Leadership Matters December 2013

Clark, legislators discuss ‘Long Road to Pension Reform’  Leaders call legislators back to Springfield for special session

TRS was paying out $2.1 billion per year in benefits in 2004, but will pay out almost $5 billion this year. He said TRS took in $8.3 billion last year. Ingram noted yet another cautionary item, saying that in the near future retired members may exceed active members. Biss and Senger both said the 10-person conference committee got very close to an agreement on pension reform, but then punted the issue to the four legislative leaders when the group could not quite close the deal. “We have talked this issue to death and we have screamed this issue to death. It’s time to pass a bill,” Biss said. “I am cautiously optimistic, generally pessimistic, but hopeful.” Much like the original SB 1, the new SB 1 decimates the cost-of-living adjustment (COLA), raises the retirement age and caps pensionable salary in order to reduce the promised pension benefits by as much as $160 billion over the next 30 years. The COLA represents the biggest single cost (Continued on page 5)

The panel discussion at last week’s Joint Annual Conference in Chicago was titled “The Long Road to Pension Reform.” The topic could not have been more timely with the General Assembly scheduled to return to Springfield on Tuesday (December 3) to tackle the pension issue. The panel on November 22 included two members of the conference committee on pension reform, State Sen. Daniel Biss (D-Evanston) and Rep. Darlene Senger (R-Naperville), who is running for Congress. The panel also included Richard Ingram, executive director of the Teachers’ Retirement System (TRS) and IASA Executive Director Dr. Brent Clark. It was moderated by Ben Schwarm, deputy executive director of the Illinois Association of School Boards (IASB). Ingram gave an overview of the pension issue from the TRS perspective. What was a $19.4 billion TRS unfunded liability 10 years ago has grown to $55 billion because of underfunding by the state. Ingram said the formula should be Contributions (C) plus Investments (I) equals Benefits (B), but that formula now is C + I = B - $55 billion. Ingram said

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