US - Illinois's Teachers Retirement System may sell $3bn of investments to pay for benefits this year because the state can't make its contributions to the fund, a spokesman said.
The pension plan sold $200m of assets in July and $290m in August, Dave Urbanek, spokesman for the $33bn fund, said in a phone interview.
"We understand from the comptroller that there is no money to pay us," said Urbanek. "If we don't get a state contribution, we will have to sell more."
The fund was forced to sell assets last year, too, as it awaited a state contribution. That payment came after Illinois issued $3.47bn of taxable bonds to fund its pension contribution in January.
Lawmakers failed to pass a pension bond issue this year, though they may take up a proposal to issue $3.7bn worth of the debt after the November election.
The state's unresolved $13bn deficit and $4.7bn in unpaid bills have caused the cost of insuring five-year Illinois bonds against default to more than double. It took a record $370,000 in June to protect $10m of debt, from a low of $155,000 in January, according to data compiled by Bloomberg. The price had fallen back to $301,000 yesterday.
Kelly Kraft, spokeswoman for Governor Pat Quinn's state budget director David Vaught, and Carol Knowles, spokeswoman for comptroller Daniel Hynes, were unavailable for comment.
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