A bill that would increase the frequency of actuarial reviews of the State’s five public pension systems was approved unanimously in the Illinois House on Thursday.
According to the bill’s sponsor, State Representative Tom Morrison (R-Palatine), current law only requires a thorough investigation into the pension systems every five years. “A more frequent actuarial study can ensure we are making the right payments to stay on track with our obligations, especially since we now have new Tier II employees in our pension systems,” said Morrison. “These actuarial reviews are incredibly important, because the data leads to recommendations that may be implemented by the pension boards.”
HB422 would amend the Teachers’ Retirement System, State Universities’ Retirement System, State Employees’ Retirement System, Judges’ Retirement System and the General Assembly Retirement System by requiring that the actuary of each system conduct an investigation of the system every three years rather than five years as is currently written in the statutes. Each review would examine the mortality, retirement, disability, separation, interest and salary rate assumptions used by the system for accuracy.
“Allowing for more frequent small changes in system assumptions prevents the need for drastic changes, which ultimately lead to difficulty in budget planning,” Morrison said. “The new data would provide many benefits, including greater predictability for our annual pension payments.”