Retired Illinois teachers could face pension cuts
April 2, 2012 (CHICAGO) (WLS) -- Illinois' financial troubles could threaten pension benefits for teachers who have already retired.
The warning comes from the person who is in charge of the Illinois teachers' retirement system.
The head of the Illinois teacher's retirement system says there was no one factor that prompted him to sound the alarm. His warnings of a possible reduction in his members' benefits -- as well as the revelation that his fund could go broke in 15 years -- come as the state continues to grapple with its own finances and the issue of pension reform.
Monday afternoon, retired Chicago teacher Douglas Martin wondered, is his pension safe?
"I'm not sure what's going to happen during my lifetime," said Martin. "I'm very concerned for future retirees."
Although Martin has been told his pension administered by the Chicago teachers' pension fund is fine, he and other retirees were left unnerved by a warning from the director of a downstate teachers' pension that financial trouble was ahead.
According to published reports, the head of the Illinois teachers retirement system wrote in a February 9memo to his board that pension benefits to their retirees may have to be reduced and the system could become insolvent in 15 years.
The state owes Illinois' largest pension system $43 billion.
"We need to have guaranteed funding," said Illinois teachers' retirement system director Dick Ingram said via telephone. "That has never been the norm in Illinois but is the norm in other states."
Most agree the state's growing unpaid bills, soaring Medicaid costs, and the $85 billion in overall unfunded pension liability doesn't help.
"I don't know where the pension system is all going to go. I'm kind of dependent on the legislature to see where it's at," said Illinois Comptroller Judy Baar Topinka.
"We have to have a better budget," said Illinois Governor Pat Quinn. "The only way we're gonna do so is Medicaid restructuring and stabilization and strengthening of the pension systems."
But John Tillman of the Illinois Policy Institute says comprehensive pension reform must happen.
"The bottom line is this: Unless you reform public employee pensions, teachers and everybody, all in, for current employees going forward, nothing will fix the problem," said Tillman.
The issue of pension funding remains a concern especially for Robert Bures and the retired Chicago teachers his organization represents.
"We are very concerned that the board of education will pay its share into the pension fund. They have not been doing so," said Bures, who represents the Retired Teachers Association of Chicago.
But, for retired special ed teacher Lyneth Nesbit, it's simple. She just doesn't want to lose what she has worked so hard for.
"Now you are saying we're gonna take away from you. So it's not gonna be fair. I think it's deplorable," Nesbit said.
Some teachers who have contacted ABC 7 say they pay for all or a portion of their health care costs. They say that can be very expensive.
There are also other concerns that if there are no real reforms made pension payments will outpace school funding, making it difficult for educators to fund districts and hire qualified teachers.
illinois news, evelyn holmes
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