(The Center Square) – A non-partisan think tank reports Illinois’ public pension plans are second worst in the nation when it comes to unfunded liabilities.
The Reason Foundation released its State Pension Tracker, which forecasts state pension plans for fiscal year 2023.
“It’s basically a dashboard that gives the first peek into what unfunded liabilities for state-run pensions are going to look like for 2023,” Senior Policy Analyst Zachary Christenson said.
Based on an estimated annual investment return of 7% for public pension plans, Reason Foundation forecasts the 118 state pension systems analyzed nationwide have $1.3 trillion in total unfunded liabilities at the end of the 2023 fiscal year.
A large part of that enormous amount is from Illinois. Christenson said Illinois is one of the states with the most public pension debt, with a funded ratio of less than 53%.
“That’s a huge, huge problem and basically the taxpayers are going to have to come up with $144 billion sometime over the next 20 to 30 years,” Christenson said.
Only California has more unfunded public pension liabilities than Illinois. At the other end of the spectrum is Washington, where their pension plan sits at around 107% funded and has a surplus of $8 billion.
Christensen said the dire situation with Illinois’ public pension plan has been ongoing for years.
“Illinois’ pensions have been low 50s to sub-50 percent funded since the Great Recession, which means they only have half of what they need to fulfill the promises that they’ve already made to public workers,” Christensen said.
Illinois lawmakers plan to look at several pension proposals and could address the matter in future legislative sessions.