Teachers' Retirement System of Illinois Warns Pensions May Have to Be Cut

A Chicago Tribune editorial:

The politicians who run Illinois, along with many pension fund officials and union leaders, have spent years denying that their failure to demand big pension reforms threatens the retirements of public employees. That denial — often an effort to dodge blame — now stands disgraced: With insolvency looming in as little as 17 years, the head of the state's largest pension fund is warning that pension benefits promised to teachers, starting with those already retired, may need to be cut.

In a statement on its website, the Teachers' Retirement System of Illinois warns: "Preventing insolvency may include significant changes for TRS — new revenues must be generated and if they are not, benefits may have to be reduced."

A situation so dire that it threatens benefits to retirees ought to alarm every citizen of Illinois and every public worker who receives or expects to receive a pension. And remember, the $43 billion in unfunded pension obligations that burdens TRS is just one facet of the severe underfunding that officials at state, county and city governments have created for Illinois taxpayers. TRS today is only 46 percent funded; 54 percent of its future financial obligations do not exist.

Just a reminder, the SEC would shut down any S&P 500 company pension plan with numbers like that.