Capitol Fax.com - Your Illinois News Radar » Today’s number: $6.88 billion
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Today’s number: $6.88 billion

Monday, Oct 31, 2016

* Shaw Media

The Teachers’ Retirement System of the State of Illinois announced Friday it had given preliminary approval to a contribution request for $4.56 billion to its pension fund.

The changes in state law made last year for determining actuaries’ estimates for adequately funding pensions have greatly increased the amount of contributions statewide.

The Teacher’s Retirement System said of the projected $4.56 billion contribution, just $974 million is needed to pay the cost of pensions for that year. The remaining $3.5 billion is to go toward the amount owed from previous years.

“Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

While next year’s contribution to the teachers’ pensions is an eye-popping figure, it is far short of the actuaries’ ceiling. Using the new accounting standards, the state’s annual contribution should be $6.88 billion to catch up with its unfunded liability.

- Posted by Rich Miller        

30 Comments
  1. - Bothanspied - Monday, Oct 31, 16 @ 10:19 am:

    where is that 4.56B contribution going to come from?


  2. - RNUG - Monday, Oct 31, 16 @ 10:31 am:

    == where is that 4.56B contribution going to come from? ==

    Primarily GRF …


  3. - allknowingmasterofracoondom - Monday, Oct 31, 16 @ 10:51 am:

    And we keep electing the same people to office who oversee our spending.

    WE deserve this.


  4. - Last Bull Moose - Monday, Oct 31, 16 @ 10:52 am:

    In the pension discussion, the focus is on State workers, but I think that teachers are the bulk of the pension costs.Better to take money from a faceless bureaucrat than your first grade teacher.


  5. - yeah - Monday, Oct 31, 16 @ 10:55 am:

    But, but …we were told if only we legalized casinos, we’d never have to worry about School funding again? Were they fibbing to us 25 years ago?


  6. - Blue dog dem - Monday, Oct 31, 16 @ 11:06 am:

    Yeah. Silly you. Didnt you mean the lottery?


  7. - JS Mill - Monday, Oct 31, 16 @ 11:25 am:

    =But, but …we were told if only we legalized casinos, we’d never have to worry about School funding again? Were they fibbing to us 25 years ago?=

    The next time a politician talks about a new funding source just ask them if they know the difference between supplement and supplant.

    The lottery is an early example of supplant.


  8. - City Zen - Monday, Oct 31, 16 @ 11:40 am:

    “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    Makes it sound like all we needed back then was an “Easy” button.


  9. - RNUG - Monday, Oct 31, 16 @ 11:46 am:

    == In the pension discussion, the focus is on State workers, but I think that teachers are the bulk of the pension costs.Better to take money from a faceless bureaucrat than your first grade teacher.==

    Yes, they are.

    TRS alone is by far the biggest, SURS (more teachers) is next, closely followed by SERS (what most people think of as State employees), then GARS (that is just about a rounding error), and finally JRS (that is so small by comparison it isn’t even a rounding error).


  10. - Federalist - Monday, Oct 31, 16 @ 12:05 pm:

    “Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    The money was spent on “other priorities” for the last 40+ years. Tthus this mess today.


  11. - titan - Monday, Oct 31, 16 @ 12:25 pm:

    +++ “Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.” +++

    And thus, most of the problem would not be fixed by amending the Constitution or eliminating pensions for future hires. Most of the problem is, in effect, irresponsible past stealth borrowing.


  12. - Ron - Monday, Oct 31, 16 @ 1:30 pm:

    Sounds like a default is in our future.


  13. - Anonymous - Monday, Oct 31, 16 @ 1:30 pm:

    ==The Teacher’s Retirement System said of the projected $4.56 billion contribution, just $974 million is needed to pay the cost of pensions for that year. ==

    People who look at the $100+ billion unfunded pension liability and say “defined benefit plans are not sustainable” should look at these numbers and and realize that the truth is that “Running up a credit card bill is not sustainable.” The normal costs of staying current with the pension are only a tiny portion of the mess. And, as others have noted, the majority of the mess is for downstate teachers, not for executive branch employees. University employees are another big chunk of it.


  14. - JS Mill - Monday, Oct 31, 16 @ 2:24 pm:

    =Sounds like a default is in our future.=

    No Ron, it sounds like your taxes are going up.

