2014 readers choice results
Article posted: 12/2/2012 4:40 AM

Legislature must address pensions

text size: AAA

Once again Illinois General Assembly members profited by pandering to their constituents, ignoring the state pension plan debacle and getting re-elected.

Now the truth comes out. The Wall Street Journal recently reported Illinois' abysmal pension investments earnings. In fiscal 2012, the Teachers' Retirement System had a 0.76-percent return and the State Employees Retirement System earned a measly 0.05 percent. Worse yet, the General Assembly Retirement System had a negative 0.14-percent return. The pension plans assume investments would yield an 8-percent return to help fund defined benefit pension obligations.

Advertisement

The state estimates unfunded pensions at $95 billion based on the 8-percent assumption. Any shortfalls eventually have to be made up with larger contributions from taxpayers, or unions and participants need to agree to contribute considerably more. Participants should also be demanding pension boards and fund managers be accountable for their investment incompetency.

Like the foolish assumption of an 8-percent return rather than a more realistic 4- to 5-percent return, some voters and plan participants apparently are assuming the politicians will finally get around to making some structural changes like converting to a define-contribution plan. However, there is no evidence the Democratically-controlled legislature will turn their back on their union buddies.

If the General Assembly during the lame duck session chooses to continue to abdicate their fiduciary role to maintain financially viable state pension plans, the plans could become "unfixable" and insolvent. Some participants and politicians may be so delusional as to think the feds will bail out Illinois. While marijuana is illegal in Illinois, you have to ask yourself what are they smoking in Springfield?

Mike Tennis

Sleepy Hollow

Comments ()
We are now using Facebook comments to offer a more inclusive, social and constructive discussion. Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.

This article filed under

Latest Video

MostViewed

Today
Yesterday
Most Commented
Top Jobs

    View all Top Jobs Place a job ad

    MarketsReport

    DHExtras

       
    • Newspaper next section - Newspaper next section Report card checker - report card checker
    • Dh innovation award 2 - Dh innovation award 2 Zillow /real estate page
    • Discuss refer On Guard series
    • Newspaper archives -- Monday or anyday Mike North

    FacebookActivity

    BusinessDirectory

    Connect with a business or service in your area fast. First select a town, then enter a search term or choose one of the listed popular searches:

    Don't see your town listed? Visit our full directory to begin your search.