State Pensions
The State of Illinois manages five separate pension systems for state workers (SERS), university employees (SURS), judges (JRS), lawmakers (GARS) and teachers (TRS) outside Chicago.
All five pension funds are extremely unhealthy. In fact, under most measures, Illinoisans are suffering under the worst pension crisis in the nation.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability, which publishes the state’s official pension numbers. Those official numbers, including the state’s 2020 pension shortfall of $144 billion – are based on the state actuaries’ rosy assumptions (for example, assuming an investment rate of return close to 7 percent).
Other financial institutions use more realistic assumptions to calculate Illinois’ pension health. Moody’s Investors Service, for example, calculates that the state’s true pension shortfall is $330 billion.
Please keep in mind that the official data shown is based on the state’s assumptions. The true state of Illinois pensions is likely far worse than what is shown below.
The officially-reported shortfall of Illinois’ five state-run pension funds grew to $144 billion in 2020, up $7 billion from the year before. Illinois’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($236 billion in accrued liabilities) and the money they have on hand ($92 billion in assets). Learn more about unfunded liabilities.
The $83 billion shortfall in the Teachers Retirement System (TRS) makes up more than half (57 percent) of the debt owed by the state. The State Employee Retirement System (SERS) has a shortfall of $31 billion – equal to 21 percent of the total debt. The State Universities Retirement System shortfall is $30 billion, or 20 percent of the total. The Judge's Retirement System (JRS) and the General Assembly Retirement System (GARS) are far smaller funds with a combined shortfall of $2 billion.
The combined funded ratio of the five state funds was just 39 percent in 2020, meaning the funds had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the funds’ $92 billion in assets by their $236 billion in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If Illinois’ funds were run by a private sector company, they would be declared insolvent several times over.
The state’s combined pension funded ratio has declined significantly since the year 2000, falling from 76 percent to less than 39 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of funds has failed to improve since then.
Four of the five pension systems have stagnated at about 40 percent funding for over a decade. GARS is the exception. At only 17 percent funded, lawmaker pensions need a taxpayer bailout every year to keep from running out of money entirely.
Illinois’ pension crisis continues to worsen despite taxpayers pouring hundreds of millions of additional dollars into the funds every year.
State appropriations to the pension funds are now eight times bigger than they were two decades ago. Illinoisans paid $9.8 billion into the funds in 2021, compared to just $1.2 billion in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds. Those bonds won’t be fully paid off until 2033.
TRS receives the largest share of state taxpayer contributions, over $4.8 billion in 2020. That’s followed by SERS with $2.4 billion, SURS with $1.9 billion, JRS with $144 million, and GRS with $26 million.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers.
In 2000, taxpayer contributions were nearly equal to employee contributions, $1.2 billion vs. $1 billion. Today, taxpayers are contributing five times more than employees, $9.2 billion vs. $1.7 billion.
Opponents of reform like to blame the pension crisis on underfunding – they say that taxpayers haven’t paid enough into the pension funds.
But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to state workers have grown to $236 billion in 2020, up from $18 billion in 1987. That’s an increase of more than 1,200 percent, 4 times bigger than the growth in Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on the pension funds’ health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the funds’ finances stable.
The number of active workers has remained largely constant at about 260,000 people. However, the number of retirees has increased dramatically, growing to over 235,000 in 2020 from 100,000 in 2000. There are now just 1.1 active workers for every retiree compared to 2.5 in 2000.
The combined average salary for workers in the five funds has grown by more than 60 percent over the last two decades. In 2000, the average public worker salary equaled $43,000. By 2020, it had grown to nearly $71,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average state pension equaled nearly $27,000. By 2020, it had grown to nearly $51,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that state workers receive. The general average includes retirees who only worked for the state for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career state worker averaged across all five state funds is $70,600.
Career Illinois teachers receive an annual pension of over $79,000. Career university workers’ average pension totals over $71,000. And former state workers receive a $54,000 pension, plus Social Security benefits (over 95 percent of SERS members are also enrolled in Social Security).
In 2020, the five state pension funds sent out $13 billion in benefit checks to retirees. That amount will grow to $25 billion a year by 2045. In total, the pension funds will pay out $506 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $236 billion set aside today in order to make those $506 billion in future payments. That $236 billion is called the state’s accrued liability.
Illinois pensions are in crisis because they don’t have that $236 billion on hand. Instead, they only have $92 billion in assets. The $144 billion difference between assets and accrued liabilities is the state’s official unfunded liability.
Illinois’ rapid growth in taxpayer pension contributions (see above) continues to crowd out spending on other vital state services like transportation, healthcare and public safety.
The state’s pension costs skyrocketed as a share of the state’s budget in 2012 and have remained high ever since. The Commission on Government Forecasting and Accountability estimates that pension contributions will continue to consume a quarter of the budget for the next 25 years.
No other state in the country has as much of its budget devoted to pension costs.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045.
