August 27 , 2018
When I first joined the bench as a circuit judge in the mid-1980s, the “old timers” at the courthouse kidded that you could not get a group of judges together for more than five minutes before one of them would start talking about pensions. Now that I have become something of an old timer myself, I have come to realize that there is an obvious but important truth behind the joke: for most Illinois judges, the promise of pension benefits has played a central role in the way they view their jobs. And rightly so.
The long-term economic security provided by pensions can be an important factor in motivating attorneys to make that critical first step from the practice of law to the pursuit of judicial office. By providing an incentive to remain in office as benefits accrue, pensions make it possible for judges to continue to develop their expertise and improve their skills as judges. Perhaps most importantly, just as with adequate pay and the prohibition against reduction in compensation, judges understand that the assurance of a pension helps to preserve their judicial independence by providing them with a meaningful financial buffer against the political repercussions of unpopular decisions. Illinois judges may not enjoy lifetime tenure, but in terms of insuring a fair and impartial judiciary, a secure pension may be the next best thing.
Our current pension system dates back to 1941, when the General Assembly established the Judges Retirement System (JRS) “for the purpose of securing the payment of annuities and benefits as prescribed [by Article 18 of the Illinois Pension Code’.” 40 ILCS 5/18-101 (West 2016). Consistent with this statutory charge, the mission of JRS is “[t]o establish an efficient method of permitting retirement, without hardship or prejudice, of judges who are aged or *** incapacitated, by enabling them to accumulate reserves for themselves and their dependents for old age, disability, death and termination of employment.” http://www.srs.illinois.gov/Judges/mission_jrs.htm.
When the system was inaugurated, it had just seven annuitants who received an average monthly benefit of approximately $300. For the fiscal year ending June 30, 2017, the system had grown to cover 852 retirement annuitants, 322 people receiving survivor annuities, and one person on temporary disability. Monthly benefit disbursements have reached the neighborhood of $12 million.
This now massive undertaking is headed by three trustees appointed by the Supreme Court, all of whom are, themselves, judges. Currently, the trustees are Appellate Court Justices James R. Moore and Mary S. Schostok and Circuit Judge John C. Anderson. Justice Schostok serves as chairperson, Justice Moore as vice-chair. By virtue of my position as Chief Justice, I am an ex officio member, but I do not normally participate directly in the Board’s work. By custom and practice, the Chief Justice is represented by a proxy. Mine is Circuit Judge Debra Walker, who also acted as proxy for Justice Rita B. Garman when she was Chief Justice. The State Treasurer is an ex officio member of the Board as well, and he is also represented by a proxy, Rodrigo Garcia. Timothy Blair is the Board’s Administrative Secretary. Sandor Goldstein is the JRS Actuary. Angie Ackerson has become Benefits Manager following Jayne Waldeck’s retirement in 2017.
While JRS, like other public pension systems, has been buffeted by underfunding and market downturns in the past, current JRS leadership has overseen a period of stabilization and growth. The State has begun making its required contributions in full and on time (even early in some cases), and the Illinois State Board of Investments (ISBI), which is responsible for investing JRS funds, has been moving toward its investment targets and realizing favorable returns. During the last quarter of 2017, the ISBI’s portfolio increased in value by about $700 million. Over the past year, the total portfolio realized a return of 10.6%. (Illinois is, by the way, at the forefront of using minority and women-owned firms for its investments.) Actuaries have projected that we will reach 35.55% funding by June 30, 2019.
As a careful steward of pension funds, JRS leadership is also pledged to reduce costs. The JRS operating budget for FY 2019 is actually 2.06% lower than its operating budget for FY 2018. At the same time, JRS management makes every possible effort to maintain the highest standards in carrying out its responsibilities. Just this month, JRS was recognized by the Government Finance Officers Association of the United States and Canada with that organizations’ Certificate of Achievement for Excellence in Financial Reporting, the highest form of recognition in the area of governmental accounting and financial reporting, based on JRS’ comprehensive annual financial report for the fiscal year ending in 2017.
Overall, the current picture therefore seems to be a positive one. The historic uncertainties of financial markets and State finances mean that we cannot be overly optimistic that JRS will continue on an upward path without interruption. What there can be no doubt about, however, is that the outstanding men and women who help manage JRS are acutely aware of the importance of the pension system in maintaining a dedicated, experienced and independent judiciary and are fully committed to doing their best, with the resources available to them, to insure that the system fulfills its promises to all of its member judges and their dependents.