    Thank you for your contribution!


  15. - JS Mill - Monday, Oct 31, 16 @ 2:25 pm:

    = And, as others have noted, the majority of the mess is for downstate teachers=

    Uh, no.

    Suburban teachers out number those considered “downstate” and all of them outside of CPS (whose pension is suffering the same issues) are in TRS.


  16. - Anonymous - Monday, Oct 31, 16 @ 2:32 pm:

    The credit card company has said no more late/minimal payments. You now owe X. Pay up. What we owe the workers who have done the work and contributed toward their pensions (and now are due them) may be painful but not their creation. We all need to pay rather than be deadbeats like the state.


  17. - Shemp - Monday, Oct 31, 16 @ 2:41 pm:

    “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    That’ s because the collective “we” chose other priorities in the past.


  18. - CapnCrunch - Monday, Oct 31, 16 @ 4:37 pm:

    “No Ron, it sounds like your taxes are going up.
    Thank you for your contribution!”

    It could get exciting when the boys and girls in Springfield tell us they are raising our taxes to pay for pension benefits and not for new services.


  19. - Anonymous - Monday, Oct 31, 16 @ 5:10 pm:

    Capn

    Are you suggesting the state stiff workers out of their already paid (by them) retirement income?


  20. - JS Mill - Monday, Oct 31, 16 @ 5:26 pm:

    @Capn- “exciting” is an understatement.

    What I am interested to find out is if anyone will propose an increase and who or whom that might be.

    I suggest Rock Paper Scissors to decide.


  21. - Back to Reality - Monday, Oct 31, 16 @ 5:52 pm:

    @Capn

    ==It could get exciting when the boys and girls in Springfield tell us they are raising our taxes to pay for pension benefits and not for new services.==

    The statement you predict will certainly happen, even though it is inaccurate and deceptive(as usual).

    The truth is the boys and girls in Springfield will be raising our taxes to pay for past debt they created, and not for new services.

    I wouldn’t expect the truth from a politician when it is so much easier for them to blame the “usual suspects”.


  22. - CapnCrunch - Monday, Oct 31, 16 @ 7:00 pm:

    “The truth is the boys and girls in Springfield will be raising our taxes to pay for past debt they created, and not for new services.”

    You can say a tax increase is needed to pay back debt or even pay for chopped liver but the reality is that it is needed to guarantee future pension benefits.


  23. - Anonymous - Monday, Oct 31, 16 @ 7:54 pm:

    Um, hello. The debt is the debt to pension funds for all that wasn’t put into them and the interest accrued on that debt. Please keep up.


  24. - Back to Reality - Monday, Oct 31, 16 @ 9:00 pm:

    @Capn,

    Are you trying to imply that we only need to pay our debts if we borrow money from certain people?

    I guess I’m confused. I always thought that money was fungible. Opportunity costs of not paying into pension funds when due (and spending the money on other things) include the fact that we still owe the debt and may have to forgo other choices in the future to pay it.

    The GA is not paying to “guarantee” future payments, they are paying back a portion of the money (remuneration plus interest) already earned by and owed to teachers that was never paid.

    That money was supposed to be deposited in the pension fund. Instead, it was “borrowed” and spent on other things. It is still owed.

    T.R.S. presently pays pensions, not the General Assembly. No “guarantee” of pension payments by the state ever requires a payment to the pension fund, only payment to pensioners.

    That so called “guarantee” only goes into effect if T.R.S. becomes insolvent.

    Since T.R.S. presently has more than 40 Billion dollars in assets, (and pays out about 4.5 billion in pension payments per year), I think they are not likely to become insolvent soon.


  25. - City Zen - Monday, Oct 31, 16 @ 9:46 pm:

    ==What we owe the workers who have done the work and contributed toward their pensions (and now are due them) may be painful but not their creation. ==

    ==That money was supposed to be deposited in the pension fund. Instead, it was “borrowed” and spent on other things. ==

    Like employee salaries, raises, health benefits, promotions, job openings, pension spikes. This list goes on and on. All funded with money that wouldn’t have been there if we made those pension contributions.

