Illinois' already strained bank account will be stretched by another 4 and a half billion dollars, because of action taken by the state government's largest pension fund. There were warnings this was coming. But now, the harsh numbers are reality.
Trustees of Illinois public school teachers' retirement system say the state will need to put more money into its fund next year… 14.5% more. The Teachers Retirement System, or TRS, says even that falls short of what Illinois should contribute were it to follow actuaries' recommended best practices. A news release says Illinois should actually be paying close to 7 billion dollars.
TRS director Dick Ingram says Illinois is "reaping what it sowed." For decades, politicians spent money that was supposed to be invested in pensions on other, more temporary needs. The annual contribution is rising so significantly now in part because TRS reduced how much it expects to make off its investments.
Other pension systems, like those that cover state government employees and public university professors, are also lowering their projected rates of return. Illinois has little room to reduce its pension costs, as the state constitution protects earned retirement benefits.