Illinois pension funds to get $25 million from Goldman Sachs settlement

Illinois' pension funds will receive $25 million from Goldman Sachs Group Inc. as part of a $5.06 billion national settlement over allegedly misrepresented mortgage-backed securities.

Of the $25 million, roughly $23.8 million will go to the $42.3 billion Illinois Teachers' Retirement System, Springfield; $737,500 to the $14.6 billion Illinois State Board of Investment, Chicago, which oversees the State Employees' Retirement System, General Assembly Retirement System and Judges' Retirement System; and $472,500 to the $15.9 billion Illinois State Universities Retirement System, Champaign; Illinois Attorney General Lisa Madigan announced in a news release Monday.

Illinois will also receive $16 million in consumer relief.

Goldman Sachs announced the national settlement agreement Monday, resolving claims relating to its securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007.

As proposed in January, Goldman Sachs will pay a $2.39 billion civil penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief.

“We are pleased to put these legacy matters behind us. Since the financial crisis, we have taken a number of significant steps to strengthen our culture, reinforce our commitment to our clients, and ensure our governance oversight and processes are robust,” said Lloyd Blankfein, Goldman Sachs chairman and CEO, in a company news release.

A Goldman Sachs spokesman did not have further comments beyond the firm's news release.

Meaghan Kilroy writes for Pensions & Investments, a sister publication of Business Insurance.