Governor Pat Quinn today signed a new law that will increase oversight of the state's pension systems. Senate Bill 179 creates the position of a state actuary to oversee the five state-funded pension systems to help increase transparency of the systems. After signing the new law, Governor Quinn continued his call for bold pension reform that eliminates the unfunded liability.
"We must restore integrity and accountability to the state's pension systems and we are headed in the right direction with this new law," Governor Quinn said. "Now is the time to roll our sleeves up and continue to work together to fundamentally reform our pension system and rescue it from drowning in an ocean of unfunded liability."
Under Senate Bill 179, sponsored by House Speaker Michael J. Madigan (D-Chicago) and Senate Majority Leader James Clayborne (D-Belleville), the position of a state actuary will be created within the Office of the Auditor General and will report to the auditor general. The actuary will oversee the state's five pension systems: State Employees Retirement System, General Assembly Retirement System, State Universities Retirement System, Teachers Retirement System and Judges Retirement System. To strengthen accountability and transparency, the actuary will review assumptions, valuations and actuarial practices for each of the systems. The actuary will also help calculate the state's annual required contributions.
"This is another important step in making the pension systems stable by requiring an independent review of how the systems create their cost estimates," said Illinois House Speaker Michael J. Madigan.
The new law is designed to ensure that all of the state's pension systems follow Illinois law when determining future contributions. Currently, each pension system submits a certification plan to the Governor and the General Assembly. Under the new law, the systems will submit their proposals to the Governor, the General Assembly and the new state actuary who will review the plans. The actuary will then issue a report containing recommended changes to the actuarial assumptions. Final certifications will be submitted on Jan. 15. The actuary will also be responsible for conducting reviews of the actuarial practices of the systems.
Governor Quinn continues to work with leaders of the General Assembly on a long-term solution to strengthen and stabilize the state's pension system. Governor Quinn introduced a plan to reform the pension systems that would eliminate the unfunded liability over 30 years and allow public employees who have faithfully contributed to the system to receive pension benefits.
"Reforming our pension systems is critical to funding vital state programs and paying our vendors on time," said the bill's chief co-sponsor, House Majority Leader Barbara Flynn Currie (D-Chicago). "This law will make sure that all of the state's pension systems are following the correct process, and I thank Governor Quinn for signing this quickly."
"We must restore confidence in the state's pension systems," said Leader Clayborne. "I would like to thank Governor Quinn for his quick action on this bill that will help us make sure that contributions are being calculated correctly."
The new law goes into effect immediately.