Illinois state and local pension debt now tallies $218 billion with both debt to GDP and funding ratios the worst in the nation, according to a new Equable Institute report.
By multiple measures, Illinois’ statewide public pensions are in the worst shape in the nation, a new report shows.
The same is true for Chicago-area public pensions.
Yet political leaders either don’t get it or fail to admit it.
Gov. J.B. Pritzker and others are touting Illinois’ financial improvements, but a new report by Equable Institute shows just how little improvement has been made on Illinois’ biggest financial problem – pension debt. The report examined state and local pension debt across all major state and municipal pension plans, with the analysis confirming Illinois’ pension crisis is the worst in the nation.
Illinois ended the 2023 fiscal year 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% was the lowest in the nation. Experts warn pensions with funding ratios below 60% are deeply troubled and plans with funding ratios below 40% are likely to be past the point of no return.
The report also looked at other metrics to add context to the pension debt issue for states. It shows Illinois’ unfunded liabilities as a percentage of its gross domestic product – a proxy for a state’ ability to pay – stand at 21%, by far the worst figure in the nation. It was nearly five percentage points higher than the second-worst figure of 16.2% in Kentucky. Forty-two states had unfunded liabilities as a percentage of GDP lower than 10%.
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