ANOTHER VIEW: Candidates not talking about pensions, but they should be

That’s not a surprise to those familiar with Illinois’ pension realities. But those on the outside looking in need to understand why it is that state officials say they are meeting pension obligations while, knowingly, not meeting their pension obligations.

It’s a matter of verbiage.

State officials note with pride that each year they are making “statutorily” required pension contributions. That may sound good. But the pensions are falling behind because state officials are not making “actuarial determined contributions.”

At least that’s the phrase the auditor general uses to describe the funding level financial experts say is necessary to keep the funds from growing deeper in debt.

According to the auditor general, between 2018 and 2021, the state’s statutorily required contributions ranged from $7.7 billion to $9.8 billion.

If the state had made the payments actuaries said were necessary, their contributions would have ranged from $11.8 billion to $13.9 billion.

Over those four years, the state shorted the pensions fund by $4 billion-plus each year. Over the past 10 years (2011-2021), the state underfunded the pensions by $24.6 billion.

That’s a much bigger problem than the 10-year number suggests.

Why? Making up for shorting the fund requires much bigger contributions to make up for lost investment opportunity created by the original short payment.

Filling the $24.6 billion hole will require payments several times larger, the longer the state waits, the higher the payments will be.

In other words, this is a dynamite just waiting to explode. Maybe it will never go off as state officials continue to muddle along. But when and if it does, disaster will ensue for members of the funds for teachers, judges, state employees, state university employees and judges.

For the time being, the legislators’ pension system is in the most trouble. It’s just 19% funded.

The rest — teachers (42.5% funded), state university employees (43.9% funded), state employees (41.1% funded) and judges (42% funded) are hardly well off but still significantly stronger than the legislators’ fund.

Illinois has serious financial woes, chief among them its five public pensions. Using government accounting standards, they are roughly $130 billion in debt. Using accounting standards required for the private sector, the cumulative debt is much higher.

This is bad news, which makes it a big issue in this election year. So far, few candidates for legislative or state office have said much about it.

But they should. And if they don’t, voters should ask them how they plan to address this looming disaster.