Worst pension reporting of the week
By: Mark Glennon*
All the regular media in Illinois. That’s who botched the primary story this past week on Illinois pensions, which was the annual report of the Auditor General about the five state pensions that certifies amounts to be contributed by taxpayers for the year.
Most stories re-skinned the Associated Press story on the report, linked here, which basically just says the taxpayer contribution will increase by $680 million to about $7.5 billion. That’s stenography, not reporting. The real story is that taxpayer contributions still won’t come close to amounts sufficient just to keep unfunded liabilities even, as we have documented here repeatedly.
In fact, it’s not even good stenography. The report itself clearly says, in bold face, that the contributions are not sufficient and are calculated using methods that don’t meet generally accepted actuarial standards. No mention of that in the A.P story or any others I have seen.
And did even one reporter notice that the report entirely ignores the $56 billion addition of healthcare costs to the pension obligation, which results from the Kanerva decision in July by the Illinois Supreme Court? A 50% increase that nobody is talking about and that the state isn’t even pretending to fund? Nope.
The worst coverage was from the the State Journal-Register, always anxious to paint a benign picture of the pension problem to keep its Springfield readers happy. Its story describes the certified state payments as “amounts needed to meet the pension obligations,” and leaves the impression appropriate payments are being made. Nonsense. Ever-increasing contributions to the pensions are not curtailing ever-increasing unfunded liabilities.
Our article about the real significance of the Auditor General’s report is linked here.
Finally, will the media please just stop using the state’s official numbers on pension liabilities? Nobody believes them anymore. The A.P story, like so many others, says the unfunded state pension liability is $111 billion. Try $250 billion, which The Economist recently said is more like it.
*Mark Glennon is founder of WirePoints