Unfunded liabilities for Illinois’ five statewide pension systems grew by $2.5 billion in a year, hitting its second-highest level since 2009. Researchers attributed most of the growth to “larger than expected salary increases.”
By Patrick Andriesen | Illinois Policy
llinois’ state pension debt grew by $2.6 billion between fiscal years 2022 and 2023, spurred primarily by “larger than expected salary increases” for state employees.
A new pension report from the state legislature’s Commission on Government Forecasting and Accountability shows statewide pension debt rose by 1.8% to $142.3 billion, based on the market value of the assets.
After growing for the second consecutive year, pension debt for the five statewide systems now sits at the second-highest level in the past 20 years. Federal pandemic funding allowed the state to temporarily arrest the deepening debt, but it is again growing.
Researchers attributed the rapid rise in pension debt to “larger than expected salary increases in all five systems.”
Pay raises for state employees in FY 2023 increased the unfunded liability by a total of $1.074 billion, with members of the three largest systems – the Teachers’ Retirement System, State Employees’ Retirement System and State Universities Retirement System – spurring most of the growth.
Another $767.6 million in new debt was attributed to “demographic and other miscellaneous changes.” This includes differences between the predicted and actual benefits paid to employees as well as refunds.
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