Calstrs, a pension fund for state workers, is set to receive a $3 billion federal grant that will cover the full cost of its plan to replace its pension plans with a new plan, officials said Wednesday.
The Illinois pension system will pay the full $3,971 million and will have to keep up to $1.6 billion of that for itself, state Treasurer Jim Beutler said in a statement.
Calstrs is set for a new pension fund after a fund that was created by state lawmakers was shut down and put on life support in the last fiscal year.
That means the state has not been able to pay its bills for more than a year, leaving it with only $2.3 billion of its $4.4 billion plan to help it pay its employees, retirees and the state’s share of the cost of health care.
Calrstrs will also receive an additional $2 billion to cover the costs of an $8.3 million payment to a pension system trust that had previously paid for the Calstr’s plan.
That money will be used to cover retiree health care benefits and other costs that Calrstr has not paid, Beutlers spokesman, Michael Sperling, said.
In addition to the $1 billion to Calrsts, Beutsler said that the state will contribute $1 million to two other pension funds and another $3 million to other state pension funds.
The other two funds, called Calstrs in the state and Sells in the county, will receive a similar amount of money.
Beutlers office said the pension funds are the only ones in the pension system that are covered by the new plan.
Beutsler added that the federal grant will be paid out over the next few months, and that he expects to make an announcement about it by the end of the year.
He said he expects Calrrs pension fund to remain solvent for many years.
“This is a win-win for Calrsts pensioners and taxpayers, and we are hopeful that this funding will support the retirement benefits of Calrths employees for many decades to come,” Beutgers office said.