The director of the Illinois Teachers Retirement System warns that financial troubles are so great it could be forced to consider reducing pension benefits to teachers who have already retired, according to a newspaper report Sunday.
The (Springfield) State Journal-Register ( http://bit.ly/HyuHQj) reported Saturday that it obtained a confidential memo written by Dick Ingram warning of the politically explosive possibility of whittling away pensions not just for future retirees but for those who have already left work.
In the Feb. 9 memo to his board, Ingram said the state’s largest pension system has been underfunded for decades and that he is no longer confident the state will continue to pay it enough money to stay above water. The state owes Ingram’s fund $43 billion.
He cited one forecast that the Teachers Retirement System could be insolvent by 2029.
Ingram said pension funding is under severe threat from the state’s unpaid bills, soaring Medicaid costs and the $85 billion in overall unfunded pension liability, which is expected to rise.
“If that is the case, the only other option available that would significantly change the amount owed is to reduce past service costs for active members and retirees,” Ingram wrote in the memo.
In an interview with the newspaper Friday, Ingram said the state might have to target cost-of-living pension increases, which are currently 3 percent a year and compounded.
“I’m really stuck,” he told the paper. “I have to say that the math is not trueing up with what is constitutional or fair or earned or whatever else.”
Just headlines (Please don’t miss reading #3)
- Italian province offering €15 billion for financial sovereignty
- Greek Foreign-Bond Restructuring Rejected in Talks Last Week
- Ill. pension director suggests cuts for retired (Google news search link for more info)
- Dublin faces revolt over household charge
- ?Spain Record Home Price Drop Seen With Bank Pressure: Mortgages
- QE helps double FTSE 100 pension deficit to £73bn
- Yen Losing Most Since ’95 Not Enough for Toyota
- Italy’s Jobless Rate Increases to Highest Since 2001
- Euro-Region Unemployment Surges to 14-Year High, Nears Record
- Italians Get Sticker Shock at the Pump