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The state’s unfunded pension liabilities have been a sore thumb
for decades. The Commission of Government Forecasting and
Accountability reported that Illinois’ pension system
experienced growth in debt last year of about $2.5 billion.
Illinois Comptroller Susana Mendoza recently made the first
pension prepayment as allowed under a new law. The change allows
Mendoza to pay more into state pensions earlier in the year.
“The pre-payment of monthly state contributions allows the
retirement systems to keep assets working to generate investment
returns longer, improving the financial condition of the systems
and potentially reducing required state contributions in the
future.,” said Mendoza.
She added that it is anticipated that pre-paying $422 million of
the state’s monthly pension contribution will allow funds to
remain invested for a few months longer, generating an
additional $7 million.
In his fiscal year 2025 budget proposal presentation, Gov. J.B.
Pritzker said adding three additional years to the funding
payment plan will get the state "on a path to 100% funded like
peer states." The current goal was enacted by Gov. Jim Edgar and
the Illinois General Assembly in 1994, which created a 50-year
plan to get the state to a 90% funding ratio by 2045.
Last January, the Illinois Supreme Court endorsed the
consolidation of local police and firefighter pension systems.
The ruling dealt with a law Pritzker signed in 2019 intended to
boost investment power and cut administrative spending for
hundreds of municipal funds.
Mendoza said she is pleased the General Assembly and the
Governor approved the change in Illinois law.
“There might be some people out there who just think that we
just pay bills and not think about it,” said Mendoza to The
Center Square. “Our office is always continuously looking
creatively on how we can add more value for Illinois taxpayers.”
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