To: Deans, Directors, Department Heads
From: University Human Resources
Date: November 15, 2010
Re: SURS Pension Reform
You may have heard about changes to the State of Illinois Pension Code (Public Act 96-0889) that impact the State Universities Retirement System (SURS), effective January 1, 2011. This Public Act does NOT impact CURRENT SURS-eligible employees. It also does NOT impact employees hired and certified in a SURS-eligible position between now and December 31, 2010.
WHO IS IMPACTED?
Public Act 96-0889 modifies SURS benefits for NEW EMPLOYEES hired with an effective date on or after January 1, 2011. SURS interprets "new employees" as those certified as SURS-eligible.* Based on this interpretation, the following additional individuals may also be subject to the new provisions:
- Employees who are working in a non-SURS-eligible position prior to January 1, 2011, and who move to a SURS-eligible position effective on or after January 1, 2011.
- Certain visa holders who have not established residency status (met substantial presence) during 2010 and who may become eligible and certified as SURS-eligible effective on or after January 1, 2011.
WHAT IS CHANGING?
This Act modifies provisions for the SURS TRADITIONAL and PORTABLE Plans, including changes to Minimum Vesting, Normal Retirement Age, Earliest Retirement Age, Age Reduction, Final Rate of Earnings (FRE), FRE Limits, and more. A chart that summarizes these changes is available on the SURS website at http://www.surs.com/pdfs/tier2_chart.pdf.
It is important to understand that these CHANGES ARE SIGNIFICANT, and all employees hired (or newly SURS-eligible) effective on or after January 1, 2011 must carefully review the SURS plan options and make an active decision about plan choice. We ask that you strongly encourage your new employees and those newly SURS-eligible to attend Benefits/Retirement Orientation, as well as to thoroughly review the information that they receive from SURS, prior to making their SURS plan choice. Employees who do not make an active plan choice within six months will irrevocably default into the SURS Traditional Plan, which may or may not be their preference.
The SURS Self-Managed Plan (SMP) is UNCHANGED, so SMP participants are not impacted by the provisions of PA 96-0889, regardless of their date of first employment.
Many questions may be answered by reviewing the SURS chart at http://www.surs.com/pdfs/tier2_chart.pdf.
Contact SURS with additional questions about the pension code and changes at 800-275-7877 or 217-378-8800 in the Urbana-Champaign area.
Questions about an employee's specific situation may be directed to the UPB Benefits Services office on the campus where the employee is located: https://nessie.uihr.uillinois.edu/cf/index.cfm?Item_ID=713
All other questions may be directed to University Human Resources at email@example.com.
* SURS anticipates that a bill will be introduced during the Fall Veto Session that, if passed, will confirm this interpretation.