The Illinois Teachers’ Retirement System on Friday voted to lower its assumed rate of return for the second time in three years.
The board voted to lower the rate from 7.5 percent to 7 percent, much to the dismay of various government officials who are wary of the extra cost it will bring to the state.
The news of the vote triggered more shade from the Rauner administration on Friday. From Reuters:
“Illinois taxpayers including our social service providers and small business owners were just handed a bill for nearly a half-billion dollars,” Rauner spokesman Lance Trover said in a statement.
He added that “questions remain about the legality of today’s action,” alluding to concerns raised by Rauner’s deputy general counsel that TRS’ revised meeting agenda containing the rate change as a voting measure did not comply with the state’s open meetings act’s 48-hour posting requirement.
TRS Executive Director Dick Ingram disputed there was any violation. He said the board has a fiduciary obligation to do “what is best for the financial sustainability” of the fund and that its action to lower the rate can be overridden by the Illinois Legislature.
Illinois’ total fiscal 2017 pension payment to its five retirement systems was pegged at $7.9 billion, up from $7.617 billion in fiscal 2016 and $6.9 billion in fiscal 2015, according to a March bipartisan legislative commission report.