The Teachers’ Retirement System (TRS) recently readjusted its view of expected rates of return on its investment portfolio.
“The lower expected rate of return from 8.5 percent to 8 percent is more realistic given the condition of our national economy,” said Sen. Kyle McCarter.
The lower expected rate of return has implications for state taxpayers. It means that more money, about $300 million, will have to be diverted from other parts of the state budget in order to keep required pension payments at their proper level.
“This is a crisis that not only affects us today but our children and grandchildren well into the future. We are on an unsustainable course and pension reforms that protect the integrity of the pension systems and protect the taxpayers who pay the bills must be implemented.”
Illinois’ pension problems caught the attention of the respected Wall Street Journal. According to the WSJ editors: “Sooner or later, we knew it would come to this since the Democrats who are running Illinois into the ground can’t bring themselves to oppose union demands. Illinois now has some $8 billion in current debts outstanding and taxpayers are on the hook for more than $200 billion in unfunded retirement costs for government workers. By some estimates, the system could be the first in the nation to go broke, as early as 2018.”
The entire Wall Street Journal report can be found online at http://online.wsj.com/article/SB10000872396390444032404578008291279754994.html