Illinois carries the worst-funded public pension system in America: a $143.5 billion unfunded liability across five state retirement systems, built up over a century of underfunded promises. This page walks through how the systems work, what the numbers show, how Illinois compares to every other state, and what's before the General Assembly right now.
Illinois runs five separate state-run retirement systems on top of 667 total government pension funds statewide. Before the debt numbers, here's how the systems were built, and how benefits are actually calculated.
Illinois established its key pension systems during this period: the Teachers' Retirement System (TRS), State Universities Retirement System (SURS), State Employees' Retirement System (SERS), General Assembly Retirement System (GARS), and Judges' Retirement System (JRS).
The Illinois Constitution guaranteed that public pension benefits cannot be "diminished or impaired" (Article XIII, Section 5), making it extremely difficult for the state to reduce benefits already promised, even to address a growing debt.
The state consistently contributed less than actuarially recommended amounts to its pension systems, causing pension debt to grow steadily for two decades.
Illinois adopted a funding schedule, known as the Edgar Ramp, targeting 90% funding by 2045, with state contributions increasing gradually over time. This schedule still governs pension funding today (see Future Outlook).
Reduced state contributions and investment losses during the Great Recession significantly increased Illinois's unfunded pension liabilities.
Illinois created Tier II benefits for new employees, made more consistent contributions, and modestly improved funding levels, though unfunded liabilities remain among the highest in the nation.
Illinois state and local government pensions are divided into two primary benefit tiers, based entirely on hire date.
Tier II was created through pension reform legislation to reduce future pension costs.
First year of retirement: Benefit = Final Average Salary × Multiplier Percentage × Years of Service.
Every subsequent year: Benefit = Prior Year Benefit + (Prior Year Benefit × Automatic Annual Increase).
Pensions are the third-largest category of Illinois General Funds spending, behind only Education and Human Services, and ahead of Healthcare and every other category of state government.
Illinois has a total of 667 government pension funds, serving more than one million active and retired public employees. The vast majority are small local police and firefighter funds; the five state-run systems below are the most consequential.
Illinois' pension debt remains among the highest in the nation. Here's how the unfunded liability has grown since 2011, who it's owed to, and what the state actually spends each year to keep the systems running.
Illinois' pension debt remains among the highest in the nation, with the unfunded ratio consistently exceeding 50% since 2012. As of FY2025, the state-run pension systems' unfunded liabilities totaled approximately $143.5 billion.
"Unfunded ratio" here is the share of total accrued pension liability not covered by plan assets, as reported by COGFA (52.2% for FY2025). Section 3's national comparison instead uses Equable Institute's "funded ratio" (52% for FY2024) — a related but distinct measure, from a different source and fiscal year, with roughly a 4-point gap once put on the same basis. The two numbers are not directly comparable despite looking similar.
TRS consistently accounted for the largest share of Illinois' unfunded pension liability, and by FY2024 carried more unfunded debt than the other four systems combined.
Reconstructed from a COGFA chart image embedded in the source presentation; values are approximate.
Across all five systems, Illinois reported 890,369 total members, including 285,502 annuitants, as of June 30, 2024.
TRS receives the largest FY2026 pension appropriation at approximately $6.5 billion (55%). SERS receives the second-largest share at approximately $2.7 billion (23%), followed by SURS at approximately $2.3 billion (20%).
By nearly every national measure, funded ratio, per-capita debt, or share of state GDP, Illinois carries the heaviest public pension debt burden of any state in the country.
In FY2024, Illinois' public pension systems had a funded ratio of 52%, the lowest among all U.S. states.
| State | FY2024 Funded Ratio |
|---|---|
| Illinois | 52% |
| Kentucky | 54% |
| New Jersey | 57% |
| Mississippi | 57% |
| Hawaii | 63% |
Top 5 states with the worst public pension funded ratios. Source: Equable Institute.
TRS, SERS, and JRS all ranked among the nation's ten worst-funded public pension systems in 2024: 3 of Illinois' 5 state systems made the list.
