New law increases scrutiny of Illinois’ ailing pension funds

HB 422 mandates more frequent examination of Illinois’ pension funds and promotes a much-needed increase in state retirement fund oversight.

On Aug. 3, Gov. Bruce Rauner signed House Bill 422, which will increase the oversight and scrutiny of Illinois’ ailing pension systems.

HB 422 requires an actuarial investigation of each of Illinois’ five state-funded pension systems at least once every three years. The law currently requires this investigation every five years.

These investigations are conducted by the actuary of each system, who is responsible for evaluating the variables on which the pension system contributions and payouts are based. These variables include: rates of mortality retirement, disability, separation, interest and salaries.

It is no secret that Illinois’ pension system is broken, and every step toward making it more transparent and reliable helps. Actuarial oversight and review of these systems should happen often to provide as much information as possible about where they stand and what their flaws are.

State Rep. Tom Morrison and state Sen. Michael Connelly sponsored HB 422, which passed both chambers unanimously. Illinois Policy Action supported the bill.