Illinois Retirement Funds Selling Assets To Pay Benefits

Posted By on August 26, 2010

The Canary in the coal mine.     Sounds like a bad situation is setting itself up here…… We went over some of this just a few days ago……It’s an unfolding disaster…. Illinois Teachers’ Retirement System, Springfield, plans to sell $3 billion in investments, or about 10% of its $33.1 billion in assets in the current fiscal year to pay pension benefits, according to Dave Urbanek, public information officer.  Looks like other Illinois retirement funds are planning to do the same.  My question is…..how do they ever get this money back.  It won’t likely be from the stock market, nor in real estate…..so where is it going to come from?    Auh, the government!  They’re going to support or bail out everything and everyone………except the conservative and prudent will get nothing but a poke in the eye!   And if they think changing investment managers will save them, dream on.  Most are only as good as the economy!

Jim Sinclair’s Commentary

The reason for this is the quiet disaster. The major losses in retirement program investments is twofold:

1. The legal liability that the managers of pension funds absolutely have as compared to your average whacked hedgie.

2. The fact that for decades pension funds have been Wall Street’s circular file for junk.

Illinois Teachers’ Retirement System selling off $3B to cover benefits
By: Barry B. Burr

(Crain’s) Illinois Teachers’ Retirement System, Springfield, plans to sell $3 billion in investments, or about 10% of its $33.1 billion in assets, in the current fiscal year to pay pension benefits, according to Dave Urbanek, public information officer.

The system is the fifth Illinois statewide defined benefit plan to sell off investments this fiscal year to pay benefits.

Illinois State Universities Retirement System, Champaign, expects to sell $1.2 billion in investments from its $12.2 billion defined benefit fund this fiscal year to raise liquidity to pay benefits to participants.

The Illinois State Board of Investment, Chicago, could sell $840 million investments from its $9.9 billion fund to pay benefits of the Illinois State Employees’ Retirement System, Illinois Judges’ Retirement System and Illinois General Assembly Retirement System. ISBI oversees the investments of the three systems.

The liquidity stress from the investment sales at the five plans could force each of them to restructure their strategic asset allocations, terminate investment managers and search for new managers.

http://www.jsmineset.com/

 
 
 

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