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When legislators return to Springfield next week, they’ll again be considering the knotty problem of whether to consolidate the roughly 650 suburban and downstate police and fire municipal pension funds.

Assuming the financial projections are correct — that’s a major assumption — it’ a smart financial move. Plan proponents contend the funds are losing $1 million a day under their un-weildy administrative formats and could generate an additional $850 million to $2.5 billion over five years if consolidated into two funds. (The additional revenue would come from administrative savings and investment gains.)

A Chicago-based pension analyst has raised serious questions about the proposal. But the big dollars are eye-catching by normal standards.

Unfortunately, in the context of taxpayer spending in Illinois on public pensions, the dollars are relatively insignificant.

So what legislators really will be doing re the fire and police pensions is figuring out if, how and when to re-arrange the deck chairs on the state’s pension Titanic.

Many people don’t want to hear it, but Illinois’ pension woes — despite record contributions by taxpayers — just keep getting worse.

The state’s five public pension funds — state employees, teachers, legislators, university employees and legislators — recently submitted state funding requirement reports that seek $9.8 billion in contributions out of what is expected to be a roughly $40 billion budget for the 2020-21 budget year.

That figure represents a $400 million increase from the current budget.

The Teachers Retirement System says it needs $5.1 billion, the State Universities Retirement System, $2 billion, the State Employees Retirement System $2.4 billion, the Judicial Retirement System, $149 million and the General Assembly Retirement System, $27 million.

That’s the bad news. Here’s the worse news.

If the state contributed what is actuarially required, the bill would be even higher.

For example, TRS executive director Richard Ingram submitted two figures — $5.1 billion “based on Illinois statute” and $8.3 billion “based on TRS board actuarial funding policy.” In other words, what the state is being asked to contribute is $3.2 billion short of what’s really needed.

That means that overall pension under-funding will continue to increase even as the state makes huge contribution to its pension funds.

Current unfunded pension liabilities for the five funds have risen this year to about $137 billion from roughly $134 billion. If the public pensions were required to abide by financial rules imposed on private-sector pensions, the total under-funding would be more than $250 billion.

The five funds are in various degrees of poor health. They average about 40 percent funding, meaning they’re 60 percent short of their total obligations.

SURS is the healthiest of the five, 42 percent funded. The General Assembly pension fund is the least healthy, 12 percent funded.

Financial analysts at Wirepoints characterize the legislators’ pension fund as “broke any way you measure it.”

“Only a yearly bailout by taxpayers keeps that plan afloat,” write Wirepoints analysts Ted Dabrowski and John Klingner.

The state’s huge pension problem, the result of a combination of under-funding and excessive benefits, continues to pose terrible problems for the elected officials who put together the state’s budget. That’s because money for pension is crowding out funds for core state programs.

Gov. J.B. Pritzker last year proposed skipping $800 million in contributions so he could fund other parts of his budget, a class example of short-term gain and long-term pain.

He changed his mind when the state received an unexpected revenue windfall generated by a strong national economy.

But he and legislators will face the same problem again in early 2020, when they begin work on the 2020-21 state budget. If past is prologue, they will continue to preside over a steady increases in pension under-funding.

Unfunded liabilities for Illinois’ five public pensions were $33 billion in 2004, jumped to $54.4 billion in 2008, increased to $97.5 billion in 2013 and stood at $134 billion in 2018.

As under-funding has skyrocketed, so has the pressure of pension costs on the state’s budget, as Wirepoints noted.

“Data from the Commission on Government Forecasting and Accountability shows how pension costs have skyrocketed as a share of the Illinois budget. In 1996, pension costs consumed just 2.9 percent of the state’s general funds. Today they consume nearly 25 percent of the state’s $40 billion general fund budget,” Dabrowski and Klingner write.

That doesn’t mean, of course, that legislators shouldn’t address the fire and police pension issue. But as they, some more than others, labor atop the molehill, they’re ignoring the mountain that’s about to come crashing down on of them.

Jim Dey is a staff writer for The News-Gazette. His email is jdey@news-gazette.com.

Opinions Editor

Jim Dey is a staff writer for The News-Gazette. His email is jdey@news-gazette.com.