The Illinois Senate on Nov. 4 will hold a special session to consider a bill to sell as much as $4.1 billion in pension obligation bonds to finance all of the state’s required contributions to the five state retirement systems for the current fiscal year, said John Patterson, deputy press secretary for state Senate President John J. Cullerton.
The state has not made any of its required contributions since the fiscal year began on July 1, forcing the state systems to sell investments at an annualized rate of about 10% of their assets to pay monthly pension benefits.
Gov. Pat Quinn “has called for responsible borrowing to fund the states required payment to the pension systems and is eager for the Senate to pass this measure for it is the least costly option for taxpayers,” Kelly Kraft, spokeswoman for Mr. Quinn and the state Office of Management and Budget.
The General Assembly adjourned May 27 without the Senate voting on the pension bond bill, which the House earlier passed 71-44, with two voting present, on May 25. At the time, Mr. Cullerton believed there wasn’t enough support to get the three-fifths vote requirement in the Senate, Mr. Patterson said.
The bill calls for borrowing between $3.7 billion and $4.1 billion, depending on whether the systems certify their actuarial required state contributions, taking into account a reduction in funding costs stemming from a measure enacted last spring that cut pension benefits for new state employees, Mr. Patterson said.
Illinois already has about $13 billion in pension obligations bonds still outstanding from $10 billion sold in 2003 and $3.4 billion in January 2010.
Earlier this year, Mr. Quinn proposed a state budget provision that wasn’t approved by the General Assembly that called for contributing $3.74 billion to the five state retirement systems. Under it, the $33.7 billion Illinois Teachers’ Retirement System, Springfield, would receive $2.16 billion; the $12.9 billion Illinois State Universities Retirement System, Champaign, $777 million; and the $10 billion Illinois State Board of Investment, Chicago, a combined $801 million for the three systems it oversees — Illinois State Employees’ Retirement System, the Illinois Judges’ Retirement System and the Illinois General Assembly Retirement System.
The General Assembly is scheduled to reconvene Nov. 16.