CHICAGO Nov 21 Illinois' unfunded public
pension liability jumped to $96.8 billion at the end of fiscal
2012, up from $83 billion in fiscal 2011, a state legislative
agency reported on Wednesday, as the state's funded ratio fell
further below levels considered healthy.
The Commission on Government Forecasting and Accountability
attributed the "significant spike" to investment losses by the
five state pension funds, insufficient contributions by the
state and a decision by the largest fund - Teachers' Retirement
System (TRS) - to reduce its long-term assumed investment rate
of return to 8 percent from 8.5 percent.
Illinois' funded ratio for pensions, already the lowest
among states, fell to 39 percent when fiscal 2012 ended on June
30 from 43.3 percent, the commission reported. A funded level of
80 percent is considered healthy.
The biggest factor contributing to unfunded liabilities from
fiscal 1996 to 2012 has been employer contributions, followed by
investment returns, while benefit increases had a smaller
impact, according to the report.
The state has skipped or skimped on pension payments over
the years, while also turning to the sale of pension bonds to
raise money for the payments.
Efforts in the Democrat-controlled Legislature to wring
cost-savings from pension reforms stumbled in May over a plan to
shift the state's payments to TRS, which accounts for $53.5
billion of the unfunded liability, onto local school districts.
A subsequent special legislative session in August to pass
reforms ended in failure, triggering a downgrade of Illinois'
credit rating by Standard & Poor's Ratings Services.
Governor Pat Quinn on Sunday launched a public awareness
campaign featuring a cartoon called Squeezy, the pension python.
The Democratic governor has repeatedly warned that pension
payments, which total over $5 billion in the current fiscal
year, would squeeze out funding for core services such as
education, health and public safety unless the state enacts