Tuesday, August 31, 2010

As pension costs rise, public colleges pay the price

The pension pressure is already being felt at the three-campus University of Illinois system, which will start discussions in the fall over how to keep its retirement benefits competitive. The system will consider starting its own defined-contribution plan to make up for the reduction in benefits, officials say.

Richard D. Ringeisen, chancellor of the Springfield campus, says that with efforts like the new supplemental plan, "we're going to be fine" recruiting faculty and staff members.

"We think the state's financial problems will preclude it from putting together attractive benefit packages," Mr. Ringeisen says. "We're looking at ways we can help ourselves."

But he also acknowledged that in a state with the budget problems of Illinois—the state's $13-billion budget deficit next year is estimated to be half of the total budget—preserving the level of worker compensation while meeting every other budget problem is getting harder. When asked if his campus would be able to handle higher retirement costs, he laughed.

"The money has to come from somewhere, doesn't it?" he says. "We have to have great faculty. There is no university without great faculty."

Ringeisen's comments were featured in a August 29, 2010, article in The Chronicle of Higher Education.

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