Illinois Teachers pension fund cuts assumed rate of return to 8
Published: September 21, 2012 - Pensions & Investments
Illinois Teachers' Retirement System, Springfield, at a special meeting on
Friday lowered the assumed long-term rate of return on the $36 billion pension
fund to 8% from 8.5%, confirmed David Urbanek, a spokesman.
Trustees approved the reduction by an 11-2 vote.
Mr. Urbanek noted that the most significant impact of the new assumed rate is
that it will increase the retirement system's long-term unfunded liability to
57.6% from the current level of 54.8%.
Illinois' required annual contributions beginning in 2014 will increase as a
result of the lower assumed return rate, to $3.37 billion compared to $3.07
billion using an 8.5% return assumption.
gThe assumed rate of return greatly influences the financial future of TRS,h
said Richard W. Ingram, executive director, in a news release from the pension
fund. gReducing the rate c to 8% is a prudent move that balanced reality with
the needs of TRS members.h
Buck Consultants, the retirement system's actuary, recommended lowering the
assumed rate at the board's Aug. 24 meeting, but trustees postponed a decision
as they waited for more analysis by TRS staff, Mr. Urbanek confirmed.
At Friday's special meeting, trustees also approved having actuarial studies
completed every three years rather than the five years required by Illinois
state law, because they are concerned about gthe volatility of the world
economy,h according to the news release.
Original Story Link: http://www.pionline.com/article/20120921/reg/120929969
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