2023 doesn't look good for teacher pension investments.

As I have explained before, the public pensions that Illinois teachers receive instead of Social Security, is funded by three main sources.

The employee pays 9% into the fund each paycheck.

The state of Illinois as the employer, is supposed to pay a share.

They have not fulfilled their responsibility which is why our pension fund is 60% underfunded.

The third source of funding comes from investments. These investments are done by hired investment managers hired by the Teacher Retirement System’s board of trustees.

These managers charge fees, sometimes hidden, no matter how poorly the investments did.

Because the state of Illinois hasn’t met their pension funding responsibility, even if the market was going great, TRS doesn’t have the dollars to invest. It’s a double hurt.

The market in 2022 wasn’t great.

With Wall Street CEOs warning of financial carnage ahead, governors overseeing some of the nation’s largest pension systems are bracing for a hit to state investment funds that have long supported benefit plans and cash-strapped budgets. The longer the decline, the harder it gets for governments to pay retirement benefits promised to millions of teachers, cops, firefighters and other workers in exchange for careers in public service.

So, as bad a year 2022 was for Wall Street investors like pensions funds, there is nothing about 2023 that looks to be better.

And 2022 was pretty dismal. The combination of rising interest rates and sharp declines in the stock market made for a brutal investment environment.

The California Public Employees’ Retirement System, the country’s largest public pension, lost almost $30 billion in the downturn. New Jersey and Illinois pensions also finished their fiscal years in the red — as did almost every other state and local retirement system .

Nobody doubts that the system can make payments to the state’s retired teacher in the coming year.

However, continued underfunded pensions is a threat to every Illinois taxpayer.

Not that there hasn’t been good news.

Illinois Governor Pritzker has presented two successive years budgets that included the state’s statutorily required pension payments, although they still represented an actuarial shortfall.

And as I posted the other day, Chicago’s Mayor Lightfoot just made a half billion dollar advance payment on the city’s public pensions which were grossly underfunded by previous administrations.

As I also pointed out, the rest of the mayoral contenders have had nothing to say.