CHICAGO Oct 25 Illinois's Teachers' Retirement
System, the state's biggest public pension fund, said on Friday
that its unfunded liability grew by 7 percent in the latest
fiscal year even as investment returns jumped, driven by chronic
underfunding by the state.
The Teachers' Retirement System (TRS) said its funding gap
rose to $55.73 billion as of June 30, up from $52.08 billion at
the end of fiscal 2012 because the state's pension contributions
continue to fall short of actuarial requirements.
The fund said it had a 12.8 percent return on investments in
"This increase in the system's unfunded liability, even with
good investment results, is another wake-up call to state
officials and our members that TRS long-term finances continue
to head in the wrong direction," the fund's executive director,
Dick Ingram, said in a statement.
TRS gave preliminary approval to a $3.412 billion
contribution for fiscal 2015 using a state statutory formula.
The pension system said that a $5.3 billion contribution would
be needed to keep the unfunded liability from rising further.
Illinois lawmakers have been struggling to address a
collective $100 billion unfunded liability for the state's five
retirement funds that resulted from years of skipping or
skimping on pension payments.
A special legislative panel created in June to address
pension reform did not have a proposed fix ready for lawmakers
to take up in the first half of the General Assembly's fall
session, which took place this week. Lawmakers are to return for
the second half of the session on Nov. 5.
Inaction on pensions has helped hammer the state's credit
ratings to the lowest level among the 50 U.S. states and has
driven up its borrowing costs in the U.S. municipal bond market.
TRS said it has never received a full actuarial contribution
from Illinois since it was created in 1939. TRS, the 39th
largest pension system in the United States, serves 389,900
teachers, administrators and other school personnel and had
assets of $40.97 billion as of Sept. 30.