    Even TRS qualifies. Could a school district have afforded that 4% COLA raise in a contract if the state had to cut 30% of its funding to that district to make pension payments? Maybe that raise would’ve been 2%. Or no pension pick-up. Or more expensive health benefits. Pick and chose a career’s worth of salary adjustments downward.

    The pension debt is owed. The courts say as such. That doesn’t mean you have to blind to the game.


  26. - JS Mill - Tuesday, Nov 1, 16 @ 8:30 am:

    =Could a school district have afforded that 4% COLA raise in a contract if the state had to cut 30% of its funding to that district to make pension payments? Maybe that raise would’ve been 2%. Or no pension pick-up. Or more expensive health benefits. Pick and chose a career’s worth of salary adjustments downward.=

    Your example/supposition is poor. The costs of funding the pensions properly for the past 90 plus years would have been minimal in comparison to the current debt. We now have to pay a bill that includes decades of penalties and added interest.


  27. - City Zen - Tuesday, Nov 1, 16 @ 9:03 am:

    ==Your example/supposition is poor.==

    Actually, it’s spot on. If we didn’t have the money to pay the full ARC all these years, where would it have come from? Exactly where I stated. And those suggested full ARC payments weren’t really “full” because it used extremely high interest rate assumptions, as the recent accounting rule changes for pensions have shown.


  28. - Back from Reality - Tuesday, Nov 1, 16 @ 9:39 am:

    @Cityzen

    Your scenario only works if state revenue is the only money available to pay salary and benefits. In many districts State revenue does not affect much because that contribution to the school budget small to begin with.

    The answer to your question is yes. They could and did afford it.


  29. - City Zen - Tuesday, Nov 1, 16 @ 12:21 pm:

    =Your scenario only works if state revenue is the only money available to pay salary and benefits. In many districts State revenue does not affect much because that contribution to the school budget small to begin with. In many districts State revenue does not affect much because that contribution to the school budget small to begin with.==

    I never said it was the only component. Your assumption is when state funding goes down, property taxes goes up. There is no rule it has to happen that way, and certainly not decade after decade.

    Your argument is basically that absolutely zero would have changed about someone’s compensation over 3 decades with less revenue for operating expenses (salaries). Seems highly unlikely.


  30. - Back from Reality - Tuesday, Nov 1, 16 @ 12:58 pm:

    @Cityzen

    I do not mean to give the impression that I think that zero would change in compensation. I do believe you overstate the impact of these hypothetical cuts in state funding.

    You may not say it, but the reductions in salary and benefits you forecast as an outcome of paying pension contributions on time only happen if funding reductions actually impact the school budget.

    Many schools do not receive much funding from the state. They are not dependent on the state as a primary revenue source.

    If local tax levies already carry the burden of funding those salaries and benefits, and federal funds are unaffected, no reduction of the budget has actually occurred. Local levies would stay the same.

    A cut in revenue never given to you in the first place doesn’t affect you. I think you may overestimate how much of the cost of local schools state revenue pays for.

    I respectfully disagree with your assertion that salary and benefits would automatically be reduced because state funding paid pension costs. I think more would have to happen.


Sorry, comments for this post are now closed.


* Janus apparently no longer loves his state job, hires on with Illinois Policy Institute
* Reader comments closed for the weekend
* Pritzker meets with moms who've lost their kids to street violence, police shootings
* SUBSCRIBERS ONLY - Fundraiser list
* Question of the day
* Caption contest!
* SUBSCRIBERS ONLY - Campaign stuff: Morrison; Ives; Skillicorn; Nybo; Rooney; Curran; Breen; Frese
* "And admit that the waters/Around you have grown"
* A tiny bit of good news from Moody's
* Proft files suit so his independent expenditure committee can coordinate with campaigns after caps busted
* Cook shifts governor's race from "Toss Up" to "Lean Democrat" - Third-party candidates "the tipping point"
* Unsolicited advice
* The impasse and the damage done
* Entire IPHCA executive committee resigns, lawyer let go after racism controversy
* Chicago to get its first public law school, but is it a wise move?
* Doom and gloom abounds, but a new pension idea emerges
* Another lawsuit filed in Quincy veterans' home deaths: "For a year and a half, he loved that place. And it killed him"
* *** LIVE COVERAGE ***
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............
<


Loading


* Letter: Gun dealer certification should be a law..
* Chicago gun safety activists at Pitchfork look .....
* Rauner names former general counsel to Illinois.....
* Statehouse Insider: Prognosticator says Rauner .....
* Chuck Sweeny: Rebecca Motley excited about dire.....
* Bernard Schoenburg: Purchase may, Cahnman will .....
* Letter: Business people do not understand politics..
* Delco supports 180 miles of multi-purpose circu.....
* Legislation signed requiring protection for sta.....
* Southern Illinois legislators sound off on late.....


