Even if underfunded lawmaker pension system ends, taxpayers still on the hook for $320 million
(The Center Square) – The Illinois General Assembly Retirement System, or GARS, is only 16 percent funded.
This could be the year lawmakers end it, but that will come with a cost to taxpayers.
Some incoming state lawmakers are opting out of the underfunded pension system for Illinois legislators.
“Holding elected office should be about serving the communities you represent, not collecting a lavish taxpayer-funded retirement through a pension system that is already seriously overburdened,” state Rep. Chris Bos, R-Lake Zurich, said.
Bos’ office said as of 2019, the average legislative pension was $64,408 annually, up from $47,061 in 2008.
The most recent audit of GARS from the Illinois Auditor General pegs the funding ratio at 16.48 percent. That audit for the year that ended June 30, 2020, showed of the 176 potential legislators that could take part in the fund, there were only 124 active members in GARS. There were 427 benefit recipients costing the fund $26.2 million for the year.
The net position of the fund was $63 million of a total of $382 million in overall liability, or just 16.48 percent funded. It’s the worst-funded of the state’s five public employee pension funds.
Advocates for pension reform like Wirepoints President Ted Dabrowski say it’s time to end lawmaker pensions.
“If there’s one way to start pension reform it should be with their plans, we should move them to 401(k) style plans immediately,” Dabrowski told WMAY. “Pension checks may bounce in the future and these legislators have just dramatically failed to manage it.”
State Sen. Robert Martwick, D-Chicago, chairs the GARS board of trustees. He said the system doesn’t work as intended because very few lawmakers serve long-term in the General Assembly.
Lawmakers have to serve eight years to be vested in the fund, he said, and said some calculations show the average ranges from five years for House Democrats and under 3 years for House Republicans, as an example.
“So, we should find alternative methods for them to save and this could be some sort of deferred compensation/401(k)-style benefit and contributions to social security,” Martwick said.
The reality is even if the fund were to end today, taxpayers would still be on the hook for nearly $320 million of the unfunded liability for retired legislators, he said.
“We would have to find that money out of our budget and find a way to pay that off and cap it off, if we end the General Assembly Retirement System,” Martwick said. “That doesn’t mean we shouldn’t do it. Maybe we’re at a point where it just makes sense.”
Even without the $320 million unfunded liability, Illinois taxpayers are still on the hook for more than $140 billion in unfunded liability from other public sector pension funds.
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