Journalist in Residence
The state’s largest pension fund made headlines last week when it lowered its projected rate of return on investments by half a percentage point.
That means the Illinois legislature’s pension payments to the Teachers’ Retirement System will increase by another $670 million next year, which is $290 million more than the legislature had initially anticipated. That will bring the overall anticipated state contribution to TRS to $3.37 billion.
It is pretty hard to guess the future – particularly when it comes to money.
Although TRS had been assuming a rate of 8.5 percent, the system’s 5-year average rate of investment return is just 4.1 percent and its 10-year-average rate of return is 6 percent.
TRS officials say it is unfair to use those numbers because the nation suffered two recessions during the last decade. But shouldn’t we be budgeting for hard-times as well as good?