Former University of Illinois athletic director’s pension to climb past $500K a year
Six years into retirement, Ron Guenther’s annual pension is more than $470,000 and is set to rise even higher, thanks to 3 percent yearly increases.
A retired athletic director from the University of Illinois, Urbana-Champaign is set to see his pension payments exceed $500,000 annually.
The findings are the result of an investigation by Jay Rosenstein, a documentary filmmaker and University of Illinois media and cinema studies professor.
Ron Guenther retired from his position as athletic director in 2011, but thanks to his high salary, 3 percent, automatic cost of living adjustments, or COLAs, credit for unused sick time, and a bonus and raises within his last four years of working, Guenther is pulling in $473,094 from the State Universities Retirement System, or SURS, as of 2017.
Guenther received several generous raises over the 19 years he served as the University of Illinois’ athletic director. From 1992 to 2005, his annual salary of $120,000 more than tripled to $410,000 a year, according to the Chicago Tribune.
In 2006, Guenther received a $90,000 raise, his biggest one yet. And while some were taken aback by Guenther’s growing salary, it failed to provoke real ire due to the fact that the athletic director’s pay was funded by University of Illinois athletics, which does not use taxpayer dollars for employee salaries. By 2011, the year of his retirement, Guenther’s previous four years of salary averaged more than $600,000.
But taxpayers are on the hook for his pension.
And thanks to SURS’s generations pension perks, and the fact that Guenther was eligible for 72 percent of salary at retirement, Guenther has already made back all of his employee contributions. SURS enrollees are required to contribute 8 percent of salary toward SURS to fund pensions. Rosenstein says that by retirement, Guenther had contributed $614,647, including interest.
And Guenther isn’t the only retired athletic department employee collecting taxpayer-funded pension benefits.
Retired coaches and athletic employees from the University of Illinois, Urbana-Champaign are costing Illinois taxpayers more than $2.6 million annually in pensions, which is sure to rise thanks to annual COLAs, according to Rosenstein.
The pensions of these athletic department employees are only part of a larger problem, which is fueled by the bloat in both the number and compensation levels of administrators in Illinois’ higher education system. The soaring costs of administrative compensation and pensions help drive up tuition costs for Illinois students.
With such large payouts, combined with unrealistic perks such as automatic, 3 percent COLAs, it’s little wonder that as of June 2016, SURS had only 43 cents of every dollar needed to pay future benefits. These costs are also a key contributor to rising tuition costs, as now half of state funding for Illinois higher education goes toward employee retirement costs.
Illinois taxpayers and students shouldn’t be forced to subsidize failing pension funds.
Thankfully, there’s already another option for state university employees. For nearly 20 years, SURS has been operating a 401(k)-style retirement plan in addition to its pension plan. More than 20,000 university workers have opted out of the traditional SURS pension plan in favor of the 401(k)-style plan, including 15 to 20 percent of new university workers over the past several years. The 401(k) option gives workers portability, flexibility and individual control – and more retirement security than IOUs from the state of Illinois.
To begin an end to SURS’s pension crisis, all new hires should be enrolled in its 401(k)-style plan.