‘New reality’ on teachers’ pensions

In recent days news reports have circulated throughout Illinois claiming that I am calling for changes in the benefits currently received by retired teachers. I understand the confusion and frustration these reports have created.

Neither I nor Teachers’ Retirement System is proposing any changes in member benefits, especially a reduction in the current annual cost-of-living adjustment. All of us at TRS are working to educate our members and the general public about a “new reality” in state government that throws the long-term financial viability of the system into serious doubt. It is not our role at TRS to suggest a solution to this problem.

In February, I informed the system’s board of trustees that TRS can no longer be confident that the General Assembly will appropriate all of the money to TRS that is required by law. The state of Illinois’ growing budget deficit and the system’s $43 billion unfunded liability together are causing this “new reality” at TRS. If the General Assembly does not continue to provide all of the funding called for in state law, actuaries says that the system could become insolvent as soon as 2030. But as long as the state makes its payments, TRS can “tread water” indefinitely and be viable well into the future.

I have outlined possible areas where lawmakers may look for a solution. There are only a few options available and none is pleasant — changes in the cost of living adjustment or in member contributions, changes in retirement age and in the benefit formula, and increased revenues through new taxes.

Yes, the message from TRS about the future has changed. While we don’t welcome this new reality, we believe that it is best to tell the truth to our 362,000 members.

Dick Ingram

Executive director

Teachers’ Retirement System