By Benjamin Yount | Illinois Watchdog
SPRINGFIELD, IL — The head of Illinois’ largest public pension fund is once again warning teachers their pensions could soon disappear.
Dick Ingram, executive director of the Illinois Teachers’ Retirement System, says the retirement system for 390,000 public school teachers in Illinois is spending more money than it’s taking in.
“Without changes to the pension code to ensure sustained and adequate funding, TRS faces the very real possibility that in a few decades the System will not have enough money to pay benefits to retirees,” Ingram wrote in a news release. “We cannot guarantee that TRS will have enough money to pay the pensions promised to every member in the System.”
Illinois’ teacher pension fund is worth $40 billion, but it is also underfunded by $55 billion.
That unfunded liability actually rose $3 billion over the past year, despite TRS seeing a 12.8 percent return on investments.
“TRS cannot invest its way out of the funding hole we are in,” Ingram stated. “This increase in the System’s unfunded liability, even with good investment results, is another wake-up call to state officials and our members that TRS long-term finances continue to head in the wrong direction.”
Lawmakers in the state have been talking about pension reform for years, but the latest effort to fix TRS and the state’s four other systems stalled this summer.
Illinois is scheduled to pay $3.4 billion into the teachers’ pension fund next year, Ingram says.
State Rep. Tom Morrison, R-Palatine, said Ingram’s comments offer evidence that it’s time to end Illinois’ defined benefit pensions, and switch
to 401(k) style retirement plans.
“Moving to a 401(k)-type system locks in all of the pension credits that workers have earned up to today. But starting tomorrow it gives workers the freedom and ability to manage their own money,” Morrison said. “Politicians could not touch their 401(k) plans.”
Illinois five pension systems are a combined $130 billion in debt, but Morrison said teachers and other public employees have been unwilling to accept benefit reductions.
“Teachers and the other state workers are essentially saying to the taxpayers, you’re going to have to pay more,” Morrison said.
Ingram has warned teachers TRS is running out of money, although, Morrison said, retired teachers probably aren’t worried. But anyone in a classroom now should be.
“I don’t think you can say (pensions will disappear) for older workers, but that is a true statement for those in their 20s and 30s and 40s,” Morrison said.
Contact Benjamin Yount at [email protected] and find him on Twitter @BenYount.