Subject: SEC launches inquiry into Illinois pensions
From: "Neil Callahan" <[email-masked]>
To: <[email-masked]>, "'Alexandra Stanton'" <[email-masked]>, "'Hunter Biden'" <[email-masked]>
Date: Tue, 25 Jan 2011 12:45:41 -0500

SEC launches inquiry into Illinois pensions
<http://chicagobreakingbusiness.com/2011/01/sec-lauches-inquiry-into-illinoi
s-pensions.html> 

Posted today at 11:18 a.m. 

By Monique Garcia and Kathy Bergen | The Securities and Exchange Commission
is conducting an inquiry into the state's financial disclosures about
potential savings expected from the pension reforms enacted last spring,
Gov. Patrick Quinn's office confirmed Tuesday morning.

"This is not an investigation, this is an inquiry," said Kelly Kraft, the
governor's budget spokeswoman. "The SEC has stated this is not an indication
of any violation. We feel our disclosures have always been accurate and
complete."

The inquiry began in September, according to a report by Moody's Investors
Service issued late Monday.

The SEC is looking into whether the state was taking projections of future
savings and treating them as reductions in the state's current pension
costs, Robert Kurtter, a managing director in the public finance division of
Moody's, told the Wall Street Journal, which first reported the inquiry.

Last April, Quinn signed into law pension reforms that he estimated would
save taxpayers $200 billion over nearly 35 years and stabilize current
employee pensions. The changes included an increase in the retirement age
and a cap on the salary level on which pension benefits are based.

The SEC last year accused New Jersey of not properly disclosing the
condition of two large pension funds. New Jersey settled the case without
admitting or denying wrongdoing.

"In light of the New Jersey order, and prior to being contacted by the SEC,
the state took proactive steps to update its disclosures, and we now feel
our disclosures exceed the new, more rigorous standards," Kraft said.

She said the SEC told the state the inquiry "should not be construed as an
adverse reflection on any entity or individual involved, nor should it be
interpreted as an indication by the commission or its staff that any
violations of the federal securities laws has occurred."

The news of the SEC inquiry comes as the state prepares to sell about $3.7
billion in bonds, which would let it pay its required annual contributions
to employee pension funds.

Illinois employee pension funds are severely underfunded, and the situation
continues to deteriorate, according to the Moody's report.

The funded ratio for the five plans dropped from 50 percent to 45 percent in
the last fiscal year, as combined liabilities grew to $138 billion from $126
billion, the report stated.

Read more about the topics in this post: Illinois pensions
<http://chicagobreakingbusiness.com/tag/illinois-pensions> , SEC
<http://chicagobreakingbusiness.com/tag/sec> , State of Illinois
<http://chicagobreakingbusiness.com/tag/state-of-illinois> 

http://chicagobreakingbusiness.com/2011/01/sec-lauches-inquiry-into-illinois
-pensions.html

 

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