Approved Minutes For Meeting On December 21, 2011

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Date: December 21, 2011

Program:

1. The meeting was called to order at 1:07 p.m. by the Vice Chair, Lori Stettler. Visitors and guests were welcomed and introduced.

2. Roll Call

Members Present: Tuesday Ashner, Natalie Branca, Steve Buhman, Pat Eckert, Jon Geiger, Kathy Jones, Lori Stettler, Sue Tin, Valerie Brooks Wallin, Gloria Yuncker.

Members Absent: Janet Douglas, JP Dunn, Alfred Jackson, Meredith Thomas.

Proxies: Jon Geiger for Charlotte Sarao.

Visitors and Guests: Jake Baggott, Tracy Bennett, Carl Ervin, John Massie.

3. Minutes

The minutes of the meeting on November 16, 2011, were approved as presented.

4. Adoption of Meeting Agenda: The agenda was amended to add approval of a committee assignment under Committee on Committees; to remove item 5.4b, the University Joint Benefits Committee report (rescheduled for January); and to remove items 5.5c, d and e/f under Standing Committees, as they all have no report. P. Eckert moved to adopt the agenda as amended; seconded by V. Wallin. Motion carried.

5. Reports

5.1 Chair 
L. Stettler (for JP Dunn) reported on the December 12 constituency heads meeting: i) there was discussion on the 1% salary increase effective January 1. The increase will appear on the February 1 checks for those who are paid monthly; ii) the graduation committee that was formed has recommended that there be two graduation ceremonies in the fall and three in the spring; the August ceremony will be eliminated. Colleges will be allowed to have their own private pinning ceremonies; iii) the Chancellor has endorsed bringing back the excellence awards. A reception will be held instead of a dinner, and there will be a monetary component; iv) the strategic planning process is moving forward, with campus discussions to begin in the spring; v) Executive Director of the IBHE George Reed will be on campus February 3 to discuss performance funding. He will present at 2pm at a location yet to be determined; vi) customer service training begins January 5 and will be offered face to face and online.

5.2 Board of Trustees 
L. Stettler (for JP Dunn) reported on the December 8 meeting: i) a report was given on instructional quality, which is available online; ii) there was discussion on the new roof for the Communications Building, which will be paid for from the FEMA reimbursement insurance received as a result of the May 8 storm; iii) $700,000 has been pledged to update Abe Martin Field and includes lighting and seating; iv) a presentation was given on the Housing master plan; v) it was reported that the University has now received all of its FY11 funds. Additionally, $33 million in MAP funding was approved; vi) there was some discussion by the President on conceal carry and the ramifications of that legislation; vii) the Chancellor reported: a) the University purchased five triple x internet domains in order to protect its image and reputation; b) a ribbon cutting was held for the Campus Lake path; and c) the University purchased five new Cessna aircrafts. L. Stettler indicated that there were no public comments and that all items on the agenda--except for Item Y, which was withdrawn--were approved on an omnibus motion.

5.3 Human Resources (HR) 
T. Bennett reported that HR is working on the salary increase lists in order to make those increases available February 1. Also, the University will have its Civil Service System audit at the end of January. Appointments will be scheduled for some on-sight reviews of both A/P and civil service positions. A/P who supervise civil service could be asked to come in and discuss that as well.P. Eckert reported she received six phone calls from different academic units across campus with respect to search waivers and filling interim positions. She called T. Bennett, who followed up with Phyllis Khaaliq in the University Affirmative Action Office. P. Khaaliq indicated that in most cases, there is a requirement for at least an internal search for an interim position. There are rare occasions when a search waiver is granted, but those are currently far and few between. There is not a hold on approving search waivers for all positions. Her office reviews each request carefully in order to insure the University is meeting all the requirements under the law. P. Eckert believes that with retirements and other things going on, people are attempting to get a handle on things. She indicated she had one other employee who is changing how her/his absence request is done. After speaking with T. Bennett, she was able to refer that person. P. Eckert thanked T. Bennett for all of her help.T. Ashner reported she received a call as well, specifically regarding the vacancy in the Public Policy Institute as a result of Chris Rich's retirement. T. Ashner did not remember seeing the position advertised. P. Eckert responded that she did remember seeing the advertisement. T. Bennett commented that, in general, search waivers are going to be the exception. In the past, they have been used more than they should have been; so, there will be many more positions being searched in some manner, whether regional, local, internal, etc. This is not to say there will not be any search waivers, but she believes getting one will be more difficult. L. Stettler asked Council members if they would like Linda McCabe-Smith (Associate Chancellor for Institutional Diversity) to attend a Council meeting to answer some of these questions directly. T. Ashner believes it would be a good idea. It is difficult for A/P to move around, and she would like to know that positions are being advertised so that all constituents are [aware of the vacancies] and are able to apply if they so choose.