Achieving that goal will require a constant increase in taxpayer funding for the next 25 years – and will continue to swallow at least a quarter of Illinois’ budget (see above).
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. The state’s pension shortfall will continue to worsen through 2027 and will only fall below $144 billion by 2034
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of Illinois pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the Teachers’ Retirement Fund, the pension fund for all teachers and administrators in school districts other than Chicago Public Schools. CPS has its own separate pension fund.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of TRS pensions is likely far worse than what is shown below.
The officially-reported shortfall of the Teachers’ Retirement System grew to $83 billion in 2020, up $5 billion from the year before.
TRS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($136 billion in accrued liabilities) and the money they have on hand ($52 billion in assets). Learn more about unfunded liabilities.
TRS was just 39 percent funded in 2020, meaning the system had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $52 billion in assets by its $136 billion in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If TRS were run by a private sector company, it would be declared insolvent several times over.
TRS’ funded ratio has declined significantly since the year 2000, falling from 68 percent to 39 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into TRS every year.
State appropriations to TRS are now eight times bigger than they were two decades ago. Illinoisans paid $5.1 billion into the funds in 2021, compared to just $0.6 billion in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers.
In 2000, taxpayer contributions to TRS were nearly equal to employee contributions, $630 million vs. $620 million. Today, taxpayers are contributing nearly five times more than employees, $4.8 billion vs. $1.0 billion.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to teachers have grown to $136 billion in 2020, up from $10 billion in 1987. That’s an increase of more than 1,200 percent, 4 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active workers in TRS has grown from 123,000 to 138,000 between 2000 and 2020, up 12 percent. However, the number of retirees has increased far more dramatically, growing to nearly 113,000 in 2020 from 54,000 in 2000, up more than 100 percent.
There are now just 1.2 active workers for every retiree compared to 2.1 in 2000.
The average salary for TRS members has grown by more than 50 percent over the last two decades. In 2000, the average teacher salary equaled just over $50,000. By 2020, it had grown to $76,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average teacher pension equaled over $25,000. By 2020, it had grown to over $60,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that teachers receive. The general average includes retirees who only worked for Illinois school districts for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career teacher (retired after 1/1/2017 with 30 or more years of service) is $79,400.
In 2020, TRS sent out $7.1 billion in benefit checks to retirees. That amount will grow to $15.2 billion a year by 2045. In total, TRS will pay out more than $290 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $136 billion set aside in order to make those $290 billion in future payments. That $136 billion is called the state’s accrued liability.
TRS is in crisis because the fund doesn't have that $136 billion on hand. Instead, the fund only has $52 billion in assets. The $83 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. TRS’ pension shortfall will continue to worsen through 2028 and will only fall below its current level by 2035.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of TRS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the State Employees’ Retirement Fund, the pension fund for all employees of the State of Illinois.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of SERS is likely far worse than what is shown below.
The officially-reported shortfall of the State Employees’ Retirement System grew to $31 billion in 2020, up $700 million from the year before.
SERS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($50 billion in accrued liabilities) and the money they have on hand ($19 billion in assets). Learn more about unfunded liabilities.
SERS was just 38 percent funded in 2020, meaning the system had only 38 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $19 billion in assets by its $50 billion in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If SERS were run by a private sector company, it would be declared insolvent several times over.
SERS’ funded ratio has declined significantly since the year 2000, falling from 82 percent to 34 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to materially improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into SERS every year.
State appropriations to SERS are now 7.5 times bigger than they were two decades ago. Illinoisans paid $2.4 billion into the funds in 2021, compared to just $300 million in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers.
In 2000, taxpayer contributions to SERS were about double that of employee contributions, $341 million vs. $165 million. Today, taxpayers are contributing nearly nine times more than employees, $2.4 billion vs. $270 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to state workers have grown to $50 billion in 2020, up from $3 billion in 2000. That’s an increase of nearly 1,400 percent, 4.6 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active workers in SERS has fallen from 81,000 to 63,000 between 2000 and 2020, down 22 percent. And the number of retirees has increased dramatically, growing to nearly 62,000 in 2020 from 30,000 in 2000, up more than 100 percent.
There are now just a little over one active workers for every retiree compared to 2.7 in 2000.
The average salary for SERS members has grown by more than 70 percent over the last two decades. In 2000, the average state worker salary equaled nearly $42,000. By 2020, it had grown to $72,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average state worker pension equaled nearly $13,500. By 2020, it had grown to nearly $41,000 – plus Social Security benefits.
By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that state workers receive. The general average includes retirees who only worked for the state of Illinois for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career state worker (retired after 1/1/2017 with 30 or more years of service) is $54,000 plus Social Security.
In 2020, SERS sent out $2.9 billion in benefit checks to retirees. That amount will grow to $5 billion a year by 2045. In total, SERS will pay out nearly $110 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $50 billion set aside today in order to make those $110 billion in future payments. That $50 billion is called the state’s accrued liability.
