Illinois faces a major pension-funding problem. The state's Supreme Court is set to hear a case over whether or not a proposed reform, Senate Bill 1, is constitutional. Reboot Illinois' Madeleine Doubek offers a refresher leading up to opening arguments. Here are three things you should remember when thinking about the state's pension crisis:
1. Illinois faces, conservatively, $110 billion in unfunded pension debts because over many decades Democratic AND Republican administrations and lawmakers skipped pension payments entirely or shorted the funds.
In fact, Eric Madiar, former chief legal counsel to Senate President John Cullerton, wrote back last September that politicians have been shorting pension funds since 1917. Got that? Centuries.
The problems were compounded when recessions hit and it hasn't helped that pension fund managers tend to expect a greater return on fund investments than they have gotten in recent years.
2. Reboot Illinois presented a detailed look at the history of the pension problems in visual form here.
3. We also provided snapshots of the state's pension funds and the people in them that still has some relevant data about the Teachers Retirement Fund, the State University Retirement System, the State Employee Retirement System, the Judges Retirement System (not altered by SB1) and the General Assembly Retirement System.
(Check out five more pension points to keep in mind at Reboot Illinois while you wait for an update from the court.)
Speaking of pensions, local pensions funds also are facing their own liability problems. Some are even worse off than the state's funds. Some municipal pension funds, however, are considered healthily funded -- and even have a surplus.
(See which 25 cities in Illinois have the worst-funded and best-funded police and fire department pension funds at Reboot Illinois.)
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