Pension reform is of great interest to the public, business sector, General Assembly, school boards, and TRS members.¬† Among the public and media throughout the State of Illinois, and those in the General Assembly, there appears to be a common misperception that pension obligations for State employees (and the pension system itself) are main factors in the deteriorating financial condition facing the State.¬† The facts show otherwise.¬†¬†¬† The following information serves to debunk many of the popular myths regarding the condition of the Teachers‚Äô Retirement System (TRS) and its impact on the financial condition of the State of Illinois.
Prior to reviewing the following myths versus facts, we believe it is important the following facts regarding the condition and operation of TRS be stated:
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Current Assets – $37.1 billion
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Revenue in FY 2010 – $6.8 billion
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Benefits to be paid in FY 2012 – $4.5 billion
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† 378,288 TRS members,¬† with 171,000 active members
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Average pension – $46,452
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† A current TRS member contributes 9.4% of his/her salary to TRS
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† TRS has not ever missed a pension payment to any annuitant
‚óè¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† The State of Illinois has not made its required payments to TRS.¬† Thus, TRS has a significant unfunded liability that it has carried since at least 1953
Pension reform in these economic times is worth discussion, but any reform must be done based on ¬†common sense facts and actuarial data.¬† Decisions based on perceptions with out facts of law and actuarial data are at best dangerous , reckless, arbitrary, and capricious.¬† Successful, long-term pension reform requires careful study of facts, actuarial data, and outcomes to avoid unintended consequences that would ultimately cost MORE for the taxpayers of the State of Illinois.