A new study gives thumbs down to one proposal for pension reform. The study says the so-called “universities” proposal takes away too much from public sector retirees. “Policymakers need to recognize that this plan represents a very deep cut to public pension benefits despite the consensus that state underfunding, not public-sector employees, is responsible for Illinois’ pension challenges,” said Stephen Herzenberg, an economist and executive director of the Keystone Research Center and co-author of the study.
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The study claims that the proposal relies mostly on reductions in cost-of-living increases for retirees. Herzenberg says the inflation protection under the “universities” plan would be better than only two other state pension plans where employees aren’t eligible for Social Security. “The longer they live into retirement, the harder it will be for them to make ends meet,” Herzenberg said. The plan is backed by several Illinois university presidents, and is one of the proposals being considered by the General Assembly’s conference committee.