42 Comments - Brendan - Thursday, Oct 11, 12 @ 3:15 pm: Richard Ingram’s fiduciary duty is to ensure the continuation and solvency of the ITRS. By recommending reforms to how it dispenses its benefits, so as to guarantee adequate funding of the system and prevent future insolvency he is doing precisely that. Just because the unions don’t like his recommendations, does not mean their complaints are valid. - Mike Huntoon - Thursday, Oct 11, 12 @ 3:16 pm: Is the only solution the IFT finds acceptable the status quo? I ask that because it seems obvious to me that the status quo is the one thing the state can’t afford moving forward. - Brendan - Thursday, Oct 11, 12 @ 3:17 pm: If the union wants to dictate how its retirees retirement funds are managed and how their benefits are distributed, then let the union take on the full responsibility for funding and running them. That’s what the Teamsters do. - Crime Fighter - Thursday, Oct 11, 12 @ 3:33 pm: Ingram sounds like a wanna-be civic federation “titan”. - Irish - Thursday, Oct 11, 12 @ 3:34 pm: How is Mr. Ingram chosen? Evidently not by the IFT or they could fire him outright. So he must be an appointee? Maybe the ISFA is in his future? - Anonymous - Thursday, Oct 11, 12 @ 3:36 pm: “That’s what the Teamsters do.” Is taht true? Teamsters represent a number of State of IL workers. In the State retirement systems. - phocion - Thursday, Oct 11, 12 @ 3:37 pm: So, the IFT wants to protect bad teachers from firing, but they have no problem calling for the firing of someone whose views they disagree with. Interesting… - sue - Thursday, Oct 11, 12 @ 3:39 pm: Richard Ingrahm should be congratulated, not villified- He has stated the obvious- TRS will not be able to honor its commitments absent some restructuring of its obligations- Illinois could raise its taxes to 10 percent and it wouldn’t dent the unfunded liability which has been allowed to accrue- If the IFT wants to take the position that everything can go on as is- God Bless- in 10 to 15 years the System will stop being able to pay its benefits- Shame on the IFT- this is the same mentality that is bankrupting the CPS- At least the folks at the IEA seem to understand what is at stake- the very existence of TRS- perhaps the IFT can explain why its business agents are allowed to participate in TRS when the IEA Uniswerv Directors have their pensions being taken care of by the IEA- Perhaps the IRS would like to know why these private sector employees of the IFT are being aloowed to participate in a Public Sector pension system putting the TRS tax exemption into jeopardy- The IFT has a lot of nerve taking this position given the recent history of its own staff abusing the taxpayers of Illinois with their own employees’ participation in the retirement system funded by Illinois taxpayers - Irish - Thursday, Oct 11, 12 @ 3:40 pm: Fight - there was quite a lot of concern voiced over Mr. Precwinkle’s “deal” from members. It fell on deaf ears in the leadership mostly because it was all very legal per a bit of legislation put through by the Speaker. - Fight for Chicago - Thursday, Oct 11, 12 @ 3:42 pm: Irish- We are talking about leadership, at the moment, not the members. The members didn’t send out that press release. Still proves my point of the rank hypocrisy of the IFT leadership that got caught feeding at the trough. - nickypiii - Thursday, Oct 11, 12 @ 3:45 pm: The many years the State legislature did not fully fund the portion the State is responsible for is the MAIN reason all pension funds are under funded. Yes the actuary tables must be adjusted for future return on investments ,however, the State put us in this mess and should find a way to put the money back into where it was supposed to go in the first place. - Deadbeat - Thursday, Oct 11, 12 @ 3:48 pm: Public employees are not deadbeats like the stakeholders, special interest groups, and politicians who benefitted from the State making faling to make payments. Take some government real estate assets such as land, the tollway, public buildings, public parking facilities, parks, red light cameras, and transfer them into the pension fund. If the pension fund either leases those assets back to the state or enters into a management agreement to collect revenue, funding would be dedicated. The debt we owe our teachers and public employees could be repaid without stealing their life savings after it was borrowed from them. - Old and In the Way - Thursday, Oct 11, 12 @ 3:57 pm: How can i get in on this defined benefits thing? Its simple……Work at the same job for 32 years. Contribute 11% of your salary each month, even