Wednesday, February 26, 2014

SUAA Lawsuit Filed Against Senate Bill 1 (PA 98-0599)

The State Universities Annuitants Association (SUAA) has engaged the law firm of Maduff & Maduff, LLC in Chicago.  Aaron Maduff is the lead attorney, with SUAA's attorney John Carr providing much of the research.  Aaron Maduff was named in Chicago Magazine as one of the top 100 Attorneys in Illinois with employment law as his specialty.

As of this writing, there have been [four] lawsuits filed... SUAA will be the [fifth] lawsuit filed.  However, the SUAA lawsuit will be filed in Champaign County.  In addition, the plaintiffs chosen for the lawsuit are all from Champaign County.  The University of Illinois, Parkland Community College and the State Universities Retirement System are all located within a short distance of one another.  The fiscal impact on this community alone is monumental.  In addition, the plaintiffs are representative of all who are currently contributing to the State Universities Retirement System and those, of course, who are now beneficiaries.

Filing multiple lawsuits is advantageous to the participants in and beneficiaries of the State-funded pension systems.  SUAA believes that the State Universities Retirement System (SURS) has certain distinctions that sets this system apart from the others. SURS is the only system that has a Traditional Plan, Portable Plan, and a Self-Managed Plan to choose from.  It is also the only system that has the Money Purchase Formula which, with the implementation of SB 1 (PA 98-0599), will severally reduce its value.

The lawsuit will file complaints under the Pension Clause and the contracts clause in the Illinois Constitution.  Because SURS participants were compelled to make an irrevocable election in the years 1999 – 2001, a claim will be made as a violation under contract law.  Other complaints will also cite as violations:

·         The loss of Automatic Annual Increases (AAI or COLA) as agreed in negotiations with the State of Illinois;
·         The implementation of skipping AAI payments based on the age of the SURS employee at the time of retirement;
·         The salary cap on earnings in calculating pension benefits;
·         The raising of the retirement age.  For every year under age 45, the retirement age is raised 4 months, adding years of required service credit for younger workers;
·         The change in the effective rate of interest in SURS pension benefit calculations.  SURS is the only state funded retirement system with portable and self-managed plans in addition to defined benefit plan;
·         The potential of contract violations (i.e. Parkland Community College employees received an early retirement incentive through collective bargaining. Upholding SB 1 might affect collective bargaining agreements).  Additional note: contract negotiations are not to be changed;
·         The added potential of striking down the AAI is also a diminishment of benefits;
·         The grant percentages awarded to professors will not be included in pensionable income.

SUAA’s intent is to file the lawsuit by Friday, February 28.  Most likely there will be a press release following from SUAA along with other media reports. While we have focused on SURS concerns, most likely there will be an attempt to combine all pension lawsuits into one to be heard in Cook County.  We are hopeful that the SUAA lawsuit will be specific enough to be afforded its own resolve.

To contribute to SUAA Legal Fund Click Here.

Linda L. Brookhart, Executive Director
State Universities Annuitants Association
217 East Monroe Street
Springfield, Illinois 62701
217.523.4040 Office

1 comment:

  1. When the State of Illinois violates it's Constitution, they deserve to pay attorney's fees. Too bad we cannot sue each legislator who voted for the violations individually.