Public Pensions

Asset transfers to the state pension systems: Six questions to be answered

Release: February 18, 2019

One idea that has been proposed by a number of observers to repay some of Illinois’ pension debt is an “asset transfer.” Under this proposal, the state (or the City of Chicago, which is also facing a large pension debt problem) would make a contribution to the pension systems in the form of a publicly owned property, such as a tollway or lottery, rather than in the form of cash.

Addressing Illinois’ Pension Debt Crisis With Reamortization

Release: May 21, 2018

Illinois' five state pension systems face a debt crisis after years of intentional borrowing from state contributions. The crisis is compounded by a backloaded repayment plan that calls for unrealistic, unsustainable state contributions in future years, putting funding for crucial public services at risk. Because the crisis is about debt, rather than benefits being earned by current and future employees, attempts to solve the problem through benefit cuts have failed.

Three Problems With Gov. Rauner’s FY2019 Pension And Retirement Proposals

Release: February 16, 2018

This week, Gov. Bruce Rauner gave his fiscal year (FY) 2019 budget address, revealing his revenue and expenditure proposals for the upcoming year. The governor’s proposal relies on $1.5 billion in cost reductions to balance the budget, including:

Pension Changes in the FY2018 Budget: Short-Term Savings and Long-Term Costs

Release: October 10, 2017

The changes made to Illinois public pension systems in Public Act (PA) 100-0023 (introduced as Senate Bill 42), the Budget Implementation Act, or BIMP, passed on July 6, 2017, and include two primary elements. First, the BIMP creates a new Tier 3 level of benefits for public sector workers. Second, the BIMP permits the state to smooth out the fiscal impact of the actuarial reduction in the assumed rate of return generated by the state’s five pension systems.

New Details Emerge on Illinois' "Tier 3" Pension Plan

Release: September 27, 2017

Illinois' fiscal year 2018 budget introduced major changes to the state's public pension systems in an attempt to grapple with Illinois' roughly $130 billion in unfunded liabilities. One of the most important aspects of these changes was a new package of benefits. This new package, called "Tier 3," introduced a hybrid defined benefit-defined contribution plan in addition to the defined benefit plans of Tier 1 and Tier 2.

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