(The Center Square) – Illinois currently has an estimated $429 billion in pension liabilities, which is the most in the nation, according to a recent report.
Even though the state spends about $10 billion a year on pensions, Illinois is still trailing the rest of the nation in terms of making pension payments.
According to numbers by the Equable Institute, Illinois is one of four states whose pensions are under 60% funded. They ended 2023 with an estimated $429 billion in pension liabilities but only $218 billion worth of assets, leaving the state with $211 billion in unfunded state and local pension liabilities. The pension systems’ collective funding ratio of 50.8% is the lowest in the nation.
The state’s pension system manages five pension funds. The Teachers’ Retirement System covers retired teachers from across the state, with the exception of Chicago. The Illinois Auditor General’s most recent audit shows combined with TRS, the State Universities Retirement System, the State Employees Retirement System, the Judges’ Retirement System and the General Assembly Retirement System have an unfunded liability of about $140 billion at around 42% funded. The pension system for lawmakers is the worst-funded at about 19%.
State Rep. Steven Reick, R-Woodstock, told The Center Square that the state has been discussing a plan to address unfunded pension liabilities.
“We’re starting, and that is something that hasn’t been done since I’ve been in the General Assembly,” Reick said. “We’ve actually taken the bull by the horns and have started to actually make plans for how we are going to fix this thing.”
Earlier this year, Gov. J.B. Pritzker introduced his budget proposal and said he plans $200 million more than the statutorily required contribution of $9.8 billion for pensions, for a total of $10 billion.
Last week, Pritzker said the state is making progress toward solving the state’s pension issue, including expanding pension buyout plans to save on the liability, but suggested that it would take some time.
“Our pension funded ratio is up since I took office, we are up to about 44% from 39% or 40%. It took us 50 to 75 years to get into this problem, everybody, so its going to take us a few years to get out of it,” Pritzker said.
State Rep. Stephanie Kifowit, D-Oswego, said this year lawmakers had made an effort to finally come up with a plan to pay some of the liability.
“This is truly momentum going in the right direction to save our problems, and now we are evaluating the recommendations from the spring session and looking at recommendations or changes,” Kifowit said.
State Rep. Dagmara Avelar, D-Bolingbrook, told The Center Square if they do not address the issue soon, generations to come will have to deal with the same problems.
“Whatever we do, what we do not want to do is kick the can down the road,” Avelar said. “It requires a lot of conversations because there could be unintended consequences where we do kick the can down the road.”
New Jersey, Connecticut and Kentucky are the only other states with similar pension issues.
