Illinois ranked last in unfunded liabilities; creates position to oversee pensions

By Maggie Vespa

June 18, 2012 Updated Jun 18, 2012 at 10:18 PM CDT

This may not come as a shock to you. A new study ranks Illinois dead last out of all 50 states, in unfunded pension liabilities.

Experts say that gap is growing, meaning for lawmakers in Springfield, so is the pressure.

It's true, Illinois is not the only state in the US with pension woes.

"Pensions are the larger problems facing states, and states have fallen short in paying for this by about $757 billion," said David Draine of the Pew Research Center. "While retiree health benefits are a smaller bill, states have woefully under funded this obligation, falling short by $627 billion."

But while the Land of Lincoln has company, experts say it also needs to have perspective.

A study released Monday by the Pew Center ranks Illinois, again, dead last in the U.S. with only enough funding for 45% of its existing $139 billion in liabilities.

Second-to-last place goes to Rhode Island, with 49%. However lawmakers there, unlike those here, have since passed sweeping pension reform legislation.

While it's not exactly news in Springfield, experts say the call to action is getting louder.

"I'm impatient our members can't come to a meeting of the minds," said Governor Pat Quinn.

Nearly three weeks after the last legislative session ended, Governor Pat Quinn monday signed into law Senate Bill 179.

It creates the position for a state actuary, whose job it will be to oversee the state's five pension systems, including those for teachers, judges and other state employees.

"All this does is to say 'Let's have a second pair of eyes have a look over the shoulder of the actuaries for the system, to make sure their assumptions are sound, to make sure their numbers are right,'" said Illinois House Majority Leader Rep. Barbara Flynn Currie (D).

A pair of eyes that, experts say, is needed. A recent report by Pensions & Investments magazine called the Teacher's fund alone, the fourth riskiest investment portfolio in the U.S.

Quinn Monday called the bill a first step of many.

And with retirees, employees and credit agencies alike watching, he hopes the next step comes soon.

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