After many denials, TRS changes stance on pension viability > Northwest Herald

12 Apr

There’s nothing worse than the nagging feeling that you’ve been duped. So I have to wonder whether that’s how public school teachers in Illinois felt last week when the Teachers’ Retirement System admitted the pension fund could be “insolvent” by 2029.

In defending this announcement, TRS Executive Director Dick Ingram told the State Journal-Register, “I think folks appreciate being spoken to honestly.”

But the reality is TRS has been denying for years that the pension funds are in trouble, despite conclusions made by financial experts across the country. 

In 2010, I spent several months reporting for the Northwest Herald’s award-winning “Broken Benefits” series, which chronicled the state’s pension woes. My research included numerous Freedom of Information Act requests and interviews with TRS’ spokesman Dave Urbanek.

In each of our conversations, Urbanek – though pleasant – cast the unfunded liability as a boogeyman. As long as young teachers pumped money into the system to pay for former teachers’ retirements, he said, the system was safe.

Was there a chance that the unfunded liability would pose a danger to teachers’ retirements?

“Impossible,” Urbanek said.

At the time of my reporting, Northwestern University professor Joshua Rauh predicted that state pension funds could run dry by decade’s end. He proposed benefit reforms that could cut costs and save the systems’ finances. His work gained national attention, but TRS dismissed his research as a hyperbolic “doomsday” scenario.

After Rauh’s research faded from the headlines and the Northwest Herald series was concluded, teachers still were being told there was no pension crisis. In fact, whenever the solvency of the fund was questioned, the TRS press team sprang into action to rebuff any criticism.

In July, a Northwest Herald guest columnist warned that without reform, Illinois soon would find itself in a financial hole too tough to climb out of. (That’s the polite way of saying an $83 billion tsunami is about to hit.)

TRS’ Ingram responded promptly, and defensively, to the column. He accused the writer of trying to “unnecessarily unsettle retired teachers and other public employees into thinking their retirement checks are in danger.”

TRS waged this war of words across the state.

In August, the Rockford Register Star editorialized that Illinois was “a model for how NOT to set up a pension system.” Just like clockwork, Ingram fired off an abrasive response less than a week later.

Ingram said the Register Star’s assessment that the pension funds were in trouble could not be “further from the truth.” In his rebuttal, he cited a Barclay’s report that found “the state’s pension systems [would] be in business for decades beyond 2018” as evidence that there was no reason for concern.

Even at an October town hall event for TRS members in Crystal Lake, Ingram told teachers: “Although we have a serious challenge ahead of us, it’s a manageable challenge … The long term is what matters.”

The list of examples could go on and on, but the bottom line is this: The TRS told me and Northwest Herald readers – many of whom are teachers – there was nothing to worry about. TRS denied the crisis before running the numbers themselves, and attacked the credibility of people who suggested that the pension funds could belly up.

But when their actuaries finally looked at the numbers, they found that the retirement fund that so many in Illinois are counting on could run dry in less than 20 years.

Maybe in political terms, 2029 is far away. Maybe it’s another doomsday date that few legislators still will be around to see, so they don’t understand the urgency for reform.

But to a 45-year-old teacher, 2029 is right around the corner. Last week’s news that the TRS could be insolvent means her pension fund might run out of cash precisely at the time she hopes to retire.

And if that happens, then what will TRS say?

Via After many denials, TRS changes stance on pension viability > Northwest Herald

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