Rock Island Today

The Illinois pension crisis just keeps getting worse.

The Teachers’ Retirement System board voted recently to lower its expectations of the rate of return on its investments from 7.5 percent to 7 percent, following the recommendations of actuaries the system hired. Early estimations indicate that would require the state to shoulder an additional $400 million to $500 million.

The board made a similar move more than two years ago, reducing its return assumption from 8 percent to 7.5 percent. The State Employees’ Retirement System recently reduced its assumptions from to 7 percent, increasing state contributions by $320 million in 2018, the Illinois Policy Institute said.

Brandi McGuire | Photo courtesy of the McGuire Campaign

“The pension crisis is dire,” Brandi McGuire, Republican candidate for the District 72 state House race, told Rock Island Today, adding that the current pension system is unfair to  taxpayers. “(It’s) a mirror of the state's financial crisis."

Gov. Bruce Rauner pressed the board to postpone the decision, saying state contributions would cut into funding for schools, human services and other programs that are already feeling the squeeze.

Annual pension costs make up more than a quarter of the state’s general fund budget, according to data analysis by the Illinois Policy Institute. Twenty years ago, it was approximately 3 percent of the general fund budget. Between 2011 and 2015, state pension debt increased from $83 billion to $111 billion.

Quad Cities voters are concerned about the rising state employee pension debt, McGuire said. She supports moving new public employees to a 401(k)-style plans and said anyone wanting to make the transition, while protecting already-earned benefits, should have the chance to do so.

“State workers deserve the security and control over their own retirement accounts and should not have to pay into a system that may not be there when they retire,” McGuire said. “Furthermore, I believe workers deserve the dignity of flexibility to move from job to job in order to better themselves. The current pension plan … penalizes economic mobility by requiring workers to stay in their jobs or in the same state system.”