TRS Response to the Civic Committee's Internet Video Intended to Scare Teachers

This is a very slick and well-produced video that uses out–of-date information without the proper context to paint a false picture of Teachers’ Retirement System and the strength of teacher pensions in Illinois.

TRS will be around for decades and all retirees will get paid their pensions.

The statistics “Illinois is Broke” depends on in this ad are not current. For instance, they quote the TRS assets at $31 billion. TRS released a news release in August that said total assets at the end of FY 2011 were $37 billion.

They cleverly wrote the script to make it sound like the System’s unfunded libability must be paid all at once. Not true.

What “IIB” doesn’t say in this piece is that TRS has carried an unfunded liability since at least 1953 and has never missed a pension check. The TRS liability is composed of what the System owes current retirees AND active teachers who have yet to retire. But that total liability - funded or unfunded - never comes due at one point in time because active teachers can’t collect their pensions until they retire. The total is paid out gradually over decades.

How much of its current total $80 billion liability does TRS have to pay out in fiscal year 2012? $4.5 billion. How much did TRS pay out last year in benefits? $4.1 billion. What were total revenues in FY 2010 and FY 2011? $17.3 billion. Again, total assets are $37 billion.

The math is easy. TRS is not going broke. The System is in debt, but has been in debt for almost 60 years because the state for decades has not contributed all that is needed to reach the magic status of “full funding.” TRS is not broke and every retired teacher is going to get their checks, in full and on time.