilities) has begun an "uptick."
• B. The state's monthly appropriation for fiscal year 2012 is $81.7 million. In September, however, SURS received only about $40 million of the appropriated amount.
• C. The number of SURS annuitants has doubled over the last ten years, as has the amount paid out in monthly benefits. After the next two years, however, the number of annual retirements of SURS-eligible employees is expected to "flatten out to about 2,000 retirements per year."
• D. In FY 2012, the September benefits payout was $150 million.
• E. Announced changes in health care providers, prospective increases in health care premiums, and pending changes in the Money Purchase Formula stimulated a substantial increase in the number of "walk-in" visits to SURS facilities in June 2011by both annuitants and current employees. (The change in the Money Purchase Formula in 2012 will not affect current annuitants or Self-Managed Plan members.)
• F. In his communications with the public in the next three to four months, Executive Director Mabe will stress the role the public universities play in creating the "smart workforce" that will be essential if Illinois wishes to "compete [successfully] in the future." Creation of this "smart workforce" will require substantial investments in the state's educational institutions – and "competitive benefit packages" for our educators, buttressed by an adequately funded pension system. Recent studies indicate that 80% of Illinois educators' benefits payments "stay in Illinois communities." Our schools "create value" by improving the state's workforce and "put[ting] back money into our communities."
• G. Turning to the efforts of various "working groups" seeking to implement "pension reform" in Illinois, Executive Director Mabe noted that these efforts are "focused on current employees." (E.g., the Civic Committee of the Commercial Cub of Chicago favors funneling current employees into a "voluntarily" chosen "defined contribution" plan.) Mr. Mabe encouraged his audience to review Senate Bill 512 and to be vigilant during the coming Legislative Veto Session. SB512's provisions for "Current and Future Participant Benefit Reform" are delineated on pp. 8-10 of Mr. Mabe's handout.)
• H. In response to a query which followed his formal presentation, Mr. Mabe advised his audience to "continue your phone calls and letters to legislators. Use your clout." Responding to a question regarding potential threats to annuitants' annual COLA increases, Mr. Mabe noted that SURS annuitants' COLA provision (3% compounded annually) is "an attractive part of our benefits package" and is protected from "constitutional impairments."