Today’s quotable
Monday, Nov 5, 2018 - Posted by Rich Miller
* Doug Finke quotes a Teachers Retirement System press release…
TRS made sure to emphasize the financial issues facing the system in a news release about the trustees’ action. It noted that TRS’ unfunded liability grew to $75.8 billion in the last budget year “due to the 80th consecutive year of underfunding from state government.”
“Since its founding in 1939, state government has never once appropriated an annual contribution to TRS that equaled full funding in any year,” the news release said.
- 47th Ward - Monday, Nov 5, 18 @ 10:48 am:
1939? Isn’t that when Madigan was first elected?
- City Zen - Monday, Nov 5, 18 @ 10:48 am:
Tier 2: 40 Years Too Late
- Ravenswood Right Winger - Monday, Nov 5, 18 @ 10:48 am:
47th Ward wins post of the day!
Seriously, 80 years? Wow.
- wordslinger - Monday, Nov 5, 18 @ 10:56 am:
1939, great year for movies, not so much for Poland.
So during this never-ending pension “crisis” the Chicken Littles are always howling about (big scary numbers), how many times did pension checks fail to go out?
In the last 80 years, has anyone been able to lead a fulfilling life in Illinois, with the weight of this “crisis, decades-in-the-making” on their shoulders?
- Not a Billionaire - Monday, Nov 5, 18 @ 11:49 am:
I think the pensioners have done their share in financing state government.
- Anonymous - Monday, Nov 5, 18 @ 12:10 pm:
And a great BIG thank you to all you teachers out there.
- JS Mill - Monday, Nov 5, 18 @ 12:50 pm:
=In the last 80 years, has anyone been able to lead a fulfilling life in Illinois, with the weight of this “crisis, decades-in-the-making” on their shoulders?=
Only a crisis when it was politically advantageous. That goes for D’s and R’s.
Regardless of administration TRS has been funded at about 40% of liabilities since 1970. Disproving the narrative that the pension is unsustainable. !970 is important because that is when the pension was codified by the Illinois Constitution. That was done to protect hard working middle class families from opportunistic politicians.
In typical fashion of politicians great and small, the pension has been made the financial scapegoat when in fact it is the politicians who failed and siphoned off money for other things creating this debt.
Debt is the issue, not pensions. Plain and simple.
- NoGifts - Monday, Nov 5, 18 @ 1:23 pm:
And the schools never paid social security contributions for covered employees. Teacher pensions took the place of social security.
- Steve - Monday, Nov 5, 18 @ 2:08 pm:
This is a great reason not to have public pensions…
- PAM - Monday, Nov 5, 18 @ 2:18 pm:
The Statement is opportunistic. For the first 6 decades, it was seldom recommended that a large retirement fund have 100% coverage of liabilities. 80% was considered ‘fully’ funded. How did the early contributions do when compared to the standard of the day?
- anon2 - Monday, Nov 5, 18 @ 2:19 pm:
=== This is a great reason not to have public pensions… ===
This is a great reason not to leave it up to elected officials to voluntarily make timely and complete employer contributions. Fixed it.
One state pension system is relatively healthy, the IMRF. The reason is that municipal employers are required to make timely and complete contributions to the system. Consequently, there is no huge unfunded IMRF liability. Employers only pay on the expenses accrued each year, instead of paying mainly interest on debt the way the state has to for the other state pension funds.
Since the crisis was created by the lack of discipline, the solution is not to toss out the pension system, but to toss out the discretion to delay employer payments.
- Anonymous - Monday, Nov 5, 18 @ 2:23 pm:
==great reason not to have public pensions==
Only from the standpoint that politicians can steal from the intended contributions to pay for other expenditures. As seen also in the private sector, pensions disappeared because those running companies kept the cash for themselves (didn’t even spend on others as our politicians have done to teachers). But if kept honest, pension plans can and do work. It’s not the plan, it’s the thieves.
- Anonymous - Monday, Nov 5, 18 @ 2:25 pm:
IMRF is not relatively healthy, it is robust! I believe it’s funded somewhere in the 90+% age. As stated above, because no one could steal the funds.
- Rich Miller - Monday, Nov 5, 18 @ 2:26 pm:
===because no one could steal the funds===
That and no three percent compounded interest.
- Anonymous - Monday, Nov 5, 18 @ 2:29 pm:
Not so sure about that 3% compounded interest Rich.
How does that cost compare to a 13th check each year for IMRF recipients?
- JS Mill - Monday, Nov 5, 18 @ 2:46 pm:
=That and no three percent compounded interest.=
Per Eric Madair, the AAI is the single greatest driver of the annual cost of the pension.
But, AAI has little to do with the pension debt. And it is the debt that is the problem not the annual cost of the pension.
- City Zen - Monday, Nov 5, 18 @ 4:37 pm:
==How does that cost compare to a 13th check each year for IMRF recipients?==
Over the long-term, compounded COLA beats 13th check.
- Anonymous - Monday, Nov 5, 18 @ 4:59 pm:
==over the long run……
Must take a while then…
- City Zen - Monday, Nov 5, 18 @ 5:28 pm:
==Must take a while then…==
Not as long as it used to. The 13th check calculation is based on ratio of retirees to workers, so that percentage declines every year, as does the amount of the 13th check.
Depending on when you retired, it takes compounded COLA 15-20 years to catch up to 13th check. But once it does, it leaves it in the dust. If I had to pick one, it would be compounded COLA.