Illinois has come under fire again for allegations of government misconduct. This time the alleged wrongdoer is the Illinois pension system. According to the New York Times, the Securities and Exchange Commission (SEC) has accused Illinois of improperly funding public workers’ retirement plans from 2005 to 2009 when Illinois also issued $2.2 billion in bonds. Specifically, the SEC alleges that “Illinois failed to disclose that its statutory plan significantly underfunded the state’s pension obligations and increased the risk to its overall financial condition, [and] also misled investors about the effect of changes to its statutory plan.”
This is only the second time in history that federal regulators have accused an American state of securities fraud.
The SEC and the state have reached a settlement agreement, whereby Illinois agreed to a cease-and-desist order without admitting or denying the allegations. No fines or penalties were imposed.
The announcement of the SEC’s allegations increased concerns about the already precarious state pension fund. According to Gov. Quinn, “[w]ithout pension reform, within two years, Illinois will be spending more on public pensions than on education.”
Like Illinois, many other states are struggling to meet pension obligations as large numbers of people begin to qualify to receive their pension benefits, which is a significant cause for concern for those individuals who are reaching retirement age or are disabled. In several states, including Illinois, teachers, state police, and certain other public workers do not participate in the Social Security program, so they have no recourse for retirement funds if the state pension system fails. In other words, if the Illinois pension fund is unable to meet its obligations to pension beneficiaries, many people will be left without income since they have not “earned” credits for Social Security retirement or disability benefits.
The Chicago Social Security disability attorneys at Ankin Law Office, LLC are dedicated to helping individuals with disabilities obtain the full range of benefits and compensation to which they are entitled, including Social Security disability benefits.
If you would like more information about the Illinois pension crisis and how it might impact your Social Security benefits, contact us at (800) 442-6546 to schedule a free consultation with one of our Chicago Social Security disability lawyers.