5.4 Representatives to University Committees

5.4a Advisory Committee, Department of Public Safety - John Massie 
J. Massie presented and discussed his report (included as appendix 1; to the minutes).

5.4b SURS Members Advisory - Jake Baggott 
J. Baggott reported on the December 13 meeting, noting the meeting was rescheduled from its usual meeting time in October because of other conflicting events: The committee received an update on what is happening within the System. There are some new staff, including Jeff Houch, in the new position of legislative liaison for the System. He is very in tune with what is occurring within the state legislature and has been tracking pension information for some time. J. Houch spoke to Senate Bill 512, noting it will not go anywhere this fall and possibly not in the spring; however, it is expected that some legislation will get some support. It is possible that both the employer and employee contributions will increase. SB512 actually includes a provision that would require a 15% employee contribution in order to continue in the Tier I benefit; or, employees can opt for Tier II, which is a little less of a contribution. There is an amendment approved to that draft bill which calls for a recalculation of that contribution. This would mean that within three years, the contribution could go up to as much as 17% to retain Tier I benefits. Obviously, it is designed to discourage people from staying in Tier I. No one has come up with any alternatives to these two options. J. Geiger asked if the legislators have acknowledged their responsibility in this whole pension deficit issue. J. Baggott responded they have not, noting that anyone who has served in an elected leadership position at the state level--whether it was this year or 30 years ago is to blame. The state has just not lived up to its responsibilities, and there is no immediate change that will solve the problem. The state, remarkably, is currently paying its required monthly contributions.P. Eckert commented that even if employees do contribute more, there is no guarantee that the state will meet its obligation. J. Baggott added that the question was asked as to whether employees would get more benefits for paying more, and the answer to that is no. The state has an obligation to pay state employees their retirement benefits. Currently, it is largely an investment-funded activity. If the state does not sufficiently put in the money it needs to, then it will become more of a system that basically processes state appropriations to pay retirement annuities. Statutorily, the state does not have to have an investment pool from which to pay; but, they do have an obligation to pay the annuities that people have earned. Taxpayers, should be very concerned about that because it will cost a lot more in the long run than it would if the state would live up to its responsibilities. Unfortunately, there is not a lot of support for public pensions, and legislators are looking for any appearance of fraud.T. Ashner asked what organization is [lobbying] on behalf of SURS. J. Baggott responded that the State Universities Annuitants Association (SUAA) has a strong lobby presence and tracks issues very carefully. Those who are annuitants tend to vote, so they do have some influence. He suggested employees should consider joining. There is a local chapter, and employees do not have to be retired to join. J. Baggott added that the System is also a very good advocate for making its own case, and they have been good stewards of the investments they have made. There is not a wide-spread campaign in order to tell SURS's story. It takes money to do that, and for SUAA to take that on, they would need support from members. Unions also have much at stake, so they will advocate as well if there is a serious threat. The most active group against the pension is the group out of Chicago. They have targeted the pension system as a major problem--and it is a major problem for the state; but, it all goes back to the lack of state funding.J. Baggott reported that with the changes that are taking place, i.e., the new actuarial tables that take effect July 1, retirements are up considerably. Retirement applications are expected to be 35-40% higher than they were last year. The System typically receives 2800-3000 in any given year. The number is much higher than that now. There is an expectation that there will be a rush at the end of the fiscal year. J. Baggott reported that there are 18,000 people currently eligible to retire in the