Illinois General Assembly Retirement System Only 13.52% Funded…(ALL Pensions Are Toast!!)
by Michael Shedlock via MishTalk.com,
ZeroHedge.com
Mar 14, 2017
Despite a massive rally in the stock market, Illinois public pension liabilities continue to grow.
GARS, the Illinois General Assembly Retirement System, is only 13.52% funded, down from 17% funded in 2013. How long can GARS last?
Meanwhile, Illinois has accrued a combined net pension liability of roughly $130 billion on which it assumes a 7% return.
Effectively, that is an interest liability of $9.1 billion a year even though that liability technically does not bear interest.
This is a guest post from Michael Lucci at the Illinois Policy Institute.
Interest on Illinois’ Pension Debt is $9.1 Billion Per Year
Illinois isn’t covering the interest payments on its pension debt. Those interest payments total $9.1 billion a year.
This is the reason Illinois’ pension debt continues to grow. As with personal credit card debt, until the interest is paid off none of the actual debt gets erased. Illinois’ pension debt is so large that it’s unlikely payments will cover the interest on the pension debt until 2028, according to a November 2016 special pension briefing from the Commission on Government Forecasting and Accountability.
Illinois politicians have known for years about the state’s pension crisis, even if they have not taken serious steps to address the problem. Gov. Bruce Rauner recently spoke out on the cost of interest on the pension debt. Former Gov. George Ryan weighed in as well, saying:
“First off, the biggest problem we got with the budget right now is the interest they are paying on the debt. If I were the governor, … I’d say we are never going to be able to pay the full debt back, so let’s eliminate half the debt right now and write it off.
“If that’s not constitutional, it might be worth changing the constitution. That would dramatically reduce the amount of interest that they’re paying. The bond ratings would go up and the interest would go down.”
The Rest…HERE
