The pension programs for Illinois employees, state university workers, judges, legislators and educators outside Chicago fell $3.8 billion further in debt.
According to a report from the state legislature’s Commission on Government Forecasting and Accountability:
The unfunded liability grew to $137.3 billion during FY 2019, largely due to the continued actuarially insufficient State contributions and lower-than-expected investment returns. Actuarial gains from SERS members who elected to participate in the pension buyout plans and net actuarial gains reported by two systems, SERS and GARS, helped offset the cumulative actuarial loss of the five Systems combined.
The debt is about $500 million more than the commission estimated in April.
Illinois legislators have routinely ignored the funding targets.
While I support the constitutional change to a fair tax system, based on their past record it is unlikely that legislators will change their practice of diverting pension funding to other expenditures.
JB Pritzker signed off on pension buyout programs intended to reduce long-term costs.
He didn’t explain why there would be enough members of the system willing to fall for this bogus plan to save significant change.
The buyouts allow future retirees to cash out their pensions at a percentage of the anticipated total cost, or new retirees can get a lump-sum payment that reduces the annual cost-of-living increase.
Those choosing a buyout would give up a life-time yearly 3% compounded increase.
A spokesman for the Teachers’ Retirement System, said the state expected participation of about 25%, but only about 16% of new retirees participate.
Given the current situation my theory is that Springfield legislators are simply waiting for Tier I teachers to die.
The Daily Herald reports that “the backsliding resulted from factors including earning $1 billion less than projected on investments, spending $600 million extra because pensioners are living longer, and the state contributing $2.7 billion less than needed to catch up on funding.”
One factor in reducing return on investments is that the systems have less to invest because, well, they’re 70% unfunded.
As for retirees living longer?
Yep. Still here.
Fred Klonsky 
This is like buying Long Term Health Care Insurance today–more expensive & capped (at 2 years, I think), because we are living too long.
The Daily Herald failed to mention that 76% of the state’s contribution of over $8 billion is a partial payment for what they owe. And I can tell you that our actuaries used current actuarial charts
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