A financial expert at the University of Illinois says bond rating agency Moody's is keeping a close eye on the school due to the state's ongoing pension crisis. U of I Chief Financial Officer and Comptroller Walter Knorr says Illinois' unfunded liability in the State University Retirement System alone is 20-billion dollars. It's one of four large pension plans the state deals with.
Knorr says the U of I's portion is 8-point-3 billion, which would have to be included in financial statements in 2015.
"The rating agencies are going to be focused on that type of event, and ultimately the Accounting Standards Board says 'that liability belongs to you,' to the university or whoever. All the Illinois publics face the same problem."
In September, Moody's downgraded the U of I and six other public universities due to the pension crisis and slow payments of appropriated funds. A lower bond rating makes it more difficult for institutions to borrow money. Knorr told U of I Trustees at their meeting in Springfield the school will be 'walking on eggshells' until the pension issue is dealt with by lawmakers. Illinois House Speaker Mike Madigan has suggested the legislature may be called back to Springfield to deal with pensions the week of December 3rd.
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