state; 26,000 people will be eligible with the next year, and another 6600 are not actively contributing to the retirement system; however, they have worked at a university and may have left, but did not retire, and now are eligible to retire. S. Buhman asked if the hiring freeze will be affected, given the likelihood there will be a lot of retirements. J. Baggott responded that there is a lot of pressure regarding that issue because there have been so many vacancies during the course of the hiring freeze. His last count showed 280 fewer FTEs than there were at the start of the hiring freeze, and that number is higher now. He acknowledged that there are places on campus that cannot afford to go much lower in staff, but also recognizes that University is still struggling with a budget deficit.J. Baggott also reported: i) those people newly hired are now given a choice of either the Tier II retirement benefit, the portable plan or the self-managed plan. Approximately 28% have chosen the portable plan and 20% the self-managed plan. Those numbers are up some, but the majority still choose, by default, Tier II; ii) there is a new division within SURS called the Outreach Division, and they have hired a person named Pam Butler, who has been ramping up their on campus presence in terms of education and workshops. Her plan is to be on every campus in Illinois within the next year. They are looking at webinars in order to reach out to more people; iii) for the month of October 2011, investments are up 7.18%, although the year to date figures show a 4.1% deficit. This is a result of the tumble the markets took in September. As of the end of November, those numbers were down to about 5.5% from 7.18%. At this time, SURS is being funded at almost 42%. J. Baggott commented that he has served on the Advisory Committee for almost eight years, and at one point funding was in the 80% ratio based on the investments, markets and funding levels. That ratio has taken a huge hit for a variety of reasons. Over the long haul, SURS has consistently outperformed the markets in their investment strategies, which is a reflection of their good stewardship.J. Geiger asked if there is anything the Council can do to help in getting the word out to the general public [that state employees are not at fault for the state of the pension system]. J. Baggott responded that anything employees can do even if it is just communicating with family and friends outside the institution to try and convince the general public that employees are not to blame. People can write letters to the editor. [This information] needs to stay out in front of the legislators. He commented that it is surprising the number of legislators who do not understand the source of the problem and the legacy. J. Baggott endorsed SUAA and encouraged people to join, noting the dues are fairly inexpensive. P. Eckert suggested something that might be helpful is a fact sheet for individual members to have that would provide some of the information to countermeasure what the media is doing. She does not believe people understand the two pieces of federal legislation which do not allow [state employees] to receive survivor benefits from a spouse who has paid into Social Security, and does not allow the state employee to receive the full amount of any Social Security for which they might be eligible (as a result of the Windfall Act). J. Baggott indicated that the University Joint Benefits Committee had developed some fact sheets that are likely still current. [see appendix 2]. Also, SURS has several fact sheets, particularly on the Social Security issue. This information is on their website as well.

5.4c Chancellor’s Planning and Budget Advisory - Patty Cosgrove 
P. Cosgrove submitted her written report (included as appendix 3).

5.5 Standing Committees

5.5a Executive Committee 
L. Stettler reported that she has covered everything that was discussed at the meeting, except that the Chancellor will meet with the Council on January 18. JP Dunn is collecting questions, so Council members need to get those to him in enough time that he can compile them into topics and send them to the Chancellor.

5.5b Committee on Committees 
J. Geiger presented for approval the nomination of Lorrie Lefler, Continuing Education, to fill the vacancy on the University Joint Benefits Committee as a result of the resignation of Willie Ehling.Nomination was approved.

6. Old Business - None.

7. New Business - None.

8. Announcements - None.

9. Adjournment

Meeting adjourned at 2:12 PM.