Employee retirement severance to relieve state pension debt    

[AUG. 17, 2004]  SPRINGFIELD -- The State Employees' Retirement System began taking applications Monday for the state's severance plan, which will be offered to no more than 3,000 eligible non-frontline employees working in agencies under the governor's control, the retirement system and participating constitutional offices.

Gov. Blagojevich included this initiative in the state's introduced fiscal 2005 budget last February as a means to continue making state government more efficient, as well as reduce both the head count below an already 30-year low and the fiscal burden placed on the state and the retirement system. The plan is estimated to save the state $81 million annually and will reduce the state's overwhelming pension debt, which remained unfunded for more than 30 years and added up to more than $35 billion when the governor took office. The governor will refill only a very limited number of these positions once they are vacated.

"We believe that we can continue to make government smaller, more efficient and accountable, while not compromising the state's ability to deliver quality services to its citizens," said Gov. Blagojevich. "This will not only reduce a significant fiscal burden on our state, but will help free up dollars for K-12 education and critical health care services for uninsured families, children and seniors who need prescription drug coverage."

Participants of the severance plan will receive, in exchange for their accrued retirement benefits, a payment equal to double the value of all pension contributions made to the system by the employee, along with 6.25 percent interest. For example, an employee who has contributed $3,000 to the pension system and earned $1,000 in interest will receive a cash payment of $8,000. Participation in the retirement plan will not affect accrued health insurance benefits but will terminate any pension benefits.

The retirement system will take applications on a first-come, first-served basis through Sept. 30, 2004. No applications will be taken after this deadline.

Over the last several days the retirement system mailed materials to eligible employees, detailing relevant information regarding their participation in the plan. Information regarding the severance plan and cash payments associated with participation can be found by going to http://www.state.il.us/srs/SERS/home_sers.htm.  Job titles eligible for participation can also be found at http://www.state.il.us/srs/SERS/WNalpha_sers.htm.

Employees who do not participate in the State Employees' Retirement System are not eligible for this plan, nor are employees of nonparticipating judicial, legislative or constitutional offices.

[News release from the governor's office]