when the state doesn’t, live on minimal or no pay raise each year while your medical copays increase and then listen to the overpaid private sector tell you what a great deal you are getting. Then when you want to try and retire have your medical benefits taken away along with cost of living. - sue - Thursday, Oct 11, 12 @ 4:01 pm: Nickiiii-Trust me on this- I know quite a lot about TRS-it is virtually impossible to resolve the years of underfunding- the hole is too deep at this point to avoid a major restructuring of benefits- where do you propose the State come up with what is now like 60 Billion dollars- the problem is that as the money wasn’t put in, the losses got compounded due to the lack of investment returns on the absent dollars- TRS needs at least the following: 1.- Better investment management of its exisitng trust funds 2. Increased contributions from the State and participants 3. Elimination or reduction of the COLA 4. An increase in the retirement age or age when benefits commence 5. Legislate criminal penalties for those abusing end of career salary increases ; and 6. Appointment of a a true professional investment monitor who can serve as the State’s Czar over the investments who would be answerable to the Governor and Legislature- The Trustees at TRS are hard working diligent people but most have no investment credentials and the recent investment returns are proof that more oversight is needed- if the State is on the hook for the unfunded dollars someone needs to be representing the taxpayers - sue - Thursday, Oct 11, 12 @ 4:06 pm: Old and in the Way- are you one of the teachers who had the school district “pick up” the employee contribution- I am sick of hearing about how the teachers have put in their required contributions when so many of them have the monies paid in by their School District employers all of which is paid for by the taxpayers through their real estate taxes- - nickypiii - Thursday, Oct 11, 12 @ 4:12 pm: SUE: REVENUE INCEASES. We’re still a low income tax State. The flat 5% tax is contitutional reality for now. I’d like to see that changed. Additionally, sale tax doesn’t occur in 70 to 80% of transactions State wide because we don’t tax services. That simple change could generate hundreds of millions annually even with lowering the State sales tax rate. Cost shifting will cause school districts to think twice about the size of raises when contract negotiations commence if they have skin in the game. Anybody else have ideas? - Dave Urbanek @ TRS - Thursday, Oct 11, 12 @ 4:14 pm: Director Ingram has no plans to resign. The TRS Board of Trustees meets on October 26 and will have an opportunity to consider the IFT’s statement. Director Ingram understands full well that questions about the long-term financial health of TRS lead to anxiety and concern among our members. These issues unavoidably create difficult questions about the future and hard discussions about solutions. For the sake of our members, we cannot shy away from these discussions. Everyone at TRS is focused on our fiduciary duty to stabilize the System’s finances going forward so that we can fulfill the retirement promises made to all 362,000 of our members. The Trustees recognized last spring that the financial problems faced by state government today could lead to insolvency at TRS in the next few decades unless the situation is corrected. The Board called on the General Assembly to act now to protect our members’ retirements without violating the Illinois Constitution’s pension protection clause. - RNUG - Thursday, Oct 11, 12 @ 4:14 pm: sue, How about instead we legislate removal of the protection state officials and legislators have from lawsuits associated with failing to do their job? Let’s make them personally and fiscally responsible for their actions … That’s what should be on the ballot in November as a constitutional change instead of another attempt to go after the pensions … - dirt diver - Thursday, Oct 11, 12 @ 4:17 pm: Richard Ingram is a sharp guy, but he needs to do he job, which is to pay benefits and administer the retirement in the most cost-efficient manner possible. Unfortunately, Mr. Ingram is more concerned with publicity and getting his name out there. Unfornunately, there are too many people involved in this issue (mainly, ambitious/naive legislators and staff) wanting to make a name for themselves and Ingram is one of those people. The solution to the problem, make the payments. If you can’t make the payments, then amend the Constitution to reduce benefits to reduce liability. IFT is upset because Ingram is a Media Hound looking for