A dismal return on investments in Illinois’ Teachers’ Retirement System last year is a signal it’s time for changes in how the system operates, one observer said Thursday. The system’s investments earned a .76 percent rate of return in fiscal 2012, compared to a 23.6 percent rate of return the previous year, according to an update from TRS Thursday.
“We didn’t do handsprings over 23.6 percent last year, and we aren’t crying over .76 percent this year," said said Dick Ingram, executive director of the system who favored taking a long-term view. But the latest return should be cause for panic, said Ted Dabrowski, vice president of policy at the Illinois Policy Institute, a right-leaning think tank based in Chicago. “I think the bottom line is that the current arrangement we have is not an appropriate one for either the retirees who are counting on broken promises, or for the taxpayers who have to keep footing the bill when the pension system is underfunded,” Dabrowski said.
In September, TRS reduced its long-term investment return target to 8 percent, from 8.5 percent. The system’s investments earned 9.3 percent during the 30-year period that ended in 2011.
“Every single time these systems fail to meet their returns, all they do is turn around and ask for higher contributions from the state to make up the difference. And taxpayers are tapped out,” Dabrowski said.
You can read Jayette's full report at: http://watchdog.org/60347/il-trs-not-crying-over-latest-76-percent-investment-return/
1 comment:
If the state had been paying their share, it hasn't since 1953, there would not be a problem.
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