The Illinois Governor's Pension Commission discussed possible benefit reductions in state retirement plans that could save at least $15 billion to $20 billion over the long term, under scenarios presented by Deloitte Consulting, consultant to the panel. The commission also discussed increasing employee contributions, dedicating riverboat casino revenues for state pension contributions, and selling more pension obligation bonds. Illinois issued $10 billion in such bonds in 2003.
"We are looking at different alternatives that change provisions of plans, shifting costs to employees and providing lesser benefits, such as (a cost-of-living adjustment), said Lance J. Weiss, Deloitte actuarial consultant to the commission, which is helping to develop suggestions on how to solve the severe underfunding of the state's five pension systems.
The systems have an estimated $82.5 billion in aggregate liabilities and a combined $47 billion in assets, according to a report last spring.
"We are in a severe crisis in funding our pensions," said Laurence Msall, a commission member. "The whole assumption of this panel is (the state) can't afford the current (pension) system and we haven't been (properly) funding the current system. He urged the commission to recommend that the state General Assembly place a moratorium on any pension enhancements until it decides how to fund current benefits.
The commission made no decisions. It is scheduled to meet again Dec. 10. Roland W. Burris, commission chairman, said the panel has not set a timeframe for making recommendations to Gov. Rod R. Blagojevich.
