Thursday, January 30, 2014

“THE SO-CALLED STATE PENSION SYSTEM FUNDING MANDATE IS ILLUSORY” (from the Lawsuit filed by the We Are One Coalition of Illinois on January 28, 2014)

“Public Act 98-0599 purports to require the State to follow a funding schedule that provides an annual contribution, beginning in Fiscal Year 2015, to each of SERS, SURS and TRS (as well as the General Assembly Retirement System and the Judicial Retirement System) that is equal to the sum of the actuarial amount needed to fund each pension system plus that additional amount required to fund by Fiscal Year 2044 100% of each pension system's liabilities. 

In Fiscal Year 2045 and each Fiscal Year thereafter, Public Act 98-0599 directs the State to contribute that amount to each pension system needed to maintain a funding status of 100% of each pension system's liabilities.

“The funding mandate for which Public Act 98-0599 calls, however, is no mandate at all.

“Illinois history is replete with the successive failures of the Illinois General
Assembly and Governor to make payments to the State pensions systems for which Illinois law called. For years, led by successive Governors and members of the General Assembly, including many currently in office, the State has failed to pay an actuarially-sufficient amount to fund its pension systems. All along, the State and its elected officials did so knowing that they were shortchanging the pension systems, cheating Illinois' public servants and violating the public trust.

“In enacting Public Act 98-0599, the General Assembly and Governor Quinn failed to heed the lesson Illinois history teaches with respect to funding the State pension systems. That is, a statutory commitment to adequately fund the State pension systems is no guarantee.

“Public Act 98-0599 is no different. The General Assembly may alter or repeal in the future the funding amounts that Public Act 98-0599 requires…”

For additional commentary, click on the following link: “If the state faces a crisis, it could simply vote to change what the required payment would be...” Representative Elaine Nekritz

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