The past year has been difficult and frustrating for everyone touched by the public pension debate in Illinois.
On the one hand, there is frustration and anger over the increasing cost of public pensions, as well as flagrant abuses of the system.
On the other, there is frustration and anger over suggestions that the state should renege on the retirement promises made to hundreds of thousands of people.
The truth, however, is not so stark. There is common ground.
Everyone acknowledges that a secure retirement is vitally important to our seniors, to our society and to our economy. No one is calling for the abolition of public pensions, and no one is advocating a system that cannot be sustained by taxpayers.
At the same time, everyone acknowledges that the cost of public pensions under the current system will increase greatly over the next three decades and that these projected costs will hamper the state’s ability to meet its core responsibilities to all citizens.
That reality means that it is time to leave political science behind and focus solely on the actuarial science — the dollars and the cents that must be brought into balance. It is the only way Teachers’ Retirement System and the other state pension systems will be able to fulfill their fiduciary duty to their members.
Studies show that an overwhelming majority of Americans are concerned about maintaining a comfortable standard of living in retirement; and rightly so. More and more, private-sector retirement plans no longer guarantee this comfortable standard, creating widespread unease.
At the same time public employees fear that the pension guarantee they do enjoy will be scuttled in an effort to create “fairness” with the private sector.
Too much effort has been spent, by everyone, trying to pin the blame. We are at the point where how we got here matters very little. The numbers have grown to a point where all that matters is where we go from here.
The facts are indisputable.
Over the next 30 years, the state will owe retirees in excess of $140 billion, but Illinois has less than $54 billion in the bank right now to meet those long-term obligations. The “unfunded” portion of that liability creates tremendous pressure on state government because it essentially triples the annual cost of public pensions to taxpayers — money that could be spent on other services.
The way forward will be guided by a sober focus on the math: What has been promised; what will it cost: what can we afford. It will not be easy, but there is enough common ground for us to stand on to get where we need to be.
It is what Illinois deserves.
Dick Ingram is executive director, Teachers’ Retirement System of the state of Illinois.