SHOREWOOD — Errors in pension plan calculations can be fixed legally thanks to a new bill signed into law by Gov. Pat Quinn this week.
Prior to the bill’s introduction there was no legal recourse for correcting mistaken pension benefit calculations. The new law will allow for simpler and more efficient rectification of any problems.
State Sen. Jennifer Bertino-Tarrant, D-Shorewood, noticed the issue last year and set out to make the legislative changes. She said this is a way to address specific errors, not a major system overhaul.
“This isn’t a ‘save the pension system’ bill,” the senator said. “It’s just a law that will give individuals the power to get their money back if they deserve it, or for the state to correct errors it has made. This is an individual-level fix.”
The law allows the General Assembly Retirement, State Employee Retirement and Judges Retirement systems to legally make changes and recalculate errant pension benefits if it’s determined the original numbers were off.
Bertino-Tarrant said mistakes rarely are made.
“I can only point you to about two specific cases where miscalculations were made and people were basically out of luck because of the way the previous law was written,” she said. “It was something that was brought to our attention as necessary and appropriate legislation to support, but that doesn’t mean these problems are everywhere.”
This legislation was deemed necessary because in January an Illinois Appellate court decision was handed down stating the pension systems did not have the statutory power to adjust a person’s payment once it was set.
The teachers and public university employees pension fund systems already enjoy legislation enabling them to correct errors.
Joe Luppino-Esposito is editor and counsel at State Budget Solutions, a budget research and analysis organization that aims a large amount of focus on Illinois’ pension crisis. He said while small moves like this aren’t solutions to the larger pension issues troubling the state, they certainly don’t hurt anything.
“This seems like a common-sense way to make it legal to fix obvious errors,” Luppino-Esposito said. “There doesn’t seem to be a lot to it except just allowing wrongs to be righted and there’s not much to criticize there.”
The new law changes the language of existing legislation to enable a process where the situation can be set right if errors were found and correct monies determined. If a pension beneficiary is found to have been shorted, he or she may receive a lump sum making up the difference. Alternately, if it’s determined that too much money was paid out, the beneficiary would be asked to return a lump sum to the state.
The legislation operates with the understanding that the mistake is found within a three-year window.
“Mistakes get made sometimes,” Bertino-Tarrant said. “We’re all human. Now those mistakes can be quickly and efficiently and legally corrected with a lot less hassle than before.”