By Illinois Radio Network
SPRINGFIELD – In spite of record gains in the stock market, Illinois’ pension accounts are still treading water.
The stock market is booming. According to the Federal Reserve, the value of corporate equities has risen an average of nine percent in the last three years. That means stockholders are happy. Illinois’ pension systems are stockholders too. The five largest state funds have $85 billion in the markets.
But despite the big returns, the Commission on Government Forecasting and Accountability said the unfunded pension debt dropped just $700 million this year.
Ted Dabrowski, president of financial news analysis website Wirepoints Illinois, said the state is pouring billions of dollars in, but the debt levels aren’t getting much better.
“We’re taking more and more money away from schools and healthcare and pouring it into pensions,” he said.
The state will really be in trouble when the economy begins to level back out unless, Dabrowski said, it begins moving away from pensions and into regular retirement plans.
“Something that’s predictable that’s not able to be manipulated by politicians,” he said. “You’re much safer that way rather than being under a corrupt system in Illinois that’s failed to manage pensions.”
Illinois’ annual pension bill for the fiscal year starting next summer will be $8.5 billion, or one-fourth of the state’s full budget.
In October, Moody’s ranked Illinois among the five most vulnerable to an economic downturn.