* A look at the 17 people killed in the Missouri boat accident
* Memorial service planned Missouri boating accident victims
* Man slain, 6 wounded during Chicago neighborhood shooting
* Razing of tainted NW Indiana housing complex nearly complete
* Task force seeks cutting Illinois female prison population
* The Latest: Ex-NTSB chairman: Duck boats prone to accidents
* $13.5M insurance fraud alleged in Chicago
* Galesburg railroad underpass opens, eases traffic congestion
* Ground broken on restaurant, e-commerce site in Chicago
* EXCHANGE: Museum expects to profit from Joliet prison tours

* Marginal amounts of legionella detected in Stratton Building
* Moody's gives Illinois finances a 'stable' outlook
* Illinois Army National Guard soldiers return home
* Marginal amouts of legionella detected in Stratton Building
* Under the Dome Podcast: Gun bills, Quincy, Trump-Putin reaction
* Incumbents hold big fundraising leads in central Illinois legislative races
* Springfield man wins Illinois State Police logo contest
* Rauner 'deeply troubled' by Trump's Helsinki comments
* Rauner signs bill to ease physician assistant hiring
* Bill taking Illinois out of voter registration system vetoed

* Home Run Pizza CEO dies
* Home Run Inn Pizza CEO dies
* Your neighbor isn't a business
* The future of the U.S. looks a lot like Chicago
* Cook County board moves to prevent repeat of pop tax fiasco


* Man shot to death in northwest Indiana
* Judge sticking to firm deadline to return children taken from parents at border
* Young players don’t get importance of defense, Ozzie Guillen says
* Boy, 15, shot in northwest Indiana
* Francesco Molinari wins 2018 British Open
* Britain’s Prince George celebrates 5th birthday
* Person shot to death in Lansing parking lot
* Theo Epstein: Cubs can’t be “overly reliant” on Yu Darvish
* Vikings offensive line coach Tony Sparano dead at age 56
* Beyond a reasonable doubt, it’s a big country in need of citizens


* A look at the 17 people killed in the Missouri boat accident
* Francesco Molinari survives wild day to win British Open, becoming first Italian to claim major golf championship
* Americans give Trump negative marks for performance at Helsinki summit, poll finds
* Evanston's Harley Clarke Mansion faces Monday vote for demolition agreement
* After 9th inning heroics, Leury Garcia starts in left for White Sox against Mariners
* State police probing officer-involved shooting in Markham
* Woman killed in Lansing shooting
* From shortstop to QB to coach, Jeff Brohm on why he stayed at Purdue: ‘We get up earlier and stay up later. Makes it more fun.’
* Feds started probing source of $6M used to fund Harvey library expansion mere weeks after 2015 groundbreaking
* Live blog: Pitchfork Music Festival 2018 - day 3


» The Week in Review: Public Outcry Over Police-Involved Shooting
» ‘Ali: A Life’; Sexual Harassment In Bars; NPR’s Sam Sanders
» WBEZ’s Chicago and Illinois News Roundup: July 20, 2018
» UIC To Acquire John Marshall Law School, Creating The City’s First Public Law School
» State Week: Russia Reactions, Gun Laws, Campaign Cash
» #660 PJ Morton & Opinions on Drake
» July 19, 2018 - Full Show
» Berwyn Homeowners Squeezed By School District Miscalculation
» How Conservatism Won In Wisconsin; Illinois Election Security; Special Olympics 50th Anniversary
» Illinois Prison Officials Accused of Abusing Transgender Inmate


