* We’ve already discussed the TRS statement in question, but this is a new story from the Illinois News Network…
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.
* A search of the TRS website shows the pension fund has actually been using a version of the word “insolvent” for over 6 years…
December 19, 2012
Dear TRS Members:
This report summarizes the financial condition, investments, actuarial conclusions and statistical information about members, school districts, revenues and benefits for TRS during the past fiscal year. […]
Our members and Illinois taxpayers deserve a solution that puts TRS on permanently sound financial footing. There are no magic answers awaiting discovery, only tough choices. In response to this situation, the TRS Board of Trustees in 2012 approved a resolution that acknowledged the threat of insolvency due to these fiscal challenges.
* There are other mentions, but here’s 2017…
“The changes enacted this year in the pension funding formula move TRS further away from financial stability and continue to kick the can down the road. Period,” said Dick Ingram, executive director of TRS. “Cutting the state’s contribution only increases our concern that TRS will eventually become insolvent.”
The TRS unfunded liability in FY 2012 was 40.6 percent. It was 40.2 percent in Fiscal Year 2017.
And now you may see why some folks say using the word “crisis” when talking about the pension issue can be counter-productive and force the General Assembly to take hasty action that doesn’t really do much. Also, crying “Wolf!” might do more harm than good. It certainly hasn’t done much good so far.
* To be clear here, this is a very real and truly vexing problem. And skipping almost $900 million in pension payments for seven years, as the governor proposes doing, is only gonna make it worse.
What we need to do is pay into the freaking system and stop the gimmicks and the scare tactics. Neither are getting us anywhere. You wanna help? Find $2 billion a year. Auditing state contractors ain’t gonna do that.