Illinois’ biggest pension fund is being urged by its own consultant to lower its expected return on investments — a step that, if accepted, could force the fund to cut benefits or raise taxpayer contributions even more than lawmakers have been considering. The pension fund, Teachers’ Retirement System, covers Illinois public school teachers outside of Chicago.
Retired Illinois teachers received a collective $900 million bump above their original pension benefits last year. These “cost-of-living adjustments” amounted to 21.3 percent of the $4.2 billion total retirement benefits paid to 101,288 former educators from around the state, officials from the Illinois Teachers’ Retirement System reported. That’s up from 18 percent of the total teacher pension payout just five years ago.
Chicago Mayor Rahm Emanuel visited the state Capitol on Tuesday and testified about his proposal to cut pension costs. He wants to raise the retirement age, make city employees contribute more to their pension funds and halt cost-of-living increases for retirees. He also wants the state to contribute pension money for Chicago teachers, as it does now for other teachers across Illinois. Emanuel says that without these changes, Chicago residents could face a 150 percent increase in taxes.
Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state’s future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, “You won’t recruit a business, you won’t recruit a family to live here.”