The stewards of Illinois’ teacher retirement fund are criticizing Gov. J.B. Pritzker’s proposal to pay less into the pension system than is suggested by actuaries, and mentioned the term “insolvency” in doing so.
In a statement, the entire board of the Teachers Retirement System of Illinois, which manages the retirement funds for all public teachers except those in Chicago, condemned Pritzker’s proposal to short the accounts by hundreds of millions of dollars in the coming fiscal year.
“The system is at a growing risk of insolvency in the event of an economic downturn,” it read. “This danger is the direct result of eight decades of state contributions that always have fallen far short of actuarially based funding. TRS long-term investment returns consistently exceed the system’s expectations; but investment income alone will not be enough to prevent insolvency.”
State Rep. Steve Reick, R-Woodstock, told lawmakers on the House Floor that they’re ignoring the problem and need to begin examining where state money is sent in lieu of properly funding pensions.
“This is the first time any of our pension systems have ever used that word,” he said, referring to the use of the term “insolvency” by TRS. “Where are the audits of outside vendors to show that the money that we’re giving them is actually being spent wisely? Before we raise one dime in taxes, we owe the people of Illinois the privilege of knowing how we spend their money.”
Some lawmakers applauded. No official action was taken. Illinois lawmakers discussed how to “fix” Illinois’ pension systems earlier this month but talks mainly centered on how to boost Tier II retirement benefits.
Intended to serve more than 417,000 members, TRS is $76 billion underfunded. It accounts for more than half of the state’s unfunded pension debt.