SURS changing interpretation of pension ‘money purchase’ provision

May 8, 2014

The State Universities Retirement System says it’s changed its interpretation of part of the state’s new pension law after a letter from House Speaker Michael Madigan.  It’s a move that should prevent many employees from losing part of their pension benefits if they don’t retire by June 30th.

An error in the wording of the new law would have cost many workers hundreds of dollars a month in benefits.  SURS Executive Director William Mabe tells the Champaign News-Gazette that wasn’t the intent of the law, and his organization will now follow the lead of other state retirement systems.

Dave Urbanek is a spokesman for the Teachers Retirement System.  He says the intent of the legislature was to protect members who would use the money purchase option in the future:

“Considering that they were close to retirement, and were making life-altering decisions, the General Assembly’s intent was to not hurt them as they’re so close to retirement.  So when we look at the language and the way it’s constructed in the law, we saw the year preceding the enactment of the bill would be 2014 and not 2013.”

SURS spokeswoman Beth Spencer says its executive committee will vote on that change in the ‘money purchase option’ Thursday and fully anticipates that it will be approved.