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IL: TRS ‘not crying’ over latest .76-percent investment return

By   /   October 25, 2012  /   News  /   1 Comment

Illinois’ Teachers Retirement System had a .76-percent investment rate of return during the 2012 fiscal year.

By Jayette Bolinski | Illinois Watchdog

SPRINGFIELD — A dismal return on investments in Illinois’ Teachers’ Retirement System last year is a signal it’s time for changes in how the system operates, one observer said Thursday.

The system’s investments earned a .76 percent rate of return in fiscal 2012, compared to a 23.6 percent rate of return the previous year, according to an update from TRS Thursday.

TRS officials played up the system’s long-term investment performance, as opposed to focusing on the latest return.

“We will always take a long-term view of investment returns because TRS has to be there for our members for decades to come,” said Dick Ingram, executive director of the system. “We didn’t do handsprings over 23.6 percent last year, and we aren’t crying over .76 percent this year.”

But the latest return should be cause for panic, said Ted Dabrowski, vice president of policy at the Illinois Policy Institute, a right-leaning think tank based in Chicago. Furthermore, he said, it could contribute to TRS asking taxpayers to foot more of the bill for a system that is “woefully underfunded.”

“I think the bottom line is that the current arrangement we have is not an appropriate one for either the retirees who are counting on broken promises, or for the taxpayers who have to keep footing the bill when the pension system is underfunded,” Dabrowski said.

“It’s time for fundamental reform, and that means moving toward a system that has a stronger defined contribution, much like the 401k in the private sector.”

In September, TRS reduced its long-term investment return target to 8 percent, from 8.5 percent. The system’s investments earned 9.3 percent during the 30-year period that ended in 2011.

Ingram noted that the latest .76 percent rate of return is in line with investment returns for the same period by other large public pension systems across the country, including the California Public Employees’ Retirement System, which had a 1 percent return, and Maryland State Retirement and Pension System, which had a .36 percent return.

Illinois’ Teachers’ Retirement System is the 39th largest pension system in the country. It has 366,000 members and assets of $36.3 billion as of June 30.

“Every single time these systems fail to meet their returns, all they do is turn around and ask for higher contributions from the state to make up the difference. And taxpayers are tapped out,” Dabrowski said.

Contact Jayette Bolinski at [email protected]. Find Illinois Watchdog on Facebook and follow us on Twitter @ilwatchdog.


Jayette formerly served as staff reporter for Watchdog.org.

  • Kathleen

    Yes, taxpayers are tapped out! My property tax bill to our school district alone is $6,000 per year plus an additonal $6,000 that goes to our city…yes, that’s $12,000 property taxes to live in our house that is worth a whole lot less than we paid for it. Every year were asked to pay more for a system that is failing, with dismal schools, crappy roads, reduced library hours, reduced street lights all because our money is going to feed the pension beast and leaving no money to improve city services for all! This system is broken, and unaffordable and the sooner everyone realizes this, the better. Why is okay that millions of people have to accept the fact that their social security and medicare have to be reduced, but to ask the same from the bloated union worker is nearly treason. We’re all making personal sacrifices that benefit a small portion of our population. We can’t afford it anymore…..seriously, this has to change!!!!!!!