Lake Zurich Dist. 95 pension costs in audit draw attention
While an annual financial report shows Lake Zurich Unit District 95 has about a $238 million share of what must be paid into a pension fund for retired teachers, officials say the number is only used to illustrate a point.
It's the first year of new financial reporting standards for local governments as recommended by a national organization. Under the new guidelines, the Teachers' Retirement System is required under state law to provide a dollar amount for informational purposes that represents each school district's share of pension liability.
"The goal of the new standard is to present as much information as possible to the public about what the 'costs' of a public pension system are to each local government," Teachers' Retirement System spokesman Dave Urbanek said Wednesday. "But since the school districts don't pay the amount that's reported, it's really a phantom number."
District 95's roughly $238 million share of the Teachers' Retirement System's overall $61 billion net pension liability is listed in an annual audit that was discussed at a school board meeting last week. Certified public accountant Shelly Casella-Dercole noted the figure during a presentation of an annual audit to the school board.
Board President Doug Goldberg called the $238 million a "shocking" figure to see.
Another school board member, Scott McConnell, said the total illustrates how valuable the pensions are to the retired instructors. "Something no one in the private sector has anymore," he added.
Urbanek said school systems are receiving the pension liability figures this year because of audit changes recommended by the Government Accounting Standards Board.
Based in Connecticut, the organization sets accounting and financial reporting standards for state and local governments in the United States.
Urbanek said TRS is set up so state government -- not a school district -- pays the lion's share of annual employer contributions to the retirement agency. Because Illinois government created TRS and the law requires all teachers outside of Chicago to be members, he said, the state accepted the role of paying the majority of the school districts' share of the pension costs.