ISU expects more retirements than usual

2014-04-22T18:00:00Z ISU expects more retirements than usualLenore Sobota
April 22, 2014 6:00 pm  • 

NORMAL — Illinois State University is expecting a larger number of faculty and staff to retire this year amid questions about the impact of pension reforms.

Greg Alt, interim vice president of finance and planning, said because of pension reforms, the university expected retirements would be up 20 to 30 percent over the typical year's total of about 100.

“But the numbers are starting to come in higher,” Alt said Tuesday.

The story is similar elsewhere across the state.

The State Universities Retirement System mailed out twice the number of retirement applications in March as it did a year ago for all schools, according to Beth Spencer, SURS communications manager.

“We currently have approximately double the amount of applications on file for May and June and anticipate a significant number to still be submitted,” Spencer said in an email reply to questions.

One reason for the uptick is a change in the way pensions are calculated for eligible people who retire after July 1.

Those who select what's called the “money purchase option,” which is based on such factors as age, money contributed and the interest it earns, could see a monthly annuity “much lower than the historic rate,” Alt said.

Instead of the guaranteed 7.75 percent interest rate that SURS has used to calculate the annuity, the amount would be tied to U.S. Treasury rates — currently about 4.5 percent — plus 0.75 percent.

Alt gave the example of a 57-year-old employee retiring before July 1 receiving $3,287 a month while the same employee would receive $2,230 if they retire after July 1.

To lessen the impact of the change for those near retirement and avoid a rush to retirement, the pension reform measure included a provision that was supposed to lock in the old rate as of July 1 for those eligible to retire on that date, even if they retired later. But the actual language in the bill that was signed set the lock-in date as July 1, 2013, rather than this year.

SURS noticed the errors and told the law's sponsors months ago, Spencer said. Corrective legislation has been drafted and universities as well as SURS are working to get the date changed to what was intended, according to Alt and Spencer.

In typical years, ISU pays out $2 million to retirees for such things as unused vacation, Alt said. If retirements are up 30 percent, ISU would need to pay out about $600,000 more than usual.

However, the university is not overly concerned. Alt said, "Many of these people would be retiring in a few years anyway."

University spokesman Eric Jome said, “We see spikes and then we see troughs, and over time it averages out."

Jome noted that there were 164 retirements in fiscal year 2012 because of a change in formulas, but the following year, only 38 people retired.

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(8) Comments

  1. Cresent
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    Cresent - April 24, 2014 7:10 am
    I'm referencing ISU's Factbook (page 44) for numbers of faculty by college. FTE for tenure/tenure track: Fine Arts, 96; Education, 81.3; Business, 81. I only used the word "adjunct" because of previous comments. The term seems to be used commonly for NTT's. ISU hiring classifications, of course, refer to this job class as NTT. Also apparent from the Factbook is that NTT's tend to be part time and female, and, as we know, lower paid.
  2. thoughts a million
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    thoughts a million - April 23, 2014 6:54 pm
    Let's make sure we're using the same language here: ISU employs both full-time and part-time Non-Tenure Track faculty. In my mind, a full-time NTT is not an "adjunct;" to me, that indicates part-time status.
    So Crescent, in your comment above, are you including FT NTT faculty in your definition of "adjunct?"
  3. freezing transplant
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    freezing transplant - April 23, 2014 6:41 pm
    I'm not sure where your information comes from but the last sentence in your comment is patently wrong. There are a number of faculty who have careers outside of their teaching (in Business, for example) and this changes the faculty composition of certain areas. Education has one of the largest faculties on campus and their faculty get paid at a much higher rate than Fine Arts and the humanities (History, Language).
    The biggest problem with this situation is that some good, involved and engaged faculty are feeling forced to retire before they are ready. These people fulfilled their end of the bargain, the state didn't and the ISU administration doesn't seem to care.
  4. Cresent
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    Cresent - April 23, 2014 6:28 pm
    The percent of adjuncts varies widely from one College to another at ISU. Very few are used in some departments while others have over 50%. This could be changed, of course, with simple redistribution from the Provost's office. She may want to examine why a tuba faculty, for example, must be full time but the nursing program has so many adjuncts. Did you know there are more faculty in Fine Arts than in Business or Education?
  5. thoughts a million
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    thoughts a million - April 23, 2014 5:21 pm
    At lunch today with my wife, I asked her how many "part-time adjuncts" were in her department; she said zero out of 30 faculty members. I don't think ISU uses too many part-timers, but some of my friends teach part-time at IWU and HCC.
  6. wise 1
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    wise 1 - April 23, 2014 12:55 pm
    a lot that are working part time used to be full time they have retired to double dip
  7. Smartone
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    Smartone - April 22, 2014 11:00 pm
    Hmm it will be interesting to see who is teaching in all of these positions when these professors leave. As a parent of an upcoming graduate student, I can now understand why there was some discouragement to get an upper level degree here and not go out of state. The price will be higher, but so will the value of the education. Many years ago when I graduated from college, there were mostly fully time professors, now there are way to many part-time adjuncts. The value of the education was higher then too, and now I am afraid students are getting what they pay for, a part-time teaching staff and if they are already not short changed, they soon will be here in this state. The pension snowball effect I am afraid is just starting and there are greener pastures out of state that know how to manage money, which our state fails year over year at doing.
  8. blmillini
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    blmillini - April 22, 2014 9:05 pm
    the sky will fall

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