The court said in a 6-1 decision that state law "plainly mandates that none of the benefits provided for under the system shall be paid to Ryan."
"The forfeiture, in other words, is total," said the 23-page decision written by Justice Bob Thomas. "Ryan gets nothing."
"As the victims of Ryan's crimes, the taxpayers of the State of Illinois are under no obligation now to fund his retirement," the decision said.
Supreme Court Justice Anne M. Burke dissented, saying she understood "the very human impulse to want to punish Ryan for his wrongdoings by depriving him of all of his pension benefits." But she said that in her view, the majority broke with a previous decision in a similar but unrelated case, and as "an unjustified departure from precedent I cannot join it."
The high court's decision overturned an Illinois Appellate Court ruling that would have left the former governor with at least a partial pension.
After his conviction in April 2006, the General Assembly Retirement System suspended Ryan's pension of $197,037 a year. Ryan's attorneys argued that he should get a partial pension of $60,000 a year, earned while he served as a member of the state House and as Illinois lieutenant governor.
Ryan was not convicted of engaging in any wrongdoing while in those offices.
The former governor, who will be 76 on Wednesday, is serving a 6 1/2-year sentence at the federal prison at Terre Haute, Ind. He is expected to be released in July 2013, but Ryan's attorney, former Illinois Gov. James R. Thompson, and wife, Lura Lynn, have said they will ask President Barack Obama to release him early because she is ill and needs him home.
Thompson said Friday in a telephone interview the decision was "very disappointing" but there appeared to be nothing more that could be done to secure a pension for him.