“In a recent column [in the Chicago Tribune], Kristen McQueary listed a few instances where controversial decisions by Illinois’ elected officials have directly shaped the fiscal despair of state and city governments. However, she did not fully explain one example.
“Concerning public pensions for teachers and government employees, she noted that officials ‘watched as liabilities in their own employee pension funds rose, even as the statutorily required payments were made.’
“For decades, state and local governments have relied on ‘Illinois math,’ not ‘actuarial math,’ to calculate the amount of money they need each year for public employee pension funds. Illinois math is set in state statute and is designed purposely to shortchange the pension systems so money can be directed to other budget priorities.
“As required, Teachers’ Retirement System used Illinois math to calculate the state’s contribution for fiscal year 2018 and came up with $4.56 billion. Using actuarial math, TRS also calculated that the state’s ‘full funding’ contribution should be $6.88 billion.
“This legal sleight-of-hand has been going on for 78 years — and counting. The deliberate and chronic underfunding of TRS since 1939 is the major reason the system carries an unfunded liability of $71 billion — one of the largest debts of its kind in the country.
“That consistent underfunding is also the reason that 80 percent of this year’s $4.56 billion contribution to TRS, or $3.7 billion, constitutes a payment on the unfunded liability. That eclipses the actual cost of teacher pensions for the year: $923 million.”
— Dick Ingram, Executive Director, Teachers’ Retirement System