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Warning About Accounting Practices
Sat January 4, 2014
Illinois Pension Projections Too Optimistic
At the big state pension systems in Illinois, the outside actuary is supposed to be a watchdog over what the in-house actuaries are doing.
In a new report, the outside actuary warned the state is being too optimistic in how much money it expects the pension systems to make from investments.
The report also says the systems need to more thoroughly explain hundreds of millions of dollars in annual losses.
The Teachers' Retirement System, for example, reported losing more than $254 million. And at the State Employees' Retirement System, $146 million in losses were blamed on new retirees.
Representatives from the pension system said these are “extraordinary” events that are “difficult to predict.”
But the outside actuary said because these “extraordinary” events have happened six years in a row, more needs to be done to figure out what's behind them. The actuary said there should be concerns about the long-term solvency of the systems.
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