• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Daily News Chicago

The Chicagoland's Top Daily News Source

DAILY NEWS CHICAGO
The Chicagoland's Top Daily News Source

  • Home
  • LOCAL NEWS
  • BUSINESS
  • POLITICS
  • REAL ESTATE
  • MEET THE TEAM

Illinois pension liability shrinks for first time in years: Crain’s Juice

December 9, 2021 by Marita Overfelt

Are you ready for a little good news, Illinois?

It may be a fluke more than a turning point. There’s no sign it’s a trend, at least not yet. But just in time for Christmas, the state of Illinois is reporting that it actually has significantly reduced its unfunded pension liability—the first such progress in many, many years.

The progress comes in a new report from the Illinois Commission on Government Forecasting & Accountability, which serves as the Legislature’s fiscal research arm.

In a “special pension briefing” released yesterday, it said unfunded liability in the five state pension systems that cover university employees, state workers, and most teachers outside of Chicago shrank by a hefty $14.2 billion in the fiscal year ended June 30, dropping from $144.2 billion last year to $130 billion now.

The only other even comparable drop in recent decades was from fiscal 2010 to 2011, but the decline was less than half as much on a percentage basis.

The improved figures were enough to bump up the state’s funded ratio of pension assets to liabilities to 46.5%, still way short of the 90% goal but the highest it’s been since 2008.

Now, before Springfield goes hog wild and starts spending more money we don’t have, there are a few codicils worth mentioning.

Subscribe to Crain’s for $3.25 a week

One, the COGFA figures are based on the market value of pension-fund assets. In other words, they’re not blended or otherwise averaged over five years, as often is the case with such reporting.

Caveat two is that, just like almost any other investor with half a brain, the state funds enjoyed “exceptional” returns on invested capital in fiscal 2021, earning 22.9% to 25.2%. That’s way, way above their assumed rate or return of 6.5% to 7%.

Beyond that, some years in the recent past had unusual bumps, making the new figures look relatively good in comparison. And even with the booming return on investment, the state still is contributing roughly $2 billion a year less than the amount it is actuarially required to reach its eventual full funding.

Ergo, concludes Civic Federation President Lauarence Msall, the new COGFA figures “are not a trend. It’s a data point in the market.”

He continues, “It’s not bad news. But it’s only one data point.”

True and true. But for a state desperate to stop underfunding education, public safety and other programs because underfunded pension systems are sucking up every loose penny, it sure ain’t bad news, either.

Look to hear Gov. J.B. Pritzker have lots more to say about these improved figures as he seeks a new term.

Meanwhile … it looks like state Rep. Delia Ramirez, D-Chicago, the chief sponsor of the new law to begin electing members of the Chicago Board of Education, is leaving Springfield.

In a statement, she announced her candidacy for Congress in the new Latino plurality 3rd District on the north side of the metropolitan area. Said Ramirez, “I have a proven track record of building strong and diverse coalitions and this campaign will reflect the people and priorities of the communities in the 3rd District.”

Ramirez is picking up backing from a number of progressive officials, such as state Rep. Will Guzzardi, D-Chicago, and Ald. Carlos Ramirez-Rosa, 35th. Her main opponent, at least for now, is Ald. Gil Villegas, 36th.

Subscribe to Crain’s for $3.25 a week

>>>#ad: Don't Miss Today's BEST Amazon Deals!
Originally Appeared Here

Filed Under: BUSINESS

Primary Sidebar

More to See

Chicago Shooting News Live Updates: Police find man suspected in shooting at Chicago-area parade; six dead, 30 injured

Chicago Shooting News Live: A gunman on a rooftop opened fire on an Independence Day parade in suburban Chicago on Monday, killing at least six people, wounding at least 30 and sending hundreds of … [Read More...] about Chicago Shooting News Live Updates: Police find man suspected in shooting at Chicago-area parade; six dead, 30 injured

Stand out in any market

The real estate industry is beyond crowded — it seems like agents are popping up everywhere and taking aim at your clients. So, how can you cut through all that noise to stand out? You’ve got to … [Read More...] about Stand out in any market

Highland Park parade shooting kills 6, wounds more than 30

Chicago Mayor Lori Lightfoot confirmed to the New York Times that the Chicago Police Department is assisting in the response and investigation.  “Law enforcement is working hard to bring the shooter … [Read More...] about Highland Park parade shooting kills 6, wounds more than 30

Privacy Policy | Terms and Conditions | About/ Contact
As an Amazon Associate I earn from qualifying purchases.
Copyright © 2022 · Daily News Chicago . Log in