(June 20, 2012) — Illinois Governor Pat Quinn has signed a new law that will add an actuary post to oversee the state’s pension systems in determining future contributions for additional transparency.
“We welcome the introduction of the state actuary having another set of eyes,” Dave Urbanek, spokesman for the Teachers’ Retirement System for the State of Illinois told aiCIO. Yet, according to Urbanek, Illinois’ pension systems have always followed state law when determining future contributions. “Nevertheless, we will work with the illinois auditor general and state actuary,” he said, noting that the introduction of the law may be an effort to restore public image.
Senate Bill 179 creates the position of a state actuary to oversee the five state-funded pension systems, which have a combined unfunded liability of $83 billion. “We must restore integrity and accountability to the state’s pension systems and we are headed in the right direction with this new law,” Governor Quinn said. “Now is the time to roll our sleeves up and continue to work together to fundamentally reform our pension system and rescue it from drowning in an ocean of unfunded liability.”
The law, which takes effect immediately, is designed to ensure that the state’s pension systems follow Illinois law when determining future contributions.
Currently, each pension system submits a certification plan to the governor and the General Assembly. Under the new law, the systems will submit their proposals to the governor, the General Assembly and the new state actuary who will review the plans. The actuary will then issue a report containing recommended changes to the actuarial assumptions. Final certifications will be submitted on January 15. The actuary will also be responsible for conducting reviews of the actuarial practices of the systems.
The Illinois actuary will review assumptions, valuations and actuarial practices for each of the state’s five systems: the $37 billion Illinois Teachers’ Retirement System, Springfield; the $14 billion Illinois State Universities Retirement System, Champaign; along with the three systems whose combined $11.9 billion in assets are overseen by the Illinois State Board of Investment — Illinois State Employees’ Retirement System, Illinois Judges’ Retirement System and Illinois General Assembly Retirement System.