Illinois Pension Challenges
The Illinois public pension system is on an unsustainable course that threatens the delivery of essential government services. Approximately 20 cents of every taxpayer dollar is now dedicated to pensions—a 400 percent increase over the past 20 years. Without reform, pension costs could consume a staggering 40 percent of Illinois' revenue by 2045.
As a result of chronic underfunding, the state has $95 billion in pension debt and has set aside only 40 percent of the money needed to pay for retirement promises it has made to workers. In 2013, almost two-thirds of each dollar put into the State Employees' Retirement System of Illinois went to pay for pension debt from past years rather than for benefits earned that year. This share will continue to grow, crowding out important public investments in order to pay for mistakes of the past. The state's four other pension plans are in similar shape.
The bill for kicking the can down the road has already come due, placing pension promises at risk and leading to lower bond ratings, less money for teachers and police officers, and unpaid bills for cashstarved nonprofits. Without reform, everyone will lose.
The Rising Cost of Public Pensions
Portion of each taxpayer dollar that supports public pension financing, 1995-2013
October Three and Maeva Municipal Solutions, 2013