SERS is in crisis because the fund doesn't have that $50 billion on hand. Instead, the fund only has $19 billion in assets. The $31 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. SERS’ pension shortfall will continue to worsen through 2026 and will only fall below its current level of $31 billion by 2031.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of SERS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the State Universities’ Retirement Fund, the pension fund for all employees of Illinois’ public universities and colleges.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of SURS is likely far worse than what is shown below.
The officially-reported shortfall of the State Universities’ Retirement System grew to $28 billion in 2020, up $1.3 billion from the year before.
SURS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($48 billion in accrued liabilities) and the money they have on hand ($20 billion in assets). Learn more about unfunded liabilities.
SURS was just 41 percent funded in 2020, meaning the system had only 41 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $20 billion in assets by its $48 billion in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If SURS were run by a private sector company, it would be declared insolvent several times over.
SURS’ funded ratio has declined significantly since the year 2000, falling from 88 percent to only 42 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into SURS every year.
State appropriations to SURS are now nine times bigger than they were two decades ago. Illinoisans paid $2.0 billion into the funds in 2021, compared to just $225 million in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers.
In 2000, taxpayer contributions to SURS were nearly equal to employee contributions, $225 million vs. $238 million. Today, taxpayers are contributing nearly five times more than employees, $1.9 billion vs. $380 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to teachers have grown to $48 billion in 2020, up from $4 billion in 1987. That’s an increase of more than 1,000 percent, 3 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active workers in SURS fell from 72,000 to 63,000 between 2000 and 2020, down 13 percent. Meanwhile, the number of retirees has increased dramatically, growing to 59,000 in 2020 from 24,000 in 2000, up 150 percent. There are now just a little over one active workers for every retiree compared to 3 in 2000.
The average salary for SURS members has grown by more than 67 percent over the last two decades. In 2000, the average university worker salary equaled a bit more than $33,000. By 2020, it had grown to nearly $56,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average university worker pension equaled nearly $22,000. By 2020, it had grown to over $41,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that university workers receive. The general average includes retirees who only worked for Illinois universities for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career university worker (retired after 1/1/2017 with 30 or more years of service) is $71,300.
In 2020, SURS sent out $2.9 billion in benefit checks to retirees. That amount will grow to $4.4 billion a year by 2045. In total, SURS will pay out more than $100 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $48 billion set aside today in order to make those $100 billion in future payments. That $48 billion is called the state’s accrued liability.
SURS is in crisis because the fund doesn't have that $48 billion on hand. Instead, the fund only has $20 billion in assets. The $28 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. SURS’ pension shortfall will continue to worsen through 2026 and will only fall below its current level by 2030.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of SURS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the Judges’ Retirement Fund, the pension fund for judges in the state of Illinois.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of JRS is likely far worse than what is shown below.
The officially-reported shortfall of the Judges’ Retirement System grew to $1.74 billion in 2020, up $20 million from the year before.
JRS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($2.85 billion in accrued liabilities) and the money they have on hand ($1.1 billion in assets). Learn more about unfunded liabilities.
JRS was just 39 percent funded in 2020, meaning the system had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $1.1 billion in assets by its $2.85 billion in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If JRS were run by a private sector company, it would be declared insolvent several times over.
JRS’ funded ratio has declined since the year 2000, falling from 48 percent to only 31 percent in 2009. Despite Illinoisans contributing hundreds of millions in additional dollars over the past two decades (see below), the health of the fund has failed to materially improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into JRS every year.
State appropriations to JRS are now six times bigger than they were two decades ago. Illinoisans paid $1.9 billion into the funds in 2021, compared to just $225 million in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active judges.
In 2000, taxpayer contributions to JRS were nearly double employee contributions, $21 million vs. $12 million. Today, taxpayers are contributing nearly five times more than judges, $144 million vs. $15 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to judges (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to judges grew to $2.9 billion in 2020, up from $300 million in 1987. That’s an increase of more than 800 percent, almost 3 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active judges in JRS has been stable over the last 20 years, equaling 947 in 2020. Meanwhile, the number of retirees has increased dramatically, growing to 931 in 2020 from 476 in 2000, up 95 percent. There are now just a little over one active workers for every retiree compared to 1.9 in 2000.
The average salary for JRS members has grown by more than 78 percent over the last two decades. In 2000, the average judge salary equaled more than $114,000. By 2020, it had grown to over $204,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average judge pension equaled more than $72,000. By 2020, it had grown to nearly $150,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that judges receive. The general average includes retirees who only worked in the Illinois court system for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (20 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career judge (retired after 1/1/2017 with 20 or more years of service) is $175,000.
In 2020, JRS sent out $179 million in benefit checks to retirees. That amount will grow to $239 million a year by 2045. In total, JRS will pay out more than $6.1 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $2.85 billion set aside today in order to make those $6.1 billion in future payments. That $2.85 billion is called the state’s accrued liability.
