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SPRINGFIELD, Ill.—Illinois Gov. Pat Quinn committed to making a statutory $5.2 billion contribution to the five state retirement systems for fiscal 2013, beginning July 1, according to a proposed budget released Wednesday.
The retirement systems are seeking required contributions of $5.7 billion.
In an address Wednesday on his proposed budget, Gov. Quinn made no mention of funding the systems, said “everything is on the table” for consideration by his special pension group and set an April 27 deadline for a blueprint.
“We need to do pension reform in a way that’s meaningful, constitutional and fair to the employees who have faithfully contributed to the system,” Gov. Quinn said in prepared remarks of his 2013 fiscal year budget speech.
“I want to report everything is on the table for our pension working group: Historical funding practices, employer contributions, employee contributions, the retirement age and the cost of living adjustment,” Gov. Quinn said.
The group, consisting of state senators and representatives Gov. Quinn appointed, is tasked with addressing fiscal issues affecting the state’s retirement systems.
They are the $36 billion Illinois Teachers’ Retirement System, the $13 billion Illinois State Universities Retirement System,; and the three systems whose combined $10.3 billion in assets are overseen by the Chicago-based Illinois State Board of Investment—Illinois State Employees’ Retirement System, Illinois Judges’ Retirement System and Illinois General Assembly Retirement System.
The group has been meeting with officials of organized labor, the retirement systems and others “to see what solutions they can agree on,” said Dave Urbanek, Illinois teachers’ system public information officer. Mr. Urbanek said a move to a defined contribution system was not “on at the top of the list” of changes being considered.
Gov. Quinn’s proposed budget would contribute for the 2013 fiscal year: $2.7 billion to the teachers system, $1.4 billion to the universities system and a combined $1.14 billion to the employees, judges and General Assembly systems.
The systems report their actuarial certified required contributions for the fiscal 2013 are $2.7 billion for the teachers fund, $1.4 billion for the universities fund, $1.57 billion for the employees fund, $88.2 million for the judges fund, and $14.1 million for the General Assembly fund.
All the systems expect the state to pay the full actuarial contribution for the current fiscal year ending June 30—$2.4 billion for the teachers, about $800 million for universities, $1.36 billion for employees, $63 million for judges and $10.5 million for the General Assembly.
“The truth is that over the past 35 years, too many governors and members of the General Assembly have clung to budget fantasies rather than confronting hard realities, especially with respect to pension…investments,” Gov. Quinn said. “Today, our rendezvous with reality has arrived. We must navigate our budget out of past decades of poor fiscal management…We must also stabilize and strengthen our public pension systems once and for all…to prevent them from swallowing up our core programs in education, health care and public safety and to ensure that we can pay all our bills.”
Barry B. Burr is the editorial page editor for Pensions & Investments, a sister publication of Business Insurance.