Updated: December 8, 2012 6:47AM
In his Nov. 1 column, Scott Reeder of the Illinois Policy Institute ignored available facts and incorrectly said the Illinois’ Teachers’ Retirement System made “bad investment decisions” last year. The reality is that the teachers’ pension fund is in good hands. In the last decade, total TRS assets grew 62 percent to $37.5 billion.
Over the last 30 years, the TRS investment return has averaged 9.6 percent, higher than our target rate of 8.5 percent. Long-term investment results matter more than short-term ones because the state has promised pensions to all teachers, including those who will not retire for another 30 years.
The column focused only on the system’s 0.76 percent investment return for fiscal 2012. What Mr. Reeder didn’t say is that the lower-than-expected earnings stemmed from a world economy that continues to be unpredictable.
There were no significant changes in TRS’ investment strategy over the last two years. Yet while the 2012 return was 0.76 percent, the 2011 return came in at 23.6 percent. Also, the 0.76 percent rate is a 12-month “snapshot” taken at the end of June. The TRS return for the 12-month period ending Sept. 30 was 16.4 percent.
The column also falsely implies that TRS is asking state government for more money this year because of its recent investment performance. In fact, the state’s annual contribution is required by law regardless of how much TRS earns. In 2011, when TRS investments earned 23.6 percent, the state was still required to contribute $2.1 billion.
The pension reform debate in Illinois is not advanced by the spread of half-truths.
Teachers’ Retirement System
Flood insurance requires special policy
Although it made landfall hundreds of miles from Illinois, tropical storm Sandy should be a wakeup call for all of us — make sure your property insurance needs are covered.
Most homeowner’s policies routinely cover damage caused by fire, wind and tornado, but most do not include damage from flooding.
Flood insurance is primarily available through the National Flood Insurance Program, which is directed by the Federal Emergency Management Agency. Some private insurers offer flood insurance through this federal program, which establishes flood insurance coverage and sets premiums.
Putting off a decision about flood insurance could leave you unprotected. There’s a 30-day waiting period before flood insurance becomes effective. If the area where you live is subject to flooding, you should consider acquiring flood insurance.
Last spring was a relatively quiet one for those Illinois residents who live in flood plains. But there is no guarantee we will have the same good fortune in the future. Make sure your property is insured for catastrophic flood damage.
Kevin J. Martin
Illinois Insurance Association
Refresh Clean Water Act
With the bipartisan support of two-thirds of its members, Congress passed the Clean Water Act in 1972 with the goal of ending the discharge of pollutants into our nation’s waters by 1985. Clearly, we have missed that goal by a longshot, though we have made great progress in cleaning up our waterways for swimming and fishing and as a source of drinking water.
Still, industrial pollution, toxic dumping, sewage overflows and more problems continue to threaten the waters on which our families and communities rely.
We must call upon our elected representatives to strengthen the law and renew our nation’s commitment to end the pollution of our waters. This goal again should have overwhelming bipartisan support because the law is crucial to public health and to local economies all across the nation.