SURS is in crisis because the fund doesn't have that $2.85 billion on hand. Instead, the fund only has $1.1 billion in assets. The $1.74 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of JRS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the General Assembly Retirement Fund (GARS), the pension fund for lawmakers in the state of Illinois.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of GARS is likely far worse than what is shown below.
The officially-reported shortfall of the General Assembly Retirement System fell slightly to $311 million in 2020, down $4 million from the year before.
GARS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($374 million in accrued liabilities) and the money they have on hand ($63 million in assets). Learn more about unfunded liabilities.
GARS was just 17 percent funded in 2020, meaning the system had only 17 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $63 million in assets by its $374 million in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If GARS were run by a private sector company, it would be declared insolvent several times over.
GARS’ funded ratio has declined since the year 2000, falling from 42 percent to only 23 percent in 2009. Despite Illinoisans contributing millions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into GARS every year.
State appropriations to GARS are now six times bigger than they were two decades ago. Illinoisans paid $27.3 billion into the funds in 2021, compared to just $4.4 million in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active lawmakers.
In 2000, taxpayer contributions to GARS were already three times that of employee contributions, $3.9 million vs. $1.3 million. Today, taxpayers are contributing over 20 times more than lawmakers, $25.8 million vs. $1.2 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to lawmakers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to lawmakers grew to $374 million in 2020, up from $60 million in 1987. That’s an increase of more than 500 percent, nearly double the growth of Illinois’ economy over the same period. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active members in GARS has fallen significantly over the years as more and more lawmakers have elected to not participate in the fund. In 2020, there were 124 active lawmakers, down from 181 in 2000. Meanwhile, the number of retirees has increased dramatically, growing to 318 in 2020 from 221 in 2000, up over 40 percent. There are now less than 0.4 active lawmakers for every retiree in GARS.
The average salary for GARS members has grown nearly 30 percent over the last two decades. In 2000, the average lawmaker salary equaled more than $65,500. By 2020, it had grown to over $82,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average lawmaker pension equaled just under $32,500. By 2020, it had grown to nearly $65,500. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that lawmakers receive. The general average includes retirees who only served in Illinois for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (20 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career lawmaker (retired after 1/1/2017 with 20 or more years of service) is nearly $90,000.
In 2020, GARS sent out more than $27 million in benefit checks to retirees. That amount will grow to $23 million a year by 2045. In total, GARS will pay out more than $700 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $374 million set aside today in order to make those $700 million in future payments. That $374 billion is called the state’s accrued liability.
GARS is in crisis because the fund doesn't have that $374 million on hand. Instead, the fund only has $63 million in assets. The $311 million difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of GARS pensions will likely be far larger than what is shown below.
[/vc_column_text][/vc_tta_section][/vc_tta_tabs] The State of Illinois manages five separate pension systems for state workers (SERS), university employees (SURS), judges (JRS), lawmakers (GARS) and teachers (TRS) outside Chicago. All five pension funds are extremely unhealthy. In fact, under most measures, Illinoisans are suffering under the worst pension crisis in the nation. The graphics below are largely taken from the Commission on Government Forecasting and Accountability, which publishes the state’s official pension numbers. Those official numbers, including the state’s 2020 pension shortfall of $144 billion – are based on the state actuaries’ rosy assumptions (for example, assuming an investment rate of return close to 7 percent). Other financial institutions use more realistic assumptions to calculate Illinois’ pension health. Moody’s Investors Service, for example, calculates that the state’s true pension shortfall is $330 billion. Please keep in mind that the official data shown is based on the state’s assumptions. The true state of Illinois pensions is likely far worse than what is shown below. The officially-reported shortfall of Illinois’ five state-run pension funds grew to $144 billion in 2020, up $7 billion from the year before. Illinois’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($236 billion in accrued liabilities) and the money they have on hand ($92 billion in assets). Learn more about unfunded liabilities.
The $83 billion shortfall in the Teachers Retirement System (TRS) makes up more than half (57 percent) of the debt owed by the state. The State Employee Retirement System (SERS) has a shortfall of $31 billion – equal to 21 percent of the total debt. The State Universities Retirement System shortfall is $30 billion, or 20 percent of the total. The Judge's Retirement System (JRS) and the General Assembly Retirement System (GARS) are far smaller funds with a combined shortfall of $2 billion.
The combined funded ratio of the five state funds was just 39 percent in 2020, meaning the funds had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the funds’ $92 billion in assets by their $236 billion in accrued liabilities. A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover. If Illinois’ funds were run by a private sector company, they would be declared insolvent several times over.
The state’s combined pension funded ratio has declined significantly since the year 2000, falling from 76 percent to less than 39 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of funds has failed to improve since then.
Four of the five pension systems have stagnated at about 40 percent funding for over a decade. GARS is the exception. At only 17 percent funded, lawmaker pensions need a taxpayer bailout every year to keep from running out of money entirely.
