Teachers’ Retirement System investment return, funded ratio over the past 13 years

Kevin Hoffman
Sep 3, 2014

Illinois’ Teachers’ Retirement System (TRS), the largest of the state’s five pension funds, saw an impressive 18 percent return on investment in fiscal year 2014.While this is great news for the retirement system, which has an assumed annual investment return rate of 8 percent, TRS Executive Director Dick Ingram cautioned that investing its way out of billions of dollars in unfunded pension liabilities is simply not feasible.The last time the fund’s return topped 18 percent was in 2011, and TRS has had an investment return higher than 18 percent only three times in 13 years, according to previous comprehensive annual financial reports published. Have a look at investment return and funded ratio data dating back to 2001.

[Note: Funded ratio for fiscal year 2014 is not available.]

The comprehensive annual financial report for fiscal year 2014, along with the funded ratio percentage, won’t be released until January 2015 as it is a six-month process, said TRS Spokesman Dave Urbanek.

Though the retirement system’s investment news is undeniably uplifting, the conservative-leaning Washington Times cited a report by Open the Books that shows a 24 percent increase in the number of TRS retirees receiving six-figure annual pension payouts.

If the [TRS] had to pay out all of its pensions today, it could only afford to give its members 40 cents on the dollar.

Yet the number of six-figure pensions TRS has been doling out has increased 24 percent this year compared to last, with about 6,000 retired educators collecting more than $100,000 annually, according to records obtained by Open the Books, an online aggregator of local spending that tracks educator salaries, pensions and vendor spending.

The group’s Labor Day report found more than 100,000 retired Illinois educators had been paid back what they invested into the system just 20 months after leaving work, a financial burden linked to union collective bargaining, which can cost taxpayers $2 million or more per teacher over the course of retirement.

“For most school districts pension payments are one of the top five annual expenses,” said Adam Andrzejewski, founder of Open the Books. “Are we going to educate children or provide lavish lifetime benefits for administrators and teachers? There’s not enough taxpayer money to do both.”

Without reform, TRS’s pension plan could go bust by 2029, the fund’s executive director Dick Ingram told The State Journal-Register back in 2012.

 

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