COLLINSVILLE — The executive director of the Teachers’ Retirement System of the State of Illinois will be in Collinsville today – Thursday, Jan. 19 – for a town hall meeting with TRS members regarding pension issues.
The meeting, which is also open to the public, will be at 4:30 p.m. at the Collinsville High School Auditorium, 2201 S. Morrison Ave.
The meeting is one in a series of similar forums in January and February led by Dick Ingram, who directs the system that provides pensions for teachers, administrators and other public school workers outside of Chicago. As the 37th largest pension system in the nation, TRS has 406,855 members and assets of $45.7 billion as of Sept. 30, according to a news release.
Currently, TRS is “treading water,” David Urbanek, communications director for system, told the Record.
He said Ingram’s presentation will spend ample time discussing the current state of the fund, including “the main reason Teachers' Retirement System has carried an unfunded liability for more than 75 years: decades of inadequate financial support from state government.”
He added: “In the last 10 years alone, state government has allocated a total amount of money to TRS that is $6 billion less than what actuaries say TRS should have been paid to be fully funded.”
Urbanek went on to say that TRS has always paid benefits, despite being underfunded.
“Just like someone with a home mortgage, we don't have all of the money on hand to pay off all benefits we owe for the next 30 years to all 406,000 TRS members,” he said. “But with $45 billion in assets, we have enough money to keep meeting the system's benefit payments for many years.”
The state’s pension debt has long been a subject of debate.
In March 2016, the Illinois General Assembly’s Personnel & Pensions Committee considered two bills aimed at reducing the state’s unfunded pension obligations by creating buyout options for members of various state pension systems. Ingram testified at a committee hearing, where he said TRS pays about $6 billion in annual benefits. He said the fund was only 42 percent funded at the time.
“Using our current fiscal position as a starting point, we will likely find that any buyouts will have minimal impact on the $108 billion liability that already exists at TRS, which is the problem that we are all concerned with today,” he told the committee on March 10, according to a TRS news release. “Increases in our liabilities that accrue in the future may be reduced by these proposals, but you won’t see any significant relief for the unfunded burden on the books today. In fact, buyouts may actually serve to accelerate the state’s pension obligations, albeit at a reduced rate.”
In August, TRS lowered its assumption of future investment returns to 7 percent – down from 7.5 percent. Lowering the assumption puts more of a burden on taxpayers, according to the Illinois Policy Institute, a public policy think tank, which reported that the change would add $421 million to the state’s pension obligation in 2017.