Illinois’ pension crisis continues to worsen despite taxpayers pouring hundreds of millions of additional dollars into the funds every year. State appropriations to the pension funds are now eight times bigger than they were two decades ago. Illinoisans paid $9.8 billion into the funds in 2021, compared to just $1.2 billion in 2000. The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds. Those bonds won’t be fully paid off until 2033.
TRS receives the largest share of state taxpayer contributions, over $4.8 billion in 2020. That’s followed by SERS with $2.4 billion, SURS with $1.9 billion, JRS with $144 million, and GRS with $26 million.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers. As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers. In 2000, taxpayer contributions were nearly equal to employee contributions, $1.2 billion vs. $1 billion. Today, taxpayers are contributing five times more than employees, $9.2 billion vs. $1.7 billion.
Opponents of reform like to blame the pension crisis on underfunding – they say that taxpayers haven’t paid enough into the pension funds. But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis. Total pension promises owed to state workers have grown to $236 billion in 2020, up from $18 billion in 1987. That’s an increase of more than 1,200 percent, 4 times bigger than the growth in Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on the pension funds’ health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the funds’ finances stable. The number of active workers has remained largely constant at about 260,000 people. However, the number of retirees has increased dramatically, growing to over 235,000 in 2020 from 100,000 in 2000. There are now just 1.1 active workers for every retiree compared to 2.5 in 2000.
The combined average salary for workers in the five funds has grown by more than 60 percent over the last two decades. In 2000, the average public worker salary equaled $43,000. By 2020, it had grown to nearly $71,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits. In 2000, the average state pension equaled nearly $27,000. By 2020, it had grown to nearly $51,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that state workers receive. The general average includes retirees who only worked for the state for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job. With all other non-career retirees removed, the annual pension for a recently retired, career state worker averaged across all five state funds is $70,600. Career Illinois teachers receive an annual pension of over $79,000. Career university workers’ average pension totals over $71,000. And former state workers receive a $54,000 pension, plus Social Security benefits (over 95 percent of SERS members are also enrolled in Social Security).
In 2020, the five state pension funds sent out $13 billion in benefit checks to retirees. That amount will grow to $25 billion a year by 2045. In total, the pension funds will pay out $506 billion in benefits through 2045. The actuaries of the pension funds calculate the state needs $236 billion set aside today in order to make those $506 billion in future payments. That $236 billion is called the state’s accrued liability. Illinois pensions are in crisis because they don’t have that $236 billion on hand. Instead, they only have $92 billion in assets. The $144 billion difference between assets and accrued liabilities is the state’s official unfunded liability.
Illinois’ rapid growth in taxpayer pension contributions (see above) continues to crowd out spending on other vital state services like transportation, healthcare and public safety. The state’s pension costs skyrocketed as a share of the state’s budget in 2012 and have remained high ever since. The Commission on Government Forecasting and Accountability estimates that pension contributions will continue to consume a quarter of the budget for the next 25 years. No other state in the country has as much of its budget devoted to pension costs.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years – and will continue to swallow at least a quarter of Illinois’ budget (see above). The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. The state’s pension shortfall will continue to worsen through 2027 and will only fall below $144 billion by 2034 Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of Illinois pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the Teachers’ Retirement Fund, the pension fund for all teachers and administrators in school districts other than Chicago Public Schools. CPS has its own separate pension fund. The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of TRS pensions is likely far worse than what is shown below. The officially-reported shortfall of the Teachers’ Retirement System grew to $83 billion in 2020, up $5 billion from the year before. TRS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($136 billion in accrued liabilities) and the money they have on hand ($52 billion in assets). Learn more about unfunded liabilities.
TRS was just 39 percent funded in 2020, meaning the system had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $52 billion in assets by its $136 billion in accrued liabilities. A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover. If TRS were run by a private sector company, it would be declared insolvent several times over.
TRS’ funded ratio has declined significantly since the year 2000, falling from 68 percent to 39 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into TRS every year. State appropriations to TRS are now eight times bigger than they were two decades ago. Illinoisans paid $5.1 billion into the funds in 2021, compared to just $0.6 billion in 2000. The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers. As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers. In 2000, taxpayer contributions to TRS were nearly equal to employee contributions, $630 million vs. $620 million. Today, taxpayers are contributing nearly five times more than employees, $4.8 billion vs. $1.0 billion.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds. But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis. Total pension promises owed to teachers have grown to $136 billion in 2020, up from $10 billion in 1987. That’s an increase of more than 1,200 percent, 4 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable. The number of active workers in TRS has grown from 123,000 to 138,000 between 2000 and 2020, up 12 percent. However, the number of retirees has increased far more dramatically, growing to nearly 113,000 in 2020 from 54,000 in 2000, up more than 100 percent. There are now just 1.2 active workers for every retiree compared to 2.1 in 2000.
