February 11, 2011

Official to discuss state's public retirement systems

by Pete Rosenbery

CARBONDALE, Ill. -- William R. Atwood, executive director of the Illinois State Board of Investment, will discuss Illinois’ public retirement systems at Southern Illinois University Carbondale later this month.

Atwood will offer his insights during a discussion at 7 p.m., Tuesday, Feb. 22, in the Student Center Auditorium. Admission is free, and the public is welcome.

Atwood will present, “Payment for Services Rendered: The Moral and Legal Necessity of Funding Illinois’ Public Retirement Systems.” The Paul Simon Public Policy Institute is sponsoring Atwood’s visit. Atwood will also meet with students in the University’s business and Master of Public Administration programs while on campus.

A Du Quoin native, Atwood earned his bachelor’s degree from SIUC in 1982, and a master’s of liberal arts degree from the University of Chicago. Since March 2003, Atwood has been executive director of the Illinois State Board of Investment (ISBI), which is responsible for investment and management of pension assets that now total approximately $10.7 billion from the state’s three retirement systems -- the State Employees Retirement System, Judges’ Retirement System of Illinois and the General Assembly Retirement Systems of Illinois. In addition, the ISBI is responsible for the State of Illinois Deferred Compensation Plan, with approximately $3 billion in assets and 56,000 participants.

The discussion is part of the Institute’s continuing look at impact that debt -- international, federal, state, local, and personal -- is having on our economic futures, said David Yepsen, Institute director. Bringing to campus speakers who can shed light on the problems and options for solving them is important, he said.

“A lot of people in Southern Illinois get -- or hope to get -- a state pension,” Yepsen said. “Yet Illinois’ public pension systems are some of the most poorly funded in the nation, raising concern among retirees and those about to retire whether their money will be there and how will policy-makers go about finding it.

“Bill Atwood can help us sort through those questions and offer some expert insights into the problems facing Illinois and other states,” Yepsen said.

Atwood said that as of June 30, 2010, Illinois’ public retirement systems had accrued liabilities of $145 billion, with assets at $63 billion.

Policymakers are constitutionally and contractually precluded from reducing pension liabilities through pension benefit reductions for current participants without requiring federal intervention and expansion of the bankruptcy code, Atwood said. Such an expansion is “unprecedented, unwarranted and a bad idea,” he said.

The state, did, however, take steps to reduce legacy costs of future state employees by creating a second tier of benefits for new employees, Atwood said.

Pension benefits increased but the state’s share of payments have been cut since the Fifty Year Plan was signed by then-Gov. Jim Edgar in 1995, Atwood said That plan is for pensions to be as much as 90 percent funded by 2045 as state payment funds increase in later years.

Atwood said Illinois also needs to “focus on fiscal prudence and avoid increases to existing programs until pension costs, not to mention all other costs, are under control and in line with projected revenues.”

“The recent tax increase, although painful, was necessary and consistent with these concepts,” Atwood said. “Policymakers should not allocate new revenues to programmatic expansion. Rather, the Governor and General Assembly need to commit themselves to managing existing costs and closing the structural deficit.”

Atwood served on the staff of former U.S. Sen. Charles Percy, R-Illinois, and in the administrations of governors James Thompson and Jim Edgar. In 1994, he joined Investment Counselors Inc., in St. Louis, serving as vice president for business development. Three years later Atwood formed Midwest Managed Money Services, providing consulting services, where he worked closely with equity, fixed income, and real estate investment companies and a variety of institutional plan sponsors.

Du Quoin was a “wonderful, idyllic place to grow up,” Atwood said, recalling riding bikes throughout the Du Quoin State Fairgrounds and Perry County to go fishing and explore. His father owned businesses, he grew up in the First Baptist Church, and he benefited, and continues to benefit from “terrific public school teachers.”

He mentioned several of his high school teachers who helped nurture and leave lifelong impressions on him and thousands of other students. Retirement security, he said, is not about current employees; rather, he said, it’s about past services delivered -- such as the public servants during his youth.

“At the very least we owe it to them, and to their cohorts, to unflinchingly honor the promises made when they accepted their public positions, and so honorably and admirably performed their duties,” he said.

While at SIUC, Atwood was active in campus and area politics, along with the Marching Salukis, and delivered pizza for Pagliai’s. Returning to the region, to those who have known him the longest, is intimidating, Atwood said.

“However humbling and intimidating it may be, it remains a great honor to be asked by the Paul Simon Public Policy Institute to come to Carbondale and speak about the future of Illinois’ public retirement plans,” he said, noting that some people will still likely call him “Billy,” “which will very pleasantly keep me in my place.”