When Gov. Pat Quinn’s office issued an administrative order last week requiring non-union state workers to take 24 furlough days this fiscal year, the declaration said the resulting pay reduction would not affect pensions. On Tuesday, the administration acknowledged that the additional furlough days will affect pensions and that it is working to alleviate the impact.
When Gov. Pat Quinn’s office issued an administrative order last week requiring non-union state workers to take 24 furlough days this fiscal year, the declaration said the resulting pay reduction would not affect pensions.
On Tuesday, the administration acknowledged that the additional furlough days will affect pensions and that it is working to alleviate the impact.
“Our attorneys and the pension systems are working together to address this,” Kelly Kraft, spokeswoman for Quinn’s budget office, said in a tersely worded e-mail response to questions.
The State Employees Retirement System did not return calls.
Quinn’s administrative order requires some 2,700 non-union state workers under his control to take 24 unpaid days off this year, which is twice what was required last year. The effect of the furlough days is a 9.6 percent reduction in salary for those workers. Quinn said it would save the state about $18 million.
The order, issued over the signature of budget director David Vaught, contained this line: “The time off from work required here, and resulting reduction in compensation, is not considered a change in salary and shall not impact pension or other benefits provided to those employees.” Kraft agreed Tuesday that is not the case.
“The administrative order does not supersede statute,” Kraft wrote.
Furlough days have been around in state government enough that SERS devoted part of its website (state.il.us/srs) to frequently asked questions about furloughs and pensions. Question number one deals with how furlough days will affect someone “a few years” from retirement.
“If you are under the regular retirement formula, your pension will be affected,” the site says. “Your pension is determined by your average final compensation, which is the 48 highest consecutive months within the last 120 months of service.”
The site also says it is impossible to determine the impact furlough days will have on an individual pension benefits.
Kraft said the governor wants to find some mechanism where furloughs will not affect pensions, including legislation if necessary.
Springfield Republican state Sen. Larry Bomke and Rep. Raymond Poe said they will pursue legislation during the fall veto session to remedy the situation if some other solution can’t be developed before then.
“I’ll probably work with AFSCME to come up with language to protect all employees,” Bomke said. “I’m hopeful the governor will come up with something that will encourage employees to (take furloughs) and not affect their pensions.”
Bomke, Poe and Rep. Rich Brauer, R-Petersburg, collaborated on a bill this spring that allows furloughed employees to buy the pension credits they otherwise would have lost. Quinn recently signed the bill into law.
However, that bill covered only 12 furlough days a year, while Quinn is now demanding 24 of non-union workers. Plus, the employee has to pay both the employer and employee contribution, which the SERS website says is 9.44 percent.
Poe and Bomke said they only recently learned that SERS is also charging employees interest on the amount, 8.5 percent calculated from the time they joined the system.
“That could be a lot of money,” Bomke said.
Poe said he never intended for workers to have to pay interest when he drafted the bill and will work to have that provision changed.
Doug Finke can be reached at 217-788-1527.