* Adams: Try umpiring before knocking it
* Faith Coalition for the Common Good: Women collaborate for the common good
* Guest View: How to solve the Illinois pension crisis and dramatically lower property taxes
* Our View: Let the new EDC director lead the way
* Statehouse Insider: Prognosticator says Rauner most vulnerable incumbent
* Bernard Schoenburg: Purchase may, Cahnman will take on Proctor in Ward 5
* Scott Reeder: Understanding is what journalism should be about
* Counterpoint: His pick is bad news indeed for health care, women, consumers and unions
* Point: Kavanaugh is truly a 'judge's judge' and precisely what our nation needs
* Eugene Robinson: The 'deep state' stands between us and the abyss


* Road closure: Vernon Ave., Interstate 74
* Coroner identifies Saturday murder victim
* How well do you follow Quad-City News? Take our weekly quiz
* Wood River woman, 21, killed after car goes into group of people, police say
* The ever-changing workplace: Experts see importance of diverse and inclusive workplaces in the Q-C
* Cash Course: Planning for retirement as a 20-something
* Couple hospitalized after Southern Illinois boat explosion
* Column | Alee Quick: Panel seeks to make women the majority in Illinois Legislature
* PFOP: It was ‘dog eat dog’ in the 19th century
* ‘I’d rather it happen to me’: Food pantry director grateful that others weren’t hurt


* Former Penn St women's hoops coach Rene Portland dies at 65
* 'Equalizer 2' squeaks past 'Mamma Mia 2' and takes top spot
* How rise in opioid deaths takes toll on funeral home operators
* Vikings offensive line coach Tony Sparano dies at 56
* Royals obtain Goodwin in trade with Nationals

* Cook County board moves to prevent repeat ...
* Want to be Chicago's next mayor? Make ...
* How area members of Congress voted on voti...
* July 20th 2018, TIAM Overtime
* Rauner embrace of Trump means more questio...
* Rep. Bustos tasked with negotiating final ...
* PCHS art students get a taste of possibili...
* Democrats hold party event Sunday
* Farm bill progress, trade moves and hot dogs
* Where 8 potential Dem leaders stand on ene...

* Casten, Roskam debate spending bill to str......
* China Mobile Hd Adr F (CHL) Shareholder Pr......
* Fdx Advisors Has Decreased Boeing Co Com (......
* Bb&T Increased Lloyds Banking (LYG) Ho......
* ThunderEnlightning, July 21, 2018...

* Congress eyes 2026 centennial, tourism pot......
* Bernie Sanders and Alexandria Ocasio-Corte......
* The age of Alexandria Ocasio-Cortez...
* Bernie Sanders, Alexandria Ocasio-Cortez B......
* In the Trump era, some find escapism in &#......

* Blood Orange fought oppression with empathy and collaboration at Pitchfork
* I’m outraged and I want an investigation.
* Sunday rain. Give them an inch and they will take a Lincoln yard.
* College Opportunity at Risk
* Where work pays: How does where you live matter for your earnings?
* How to start a virtual coding boot camp in five easy steps
* A College Prices Its Online Programs 60% Less
* OPMs: Pitfalls and opportunities.
* The Sooner You Get Your First AI Job, the Better for Your Career
* Semaphore rail signals


* THOMAS RHETT TO DELIVER ?UNFORGETTABLE' PERFORMANCE AT 2018 ILLINOIS STATE FAIR
* IDPH Investigation Continues As Foodborne Illnesses Increase
* Gov. Rauner signs HB 5611
* Summit for Success: IDOT providing tools, opportunity for disadvantaged businesses
* Illinois Payrolls Jump +18,100

  
* Weekly poll: where to go after the notch?
* Comic-Con 2018 trailer round-up: Aquaman, Godzilla, Star Wars: The Clone Wars, and more
* Samsung’s next wireless charger will juice up two devices at once
* My team used to suck at meetings, but now people are begging us to share our secret sauce
* Sega teases a Phantasy Star mobile game, but says little else
* Sunday debate: Faster charging vs wider support
* Samsung Galaxy S9 gets 480fps mode, but you should stick to 240fps or 960fps

* White Sox Minor League Update: July 21, 2018
* Six Pack of Stats: White Sox 5, Mariners 0
* Jimenez, Rutherford in Saturday's top prospects
* Covey tosses gem, Leury robs HR in shutout
* Covey overthrows King Felix, 5-0
* Covey rebounds with scoreless gem vs. M's
* Moncada sets goal to reduce strikeouts


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller