Officials with the Teacher’s Retirement System made a decision today that could add another $421 million to Illinois’ annual pension costs.
After more than an hour of listening to actuaries explain why the teacher pension fund isn’t earning as much off its investments as it used to, TRS board member Andrew Hirshman tried explaining it using medical terms instead of math.
He compared the pension plan to a patient who hears from three doctors (or financial advisors) to cut back on the number of cigarettes -- or in pension terms, reduce the expected rate of return by at least a half a percentage point.
Hirshman: "And on top of that … the state actuary is saying please make these changes. So now it’s like the surgeon general. It’s like at some point smoking is dangerous for your health! (laughter)”
It’s possible that the General Assembly will find some way to override the board’s recommendation. As TRS director Dick Ingram said, In Illinois, “political science has always trumped actuarial science."