public exposure and to elevate to a higher position, perhaps Director of a larger retirement system. - geronimo - Thursday, Oct 11, 12 @ 4:18 pm: Sue—you only thought the taxpayers were paying into the pension funds! You’ve been had too! They took your money and told you it went to funding the pension system and then spent that money on their pet projects or roads or whatever…….To have all of those things AND the proper funding into the pension systems, you would have had one mighty hefty tax increase for all those goods. So the money’s been spent on everyone in state and not on the pension funds. Tell me how in the world that is the employees’ fault. But you as a taxpayer have been hoodwinked too. - zatoichi - Thursday, Oct 11, 12 @ 4:34 pm: I would think telling the teachers union about this option is a basic part of the job. They would be equally mad if he said nothing then several years later the pension collapsed. He would be fingered as a cause whether it was true or not. Just not liking the message does not mean you should not hear it. Maybe the union better look at Kodak wanting to drop retiree medical insurance as part of their bankruptcy proceedings. http://www.the-leader.com/newsnow/x595541079/Kodak-asks-court-to-end-retiree-medical-benefits It can easily get much worse. - Norseman - Thursday, Oct 11, 12 @ 4:52 pm: In the TRS Summer Newsletter, Richard Ingram wrote: “Our job as the administrator of the pension system is not to advocate one way or another for any proposal that affects benefits. Your interests in that regard are represented by organized labor and various member associations. But our role is no less important. Our job is to provide the unvarnished facts and analysis that help lawmakers and state officials separate good ideas from bad ideas and understand the true impact of any proposal.” I totally agree with this policy. However, in reviewing the taped interview, I see how his comments could be viewed as crossing the line from presenting facts to advocating a proposal that contains a specific option - i.e. cutting COLAs. An example of this blurring of the line between fact present to advocate is his comment that “state politicians will have few other options if they want to make MEANINGFUL (emphasis added)progress on closing the gap between promised pension benefits and the available funding” It’s not wise to anger your constituency, but I don’t feel it’s a firing offense. His board needs to remind him of his own words and advise him to stick to the appropriate role of “providing facts and analysis.” - D.P. Gumby - Thursday, Oct 11, 12 @ 4:58 pm: yes, increasing revenue is required because not contributing to the pension by the GA (and by private entities that did the same thing) was use to keep taxes artificially or politically low. So taxpayers have already benefited and must now pay the cost of their irresponsible legislator. Why should only one segment of the public–state employee pensioners–be stuck with the bill run up by all members of the public?? - geronimo - Thursday, Oct 11, 12 @ 5:09 pm: Kodak can’t be compared to this situation. First, did Kodak employees pay ONLY into their pension fund and included in that, payment for future medical insurance and future COLAs when they retire? TRS participants did. They also paid into their future COLAs out of every single pay check. Now, legislators want to eliminate COLAs or reduce them (already paid for by teachers, ahem) and/or take away their health insurance in retirement (also prepaid along the way). Besides, Kodak employees get social security and the article I read states that their pension would not be affected. - Sue - Thursday, Oct 11, 12 @ 5:17 pm: Question for Dave Urbanek-WHERE ARE THE JUNE 30 INVESTMENT RETURNS? TRS historically reports these numbers by now- I am starting to think the investment returns must be awful- otherwise the Board would be looking for the favorable publicity- TRS’ recent substantial increase to hedge funds and other alternatives might be resulting in CALPERS’ like returns of 2 percent annual returns- Given all of the other problems facing the pension programs- God forbid TRS is sitting on sub par numbers- it is the middle of October already so where are the investment numbers?????? - walkinfool - Thursday, Oct 11, 12 @ 5:22 pm: Ingram is clearly meeting his fiduciary responsibility to provide information to help protect the future solvency of the system. He should be thanked for that. He is not meeting the political or PR needs of the organization who represents TRS’ beneficiaries, who want him not to undercut their current negotiating