Journalist in Residence
Would you invest your money with someone who predicted an 8.5 percent return but instead gave you a measly 0.76 percent?
Guess what? You have.
Or at least thatís how the state is investing some of your tax dollars.
The Teachersí Retirement System (TRS), Illinoisí largest pension fund, announced its investment returns Thursday for the fiscal year that ended July 1.
Excuses were rampant. But make no mistake, the performance was pathetic.
For same period, Standard & Poorís 500 index grew 7.39 percent and the Dow Jones industrial average grew 7.92 percent.
TRS spokesman Dave Urbanek contends those arenít fair comparisons because the fund invests in things like real estate and bonds, as well as stocks.
True, but when my checking account collects a higher interest rate than an actively managed multibillion-dollar fund, there is reason to gripe.
Money in TRS comes from three places: educatorsí paychecks, taxpayers and investments.
When investment returns come in under projections, it falls upon taxpayers to make up the difference.
Itís worth noting that members of the stateís two dominant teachers unions control a majority of the seats on the TRS board. Active and retired educators elected six Illinois Education Association members to the board, and Gov. Pat Quinn appointed one member from the Illinois Federation of Teachers.
And that board is responsible for overseeing TRSí investments.
So why are the taxpayers Ė rather than the union members themselves Ė responsible for making up for investment shortfalls?
Perhaps thatís a question members of the general assembly need to ask.
Unfortunately, this isnít the first time TRS investment returns have been disappointing. Before this year, the five-year average rate of return was only 4.1 percent, and the 10-year average was 6 percent.