The average salary for TRS members has grown by more than 50 percent over the last two decades. In 2000, the average teacher salary equaled just over $50,000. By 2020, it had grown to $76,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits. In 2000, the average teacher pension equaled over $25,000. By 2020, it had grown to over $60,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that teachers receive. The general average includes retirees who only worked for Illinois school districts for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers. The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job. With all other non-career retirees removed, the annual pension for a recently retired, career teacher (retired after 1/1/2017 with 30 or more years of service) is $79,400.
In 2020, TRS sent out $7.1 billion in benefit checks to retirees. That amount will grow to $15.2 billion a year by 2045. In total, TRS will pay out more than $290 billion in benefits through 2045. The actuaries of the pension funds calculate the state needs $136 billion set aside in order to make those $290 billion in future payments. That $136 billion is called the state’s accrued liability. TRS is in crisis because the fund doesn't have that $136 billion on hand. Instead, the fund only has $52 billion in assets. The $83 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years. The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. TRS’ pension shortfall will continue to worsen through 2028 and will only fall below its current level by 2035. Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of TRS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the State Employees' Retirement Fund, the pension fund for all employees of the State of Illinois. The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of SERS is likely far worse than what is shown below. The officially-reported shortfall of the State Employees' Retirement System grew to $31 billion in 2020, up $700 million from the year before. SERS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($50 billion in accrued liabilities) and the money they have on hand ($19 billion in assets). Learn more about unfunded liabilities.
SERS was just 38 percent funded in 2020, meaning the system had only 38 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $19 billion in assets by its $50 billion in accrued liabilities. A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover. If SERS were run by a private sector company, it would be declared insolvent several times over.
SERS’ funded ratio has declined significantly since the year 2000, falling from 82 percent to 34 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to materially improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into SERS every year. State appropriations to SERS are now 7.5 times bigger than they were two decades ago. Illinoisans paid $2.4 billion into the funds in 2021, compared to just $300 million in 2000. The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligation Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers. As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers. In 2000, taxpayer contributions to SERS were about double that of employee contributions, $341 million vs. $165 million. Today, taxpayers are contributing nearly nine times more than employees, $2.4 billion vs. $270 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds. But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis. Total pension promises owed to state workers have grown to $50 billion in 2020, up from $3 billion in 2000. That’s an increase of nearly 1,400 percent, 4.6 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable. The number of active workers in SERS has fallen from 81,000 to 63,000 between 2000 and 2020, down 22 percent. And the number of retirees has increased dramatically, growing to nearly 62,000 in 2020 from 30,000 in 2000, up more than 100 percent. There are now just a little over one active workers for every retiree compared to 2.7 in 2000.
The average salary for SERS members has grown by more than 70 percent over the last two decades. In 2000, the average state worker salary equaled nearly $42,000. By 2020, it had grown to $72,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits. In 2000, the average state worker pension equaled nearly $13,500. By 2020, it had grown to nearly $41,000 – plus Social Security benefits. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that state workers receive. The general average includes retirees who only worked for the state of Illinois for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers. The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job. With all other non-career retirees removed, the annual pension for a recently retired, career state worker (retired after 1/1/2017 with 30 or more years of service) is $54,000 plus Social Security.
In 2020, SERS sent out $2.9 billion in benefit checks to retirees. That amount will grow to $5 billion a year by 2045. In total, SERS will pay out nearly $110 billion in benefits through 2045. The actuaries of the pension funds calculate the state needs $50 billion set aside today in order to make those $110 billion in future payments. That $50 billion is called the state’s accrued liability. SERS is in crisis because the fund doesn't have that $50 billion on hand. Instead, the fund only has $19 billion in assets. The $31 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years. The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. SERS’ pension shortfall will continue to worsen through 2026 and will only fall below its current level of $31 billion by 2031. Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of SERS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the State Universities’ Retirement Fund, the pension fund for all employees of Illinois’ public universities and colleges. The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of SURS is likely far worse than what is shown below. The officially-reported shortfall of the State Universities’ Retirement System grew to $28 billion in 2020, up $1.3 billion from the year before. SURS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($48 billion in accrued liabilities) and the money they have on hand ($20 billion in assets). Learn more about unfunded liabilities.
SURS was just 41 percent funded in 2020, meaning the system had only 41 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $20 billion in assets by its $48 billion in accrued liabilities. A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover. If SURS were run by a private sector company, it would be declared insolvent several times over.
SURS’ funded ratio has declined significantly since the year 2000, falling from 88 percent to only 42 percent in 2009. Despite Illinoisans contributing billions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into SURS every year. State appropriations to SURS are now nine times bigger than they were two decades ago. Illinoisans paid $2.0 billion into the funds in 2021, compared to just $225 million in 2000. The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers. As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active state workers. In 2000, taxpayer contributions to SURS were nearly equal to employee contributions, $225 million vs. $238 million. Today, taxpayers are contributing nearly five times more than employees, $1.9 billion vs. $380 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds. But the pension promises to state workers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis. Total pension promises owed to teachers have grown to $48 billion in 2020, up from $4 billion in 1987. That’s an increase of more than 1,000 percent, 3 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable. The number of active workers in SURS fell from 72,000 to 63,000 between 2000 and 2020, down 13 percent. Meanwhile, the number of retirees has increased dramatically, growing to 59,000 in 2020 from 24,000 in 2000, up 150 percent. There are now just a little over one active workers for every retiree compared to 3 in 2000.
