Pension debt grows to $139.7 billion
By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com
SPRINGFIELD – Illinois’ unfunded pension liability grew by $9.8 billion, or 7.5 percent, in the fiscal year that ended June 30, due in large part to market losses in a volatile economy.
The Commission on Government Forecasting and Accountability reported Thursday that the total unfunded liability in the state’s five pension funds reached a total of $139.7 billion, leaving them with a funded ratio of just 44.1 percent.
Those numbers are based on an annual report from the state actuary, who reviews the preliminary financial data submitted by each of the five funds.
The funded ratio reflects the difference in the market value of the funds’ assets and the amount of money the funds would need to immediately pay all members the full amounts of benefits they are owed for the rest of time.
Although that’s an important measure of the systems’ long-term financial health, it does not reflect their current ability to pay out benefits that are owed. All five of the pension funds continue to pay out benefits to eligible retirees on a timely basis.
All told, the five pension funds had combined liabilities of $248.8 billion June 30 and total assets of $109.1 billion.
Of the five funds, the Illinois Teachers Retirement System, which is the state’s largest pension fund, showed the strongest performance, losing only 1.2 percent of its market value. In a statement Wednesday, TRS said the median rate of return among large pension systems during the year was -7.6 percent.
The State University Retirement System lost 1.4 percent of its value. The State Employee Retirement System, Judicial Retirement System and General Assembly Retirement System all saw market value losses greater than 6 percent.
Pension systems generally receive funding from three sources – employee contributions; employer contributions; and returns on investments. The large unfunded liability in Illinois’ pension funds is the result of the state failing for decades to make adequate contributions as the employer.
In 1994, then-Gov. Jim Edgar, a Republican, pushed through legislation whereby the state would gradually increase its contributions over the next 50 years until the funding ratio would reach 90 percent by 2045, a plan commonly referred to as the “Edgar Ramp.”
But the state has not always met its targets under that plan. In 2005, lawmakers passed a bill allowing reduced contributions, known as “pension holidays,” in times of budgetary pressure. As a result, contributions in 2006 and 2007 were roughly $1 billion lower than the amounts required under the Edgar Ramp.
The financial crisis in 2007-2008 that led to the Great Recession also resulted in significant losses for the pension funds.
Since taking office in 2019, Democratic Gov. JB Pritzker has included full funding at the statutorily required levels in each of his budgets, and over the past two fiscal years authorized an additional $500 million above what was required by law, bringing the total amount paid in to just under $11 billion, including $9.9 billion from the General Revenue Fund.
Under the 1995 law, each of the funds is required to submit a certification prior to Nov. 1 stating how much the state needs to contribute the following fiscal year.
According to those reports, COGFA said, preliminary estimates show the required contributions for the upcoming fiscal year will total $10.9 billion, including $9.8 billion from general revenues. Even that, however, would be far short of what it would take to cover the actual costs that the funds will accrue during the year.
The “actuarily determined contributions” for the five funds – the amount the state would be obligated to pay, even if the systems were 100-percent funded – would be $15.4 billion.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government that is distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
Local News
Oak Lawn officials rip governor, legislators over crime
Spread the loveBy Joe Boyle Two Oak Lawn officials are calling for Gov. J.B. Pritzker and local legislators to re-evaluate a police reform law that they say has resulted in a rise in crime. Trustee Alex Olejniczak (2nd) served as mayor pro-tem during the Oak Lawn Village Board meeting Tuesday night in place of Mayor Terry Vorderer,…
Troop 1441 Scout earns Eagle rank
Spread the loveFrom staff reports A journey that began years ago for Adrian Ayala recently culminated in Boy Scouting’s highest honor. Ayala, a member of Boy Scout Troop 1441 (sponsored by the St. Mary Star of the Sea Holy Name Society) was honored at an Eagle ceremony at Duggan Hall on Jan. 13. The Eagle rank…
Hog Wild to open Monday in Oak Lawn
Spread the loveBy Kelly White Dining choices will get a boost in Oak Lawn with the arrival of Hog Wild. The restaurant is scheduled to open Monday, January 17, at 4040 W. 111th St. That’s a week later than originally scheduled. “We are very fortunate here in Oak Lawn to have attracted Hog Wild,” Oak…
Home security cameras could be big help to Orland cops
Spread the loveBy Jeff Vorva Residents of Orland Park could have a hand in solving crime in the village. The board of trustees unanimously approved to move forward with a voluntary security camera registration program at its Jan. 4 meeting. It’s expected to start on Feb. 1. This program gives citizens and businesses a chance…
Ailing eagle on the mend
Spread the loveSeveral blocks northwest of Garfield Ridge—just west of 47th and Harlem–motorists late last month noticed an eagle flying low and acting erratically. The Villa Park-based Chicago Bird Collision Monitors was contacted, and its volunteers found and captured the majestic bird. It was transported to a facility owned and operated by Glen Ellyn-based Willowbrook…
Can’t we just fast-forward to spring?
