(Reuters) – Illinois’s Teachers’ Retirement System, the state’s biggest public pension fund, said on Friday that its unfunded liability grew by 7 percent in the latest fiscal year even as investment returns jumped, driven by chronic underfunding by the state.
The Teachers’ Retirement System (TRS) said its funding gap rose to $55.73 billion as of June 30, up from $52.08 billion at the end of fiscal 2012 because the state’s pension contributions continue to fall short of actuarial requirements.
The fund said it had a 12.8 percent return on investments in fiscal 2013.
“This increase in the system’s unfunded liability, even with good investment results, is another wake-up call to state officials and our members that TRS long-term finances continue to head in the wrong direction,” the fund’s executive director, Dick Ingram, said in a statement.
TRS gave preliminary approval to a $3.412 billion contribution for fiscal 2015 using a state statutory formula. The pension system said that a $5.3 billion contribution would be needed to keep the unfunded liability from rising further.
Illinois lawmakers have been struggling to address a collective $100 billion unfunded liability for the state’s five retirement funds that resulted from years of skipping or skimping on pension payments.