State Pensions May be Merged in Illinois

Newsreleasewire.com:

Illinois Treasurer Alexi Giannoulias has proposed combining the investments of the five State-funded pension systems into one single system in an effort to cut administrative costs and fight potential fraud and abuse.

Under the proposed system, the single fund would be managed by a new Illinois Public Employees’ Retirement System (ILPERS). The treasurer estimates this change would save taxpayers up to $82 million annually and has the potential to reduce unfunded liability by $16 billion by 2045. The State’s current liability for underfunded pensions stands at a record $54 billion, which Giannoulias said ranks as a major reason to merge the five pension systems.

The plan also introduces ethics and transparency requirements to help ensure appropriate performance by board members overseeing the proposed retirement system. Those requirements would prohibit board members, their spouses, and ILPERS employees from benefiting financially from the investment system and would ban vendors with contracts exceeding $50,000 from making political contributions.

“Currently, State pension assets are invested on three separate boards, creating multiple opportunities for corruption,” said Sara Wojcicki, spokesperson for the treasurer’s office.

Giannoulias’s proposed change also would make it easier for government watchdogs to help ensure pension assets are managed and invested properly because they would monitor the actions of just one board instead of five.