The average salary for SURS members has grown by more than 67 percent over the last two decades. In 2000, the average university worker salary equaled a bit more than $33,000. By 2020, it had grown to nearly $56,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits. In 2000, the average university worker pension equaled nearly $22,000. By 2020, it had grown to over $41,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that university workers receive. The general average includes retirees who only worked for Illinois universities for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers. The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (30 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job. With all other non-career retirees removed, the annual pension for a recently retired, career university worker (retired after 1/1/2017 with 30 or more years of service) is $71,300. In 2020, SURS sent out $2.9 billion in benefit checks to retirees. That amount will grow to $4.4 billion a year by 2045. In total, SURS will pay out more than $100 billion in benefits through 2045. The actuaries of the pension funds calculate the state needs $48 billion set aside today in order to make those $100 billion in future payments. That $48 billion is called the state’s accrued liability. SURS is in crisis because the fund doesn't have that $48 billion on hand. Instead, the fund only has $20 billion in assets. The $28 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years. The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. The ramp’s required payments are far lower than what the state’s actuaries say is needed to keep the funds healthy. That fact can be seen in the projected funding table below. SURS’ pension shortfall will continue to worsen through 2026 and will only fall below its current level by 2030. Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of SURS pensions will likely be far larger than what is shown below.
The State of Illinois manages five separate pension systems for state workers. The data below covers the Judges’ Retirement Fund, the pension fund for judges in the state of Illinois. The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of JRS is likely far worse than what is shown below. The officially-reported shortfall of the Judges’ Retirement System grew to $1.74 billion in 2020, up $20 million from the year before. JRS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($2.85 billion in accrued liabilities) and the money they have on hand ($1.1 billion in assets). Learn more about unfunded liabilities.
JRS was just 39 percent funded in 2020, meaning the system had only 39 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $1.1 billion in assets by its $2.85 billion in accrued liabilities. A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover. If JRS were run by a private sector company, it would be declared insolvent several times over.
JRS’ funded ratio has declined since the year 2000, falling from 48 percent to only 31 percent in 2009. Despite Illinoisans contributing hundreds of millions in additional dollars over the past two decades (see below), the health of the fund has failed to materially improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into JRS every year. State appropriations to JRS are now six times bigger than they were two decades ago. Illinoisans paid $1.9 billion into the funds in 2021, compared to just $225 million in 2000. The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers. As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active judges. In 2000, taxpayer contributions to JRS were nearly double employee contributions, $21 million vs. $12 million. Today, taxpayers are contributing nearly five times more than judges, $144 million vs. $15 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds. But the pension promises to judges (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis. Total pension promises owed to judges grew to $2.9 billion in 2020, up from $300 million in 1987. That’s an increase of more than 800 percent, almost 3 times bigger than the growth of Illinois’ economy. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable. The number of active judges in JRS has been stable over the last 20 years, equaling 947 in 2020. Meanwhile, the number of retirees has increased dramatically, growing to 931 in 2020 from 476 in 2000, up 95 percent. There are now just a little over one active workers for every retiree compared to 1.9 in 2000.
The average salary for JRS members has grown by more than 78 percent over the last two decades. In 2000, the average judge salary equaled more than $114,000. By 2020, it had grown to over $204,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits. In 2000, the average judge pension equaled more than $72,000. By 2020, it had grown to nearly $150,000. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that judges receive. The general average includes retirees who only worked in the Illinois court system for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers. The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (20 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job. With all other non-career retirees removed, the annual pension for a recently retired, career judge (retired after 1/1/2017 with 20 or more years of service) is $175,000.
In 2020, JRS sent out $179 million in benefit checks to retirees. That amount will grow to $239 million a year by 2045. In total, JRS will pay out more than $6.1 billion in benefits through 2045. The actuaries of the pension funds calculate the state needs $2.85 billion set aside today in order to make those $6.1 billion in future payments. That $2.85 billion is called the state’s accrued liability. SURS is in crisis because the fund doesn't have that $2.85 billion on hand. Instead, the fund only has $1.1 billion in assets. The $1.74 billion difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years. The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis. Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of JRS pensions will likely be far larger than what is shown below.
The graphics below are largely taken from the Commission on Government Forecasting and Accountability. COGFA publishes the state’s official pension numbers which are based on the state actuaries’ rosy assumptions. The true state of GARS is likely far worse than what is shown below.
The officially-reported shortfall of the General Assembly Retirement System fell slightly to $311 million in 2020, down $4 million from the year before.
GARS’ pension shortfall, also called unfunded liabilities, is the difference between the benefits the pension funds owe to workers ($374 million in accrued liabilities) and the money they have on hand ($63 million in assets). Learn more about unfunded liabilities.
