TRS welcomes additional review

TRS welcomes additional review

Recently Gov. Pat Quinn signed a law that creates the position of “state actuary” to provide insight to the General Assembly regarding the complicated calculation of how much taxpayers must pay each year to support public pensions. The state’s largest public pension fund, Teachers’ Retirement System, welcomes the addition of this new level of review to our work. An independent double-check that compliments the existing reviews will only help increase public confidence in the way pensions are funded in Illinois.

We already have begun discussions with the Auditor General’s office about how we can assist them in carrying out this new responsibility. This law will complement our long-standing practice of sharing the numbers, estimates, assumptions and calculations used by TRS with the General Assembly’s Commission on Government Forecasting and Accountability, which also employs an actuary to review our work. In addition, we follow state law and share our data annually with the state Department of Insurance for review.

Finally, the auditor general’s office has many times requested and reviewed TRS actuarial calculations during its annual audit of the System’s finances. These regular reviews have never uncovered any problem in the development of our actuarial assumptions. The data used by TRS to determine pension costs, such as mortality tables, is revised every five years, was last changed in 2007 and is currently under review. The system’s assumed rate of investment return is also covered by this review. The current target rate of return, 8.5 percent, has proved accurate. Over the last 30 years, the actual TRS rate of return is 9.3 percent.

TRS is in full support of any effort that will further improve the public and General Assembly’s understanding of the actuarial realities underpinning the System.

Dick Ingram

Executive director

Teachers’ Retirement System of the State of Illinois