* Unanimous statement by the Teachers’ Retirement System Board of Trustees…
The Teachers’ Retirement System is currently 40 percent funded. The system is at a growing risk of insolvency in the event of an economic downturn. 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.
The TRS Board’s fiduciary duty to its 417,000 members is its paramount concern. The payment of future TRS benefits are jeopardized without a credible plan to address the System’s long-term sustainability. The TRS Board and staff unanimously adopts the following positions and will actively pursue their realization as a state government budget is developed for fiscal year 2020:
* TRS opposes any Fiscal 2020 budget for the state of Illinois that will appropriate to the System less than $4,813,577,696, the contribution calculated under state pension funding law and certified by the System on January 14, 2019.
* TRS opposes any extension of the target date currently in statute for the System to reach 90 percent funding. The target should remain no later than fiscal year 2045.
* TRS repeats its long-standing warning that the state’s current pension funding law perpetually locks in underfunding for the system. A “full funding” state contribution for TRS in FY 2020 is $7,878,670,709, as certified in January of this year.
* TRS opposes any expansion of the current member “buyout” program if an expanded program does not fund the buyouts with monies other than from System assets. At a funding level of 40 percent, TRS is not accumulating any assets to pay the future benefits of active members and could not afford to buy them out.
* We respectfully request that, as in recent years, TRS and our system actuaries participate in the fiscal analysis and evaluation of any proposals that would impact the system and its members.
We stand ready to work with anyone on solutions to these important issues.
I’ve asked the governor’s office for a response.
*** UPDATE *** And here’s the governor’s office response, such as it is…
Illinois is facing enormous fiscal challenges, with multi-billion dollar deficits projected for years to come. Governor Pritzker has proposed a bridge budget and a plan that will put Illinois on a path to firmer fiscal footing through the fair income tax.