GARS was just 17 percent funded in 2020, meaning the system had only 17 cents on hand for every dollar needed to pay out future benefits. The funded ratio is calculated by dividing the fund’s $63 million in assets by its $374 million in accrued liabilities.
A healthy pension system is 100 percent funded. Any funding less than 60 percent is often seen as a point of no return, or a tipping point, from which pension funds can’t recover.
If GARS were run by a private sector company, it would be declared insolvent several times over.
GARS’ funded ratio has declined since the year 2000, falling from 42 percent to only 23 percent in 2009. Despite Illinoisans contributing millions in additional dollars over the past two decades (see below), the health of the fund has failed to improve since then.
Illinois’ pension crisis continues to worsen despite taxpayers pouring millions of additional dollars into GARS every year.
State appropriations to GARS are now six times bigger than they were two decades ago. Illinoisans paid $27.3 billion into the funds in 2021, compared to just $4.4 million in 2000.
The 2004 spike in appropriations was due to the state contributing $7.3 billion dollars worth of Pension Obligations Bonds to the five state funds. Those bonds won’t be fully paid off until 2033.
Illinois doesn’t require government employees to pay more toward their pensions when the funds experience shortfalls. Instead, the entire burden is placed on taxpayers.
As Illinois’ pension crisis has worsened, taxpayer contributions have soared compared to the contributions of active lawmakers.
In 2000, taxpayer contributions to GARS were already three times that of employee contributions, $3.9 million vs. $1.3 million. Today, taxpayers are contributing over 20 times more than lawmakers, $25.8 million vs. $1.2 million.
Opponents of reform like to blame the pension crisis on underfunding – that taxpayers haven’t paid enough into the pension funds.
But the pension promises to lawmakers (accrued liabilities) have grown so fast, and have become so generous, that taxpayer funding could never keep up with them. Overpromising, not underfunding, is the real cause of Illinois’ pension crisis.
Total pension promises owed to lawmakers grew to $374 million in 2020, up from $60 million in 1987. That’s an increase of more than 500 percent, nearly double the growth of Illinois’ economy over the same period. Learn more about the growth of Illinois’ pension promises.
Member demographics have a significant impact on a pension fund’s health. The more retirees there are receiving benefits versus workers making contributions, the more state taxpayer contributions are needed to keep the fund’s finances stable.
The number of active members in GARS has fallen significantly over the years as more and more lawmakers have elected to not participate in the fund. In 2020, there were 124 active lawmakers, down from 181 in 2000. Meanwhile, the number of retirees has increased dramatically, growing to 318 in 2020 from 221 in 2000, up over 40 percent. There are now less than 0.4 active lawmakers for every retiree in GARS.
The average salary for GARS members has grown nearly 30 percent over the last two decades. In 2000, the average lawmaker salary equaled more than $65,500. By 2020, it had grown to over $82,000. By comparison, the median earnings of Illinois private sector workers was just $26,000 in 2000 and $39,000 in 2020.
Growing salaries result in growing pension benefits.
In 2000, the average lawmaker pension equaled just under $32,500. By 2020, it had grown to nearly $65,500. By comparison, the average Social Security benefits of Illinois private sector retirees grew from $11,700 in 2000 to $20,000 in 2019.
It’s important to note that the “average pension” shown above does not reflect the true generosity of the benefits that lawmakers receive. The general average includes retirees who only served in Illinois for a few years – and who therefore earned retirement benefits from other private or public sector jobs over their careers.
The best way to measure the true value of Illinois pensions is to only look at the benefits of retirees that spend a full career (20 years or more) working for the government and are unlikely to have earned additional retirement benefits from another job.
With all other non-career retirees removed, the annual pension for a recently retired, career lawmaker (retired after 1/1/2017 with 20 or more years of service) is nearly $90,000.
In 2020, GARS sent out more than $27 million in benefit checks to retirees. That amount will grow to $23 million a year by 2045. In total, GARS will pay out more than $700 billion in benefits through 2045.
The actuaries of the pension funds calculate the state needs $374 million set aside today in order to make those $700 million in future payments. That $374 billion is called the state’s accrued liability.
GARS is in crisis because the fund doesn't have that $374 million on hand. Instead, the fund only has $63 million in assets. The $311 million difference between assets and accrued liabilities is the fund’s official unfunded liability.
Illinois law requires the state to contribute to the state’s pension funds via a payment schedule known as the “funding ramp.” The goal of the ramp is for the state to make bigger and bigger contributions each year until the five funds reach a funding ratio of 90 percent by 2045. Achieving that goal will require a constant increase in taxpayer funding for the next 25 years.
The funding ramp has been heavily criticized by Moody’s and other financial institutions for worsening the state’s pension crisis.
Again, keep in mind that the projection below is based on the state’s rosy assumptions. The true cost of GARS pensions will likely be far larger than what is shown below.