(The Center Square) – Representatives from the state’s five pension systems testified to lawmakers over the past few weeks with updates on their unfunded liabilities, leaving lawmakers to come up with a fix.
The state’s unfunded public pension liability reached more than $140 billion in 2022 by the state’s estimate, though others say it is significantly higher.
Last week, the Illinois House Personnel and Pensions Committee met virtually with Illinois Teachers’ Retirement System representatives to get an update on the pension fund.
TRS currently has a total unfunded pension liability of $80.6 billion among two different tiers of employees. Tier 1 is for those who entered TRS before 2011, and Tier 2, with fewer benefits, is for those hired after 2011.
On Thursday, representatives of the State Employee Retirement System discussed their unfunded liability and said that about 80% of their contributions go toward paying down that obligation. The most recent audit for the fiscal year that ended June 30, 2021, shows SERS with a $33.1 billion unfunded liability, a funding ratio of 41.9%.
State Rep. Steven Reick, R-Woodstock, who has been in these meetings, said the state needs to take a new approach to deal with the unfunded pension liabilities.
“If what we are going to do is continue along the lines that we have been on for the last 27 years, then I honestly do not see a situation in which we will be able to fund state government to the extent we want to,” Reick told The Center Square.
Gov. J.B. Pritzker introduced his budget proposal on Wednesday and said he plans $200 million more than the statutorily required contribution of $9.8 billion for pensions, for a total of $10 billion. Pritzker’s annual budget proposal spends nearly $50 billion in total for the fiscal year that begins July 1.
Reick said too much money is going elsewhere.
“I am grateful that he found $200 million to put in our pension plans, over and above what we are supposed to be putting in under the ramp. It would have been nicer if he considered putting a lot more in,” Reick said. “I mean, we all want better education, we all want better health care, we all want better human services and social programs, but we also have a huge hole in our budget that was brought about by pensions.”
The budget proposal will now be negotiated and must be approved by the 103rd General Assembly.
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February 16, 2023 at 10:33PM