positions. Ethically it’s a clear call in Ingram’s favor. Practically, it’s not so clear. - Sue - Thursday, Oct 11, 12 @ 5:27 pm: Nickipiii- Cost shifting to the Local School Districts is nothing but a red herring- The school districts don’t negotiate over pension benefits- it is all done by the legislature- having the school districts assume any liability is not the answer- the answer is to restructure the programs first by doing what Ingrahm has proposed- gutting the COLA since COLA drives a huge portion of the unfunded liability- The School districts are limited by what they can impose on their tax base through the tax caps-The School districts can be reigned in legislatively- impose salary caps on what can be counted toward pension credit- particularly for overpaid administrators- there isn’t sufficient tax revenue available to solve the unfunded liabilities even with progreesive tax programs or additional rational increases- the unfunding has gone on for too long- Bernie Madoff ran a better investment program then the legislature has been doing with the state pensions - Bill - Thursday, Oct 11, 12 @ 5:30 pm: Dave@TRS The Board also passed a resolution last Spring after the last time Ingram shot off his big mouth about COLAs in the press attempting to muzzle him and make it clear that they did not advocate unconstitutional solutions. His bizarre “new reality pension math” completely ignores the most obvious, fair, moral and constitutional solution. The state has to pay up. Employees didn’t come up with the Edgar ramp and the holidays that followed it. Ingram just assumes that the state won’t pay. That is not reality. It is a cartoon used to advocate illegal cuts in benefits.Cutting COLAs won’t repay the state’s debt and won’t pass muster in court. Ingram has to go. Three strikes and he’s out. Maybe the Civic Committee is hiring. - Bill - Thursday, Oct 11, 12 @ 5:43 pm: Sue, The debt, not benefits, drives the unfunded liability. Over 60% of the state’s required payment each year goes to debt service. The COLA is an annuity that has already been paid for by the employees. The state will have a very difficult time convincing the courts otherwise. So will Ingram if he is still around. - Arthur Andersen - Thursday, Oct 11, 12 @ 5:48 pm: Sue, if you know so much about TRS, you should be able to roughly calculate FY12 performance yourself based on publicly available information. Took me about five minutes. I question the depth of your knowledge based on a couple of your comments and recommendations. An Investment Czar? We had a guy awhile back who fancied himself as that, only without the title. He had some of the same ideas as you. His name was John Filan. Show me one example of this model working anywhere in the public sector. In almost any time period you pick, TRS investments outperform ISBI and SURS; why the lack of concern about those funds? The pay spike scam has hopefully run its course with legislative changes (six years ago) putting the burden on the school board if they choose to give Dr. Wonderful a golden goodbye kiss. Criminal penalties are a) too late, b) unlikely too pass, and c) probably provided for in existing law if a line is truly crossed. As far as Ingram and the IFT, he may not be planning on resigning, but if AA is reading the tea leaves correctly, he may not be given the opportunity. Now that Rahm is interested in TRS, Ingram may be trying to get fired. - geronimo - Thursday, Oct 11, 12 @ 5:49 pm: Bill—-hard to know who’s working for who these days isn’t it? - Arthur Andersen - Thursday, Oct 11, 12 @ 5:52 pm: Right on, Bill. AA forgot about that goofy “New Reality.” - Sue - Thursday, Oct 11, 12 @ 5:54 pm: Bill- with all due respect- you have no idea what you are talking about when you say the employees have already paid for the COLA’s or that the COLA’s are an annuity- the COLA compounds the unfunded liability as does the fact that the actuarial hurdle is applied to the unfunded portion of the liabilities- It has always struck me as being odd that the actuaries assume an 8.5 (now 8 percent) investment return on monies not contributed into the System by the legislature- One thing that could substantially reduce the liability would be for the investment returns to improve- But as you can see, TRS has gone silent on its FYI 2012 performance-the TRS web site still has March 31, 2012 numbers for its latest report? if the Board substantially missed its return targets this past year- the unfunded liabilities will increase- the public markets have had a great run of late but the investment gurus at TRS have decided to reduce their exposure to public