Spread the loveBy Joan Hadac Your correspondent in Clearing and Garfield Ridge (708) 496-0265 • joan.hadac@gmail.com Hi everyone. Is it spring yet? Is the pandemic over yet? Not that I’m impatient or anything. I want to move forward past all the negative COVID-19 has brought to my life and everyone else’s life. I want to see…
Scavenger Sale different this year, Pappas says
Spread the loveFrom staff reports Cook County Treasurer Maria Pappas’ 2022 Scavenger Sale will look different, as the Treasurer’s Office takes steps to help small developers, homeowners and investors rebuild neighborhoods and create generational wealth. Under Illinois law, the Treasurer’s Office is required to conduct a Scavenger Sale every two years, offering at auction the…
Give poor countries a break, Chuy says
Spread the loveFrom staff reports U.S. Rep. Jesús “Chuy” García (D-4th) is one of 18 Members of Congress who recently sent a letter to Treasury Secretary Janet Yellen, urging her to use the voice and vote of the United States at the International Monetary Fund (IMF) to abolish the IMF’s surcharge policy, which requires countries…
Neighbors
Shepard’s yearbook wins national recognition
Spread the loveBy Kelly White Shepard High School students have worked tirelessly to create a yearbook for this academic year that was nationally recognized. The high school, 13049 S. Ridgeland Ave. in Palos Heights, was chosen as a Yearbook Excellence Contest recipient from Walsworth Publishing Company, a family-owned printing company based out of Marceline, Missouri.…
Hickory Hills man charged in grandfather’s murder
Spread the loveBy Nuha Abdessalam A 32-year-old Hickory Hills man has been charged with first-degree murder in the June 21 death of his 90-year-old grandfather. Dean J. Faulk was charged on June 22 with the June 21 murder of Dean L. Faulk. Police said they responded to a call at 9:45 a.m. June 21 at…
Orland Park Public Library kicks off summer
Spread the loveBy Kelly White Summer is nearly here and the Orland Park Public Library is ready for it. On June 8, the library, 14921 S. Ravinia Ave., hosted its second annual Summer Reading Challenge Kick-Off event themed, Read, Renew, Repeat. “There are multiple interpretations to this theme,” Jackie Boyd, Communications Manager at the Orland…
llinois VFW names Porfirio Senator of the Year
Spread the loveIllinois Veterans of Foreign Wars recently selected state Senator Mike Porfirio as the Senator of the Year. “I’m deeply honored to receive this prestigious award from the Illinois VFW,” said Porfirio (D-Lyons Township). “I am committed to ensuring our veterans receive the protections, care and dignity they deserve. This recognition is a testament…
Niego Real Estate salutes America again
Spread the love. Popular flag program underway . By Tim Hadac Clearing and Garfield Ridge residents who want to decorate their blocks in red, white and blue this Independence Day are encouraged to contact Niego Real Estate and reserve a supply of U.S. flags at no charge. The popular program to promote patriotism and community…
Lyons Mental Health Commission pulls LeaderShop funding
Spread the loveExecutive director accused of harassment From staff reports The local nonprofit service community was jolted when nearly $300,000 in mental health funds was withdrawn by a Lyons Township agency from the Western Springs LeaderShop, a social service agency that has provided youth programs for nearly 40 years. The Lyons Township Mental Health Commission…
Boys Hoops | St. Laurence, Marist, Oak Lawn among teams striving to reach next level
Spread the loveBy Xavier Sanchez Correspondent High school boys basketball does not stop in March and pick back up in late autumn. For many players, playing hoops is a year-round commitment. AAU ball is a big reason for, that there are summer camps, shootouts or other events at most schools during the summer. The…
Dog lovers to celebrate ‘Fur of July’
Spread the love. By Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . I’m starting out with some fun news. The West Lawn Dog Park Advisory Council will be hosting a Fur of July Pet Parade on Saturday, June 29 from 10:30 a.m. to 12:30 p.m. at West Lawn…
Fourth of July not happy for everyone
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . Happy Fourth of July. Cannot believe I am already saying that, time sure goes. Hope it is safe and quiet for everyone and especially all of our house pets. For us its shutting…