marlkets in exchange for alternatives- I guess we will find out if and when they ever report their numbers how the new portfolio is working- CALPERS reported horrible numbers last year due to their infatuation with Hedge funds- TRS seems intent on making things worse for itself but lets give them the benefit of the doubt and maybe they had a great year but just want to keep the numbers to themselves - Sue - Thursday, Oct 11, 12 @ 5:58 pm: Arthur Anderson- So why not share the performance numbers with us- How can you possibly project the investment returns given how much of the portfolio is invested in private market categories(real estate, private equity and Hedge Funds) - Bill - Thursday, Oct 11, 12 @ 6:01 pm: Each employee pays a percentage of salary specifically to fund COLAs and has for 40 years. That, by definition, is an annuity and the state is obligated to pay under the terms of the statute at the time. You can try to talk it away but it is what it is and it is to late for the state to renege now. - Arthur Andersen - Thursday, Oct 11, 12 @ 6:03 pm: THIS JUST IN FROM THE IEA: The Statement from the Illinois Education Association October 11, 2012 Members and leaders of the Illinois Education Association were disappointed and angered by the comments executive director Ingram made to Crain’s Chicago Business regarding TRS pensions in an interview published last week. There was no advance notice that Mr. Ingram had agreed to the interview and no inkling of what Ingram had said until the article was published. IEA and the other members of the Illinois labor coalition oppose all current proposals for reducing the COLAs for any TRS participant. Coalition members also agree that there should be no changes made to the pensions of those who are already retired. When the Crain’s interview was published, IEA President Cinda Klickna and Executive Director Audrey Soglin immediately contacted Mr. Ingram and asked him to write an explanation of his remarks and the context in which the remarks were made. He also was asked to explain the intentions behind the comments. Mr. Ingram wrote his explanation and it was published on the IEA website over the weekend. Regardless of Mr. Ingram’s intentions, his comments have created another storm of controversy. IEA members are understandably frustrated by this situation. This is a TRS personnel issue, which will be addressed through the established channels within the TRS board. - Arthur Andersen - Thursday, Oct 11, 12 @ 6:07 pm: Sue, I know a little bit about TRS, too. I also have enough respect for TRS, the institution, to not disclose information until they are ready to disclose it themselves. You will have to find titillation from another source. - Sue - Thursday, Oct 11, 12 @ 6:21 pm: Arthur Anderson- Maybe if the legislature cut back Chicago’s education funding to the same percentages Springfield affords the suburbs- Rahm would find something other then pension funding to complain about/ As a surburban resident I fund a portion of chicago’s school budget through my income taxes so I don’t feel bad about Chicago residents paying for TRS through their taxes - Educator for reform - Thursday, Oct 11, 12 @ 8:26 pm: By my contributions from my checking over 15 years. I have over 135,000 of my money. My school never paid a dime. I’ll take my money. Invest it myself. Trs won’t be there for me. - eatingdogfood - Friday, Oct 12, 12 @ 9:23 am: Bankruptcy Baby !!! - Ruby - Monday, Oct 15, 12 @ 3:57 pm: The states, including Illinois, are not allowed to declare bankruptcy. But Illinois is very likely allowed to stop funding health care insurance for retired state workers. These benefits are not guaranteed. The state of Illinoisis not allowed to reduce a retired state pension benefit including cost of living increases. However the state of Illinois is allowed to shift some or all of the cost of public teacher and state university workers pensions to the school districts and state universities. The state of Illinois is also allowed to require that some corporations and businesses no longer keep their employees’ state income tax that is deducted from employees’ paychecks, and actually pay this to the state government. Same thing with the state sales tax consumers pay that some businesses are allowed to keep. We can require those businesses to pay sales tax to the state. These corporate benefits are not guaranteed. - Ruby - Monday, Oct 15, 12 @ 4:01 pm: Illinois could be allowed to tax all retirement income including state pensions and social security as well as IRA’s, 401 and 403 accounts. Sorry, comments for this post are now closed.