Ranking of 175 U.S. public pension systems by 2024 funded ratio, bottom 10 shown. Source: Equable Institute, State of Pensions 2025, via Illinois Policy.
Illinois' unfunded pension liabilities represent the largest share of state GDP in the nation, at roughly 19%, more than double the next-highest large state, while also carrying one of the lowest funded ratios of any state.
Approximate values read from a published scatter chart; illustrative subset of states shown, not the full 50-state dataset.
Illinois' unfunded pension liabilities reached $200.87 billion in FY2024, joining California as the only two states with pension debt exceeding $200 billion. This figure, from Reason Foundation, combines the state-run systems with Illinois's roughly 660 local police, firefighter, and municipal pension funds — a broader scope than the $143.5 billion "Big Five" state-run total discussed above.
| State | Unfunded Pension Liabilities (FY2024) |
|---|---|
| California | $264.71B |
| Illinois | $200.87B |
| New Jersey | $92.04B |
| Texas | $91.10B |
| Pennsylvania | $66.59B |
Top 5 states by total unfunded pension liabilities. Source: Reason Foundation.
Illinois carries the highest unfunded public pension liabilities per capita in the nation, with $15,804 in pension debt for every resident. This is more than 55% higher than Connecticut, the second-highest state, at $10,151.
Illinois is already short of its own actuarial recommendations today, and the legislatively mandated funding schedule requires state contributions to keep climbing for the next two decades.
| TRS | SERS | SURS | JRS | GARS | Total | |
|---|---|---|---|---|---|---|
| Actuarial Recommendation | $11.1B | $3.01B | $2.64B | $162.0M | $27.9M | $17.0B |
| Passed State Appropriation | $6.74B | $2.35B | $2.38B | $154.1M | $25.6M | $11.6B |
| Difference | $4.40B | $661.4M | $264.2M | $7.90M | $2.30M | $5.40B |
Source: Illinois House Bill 131 and COGFA.
The Edgar Ramp is a legislatively mandated funding program for Illinois' pension systems, adopted in 1995. It requires Illinois to continually increase payments into the funds, with the goal of reaching a 90% funded ratio by 2045. Staying on schedule requires significant, and increasing, financial commitments every year between now and then.
According to COGFA projections, to achieve 90% funding by FY2045, annual state pension contributions must increase 59%, from $11.7 billion in FY2026 to $18.6 billion in FY2045, raising concerns about future state revenue capacity.
Senator Balkema has co-sponsored 10 pension-related bills this session, ranging from defined-contribution alternatives to benefit-transfer restrictions and accelerated lump-sum buyout options.
Requires all five state-funded retirement systems to create defined contribution plans by July 1, 2028, letting employees choose between DC and the existing pension plans. New employees would not be required to join the pension system.
Requires the State Employees' Retirement System to create a defined contribution retirement plan by July 1, 2027, allowing employees to choose between it and the existing defined benefit plan. New hires would not be required to participate in the pension system.
Allows public pension members to take an accelerated lump-sum payment in exchange for reduced future benefits, authorizes $700 million in state bonds to fund payments, and allows the state to withhold local government funds to cover bond debt service. Effective immediately.
Allows public safety and municipal pension members to choose an accelerated lump-sum payout in exchange for reduced future benefits. Large counties and municipalities are required to offer the option and make annual contributions to support it. Classified as an unfunded mandate.
Every pension-related bill Senator Balkema has co-sponsored this session. Search by bill number or keyword below.
| Bill | What It Does |
|---|---|
| HB0079 | Sheriff's Law Enforcement Annuitant ReemploymentRequires annuitants receiving a sheriff's law enforcement employee annuity to be considered a participating employee if they return to work as a school security guard with a participating employer for more than 999 hours annually. |
| HB1648 | Firefighter Pension Benefit AssignmentClarifies that firefighter pension and disability benefits cannot be transferred or assigned, except that beneficiaries may authorize direct payments to certain fire service-related associations or for hospitalization insurance. |
| HB5196 | Extends Accelerated Pension Benefit Payment OptionSigned into law as Public Act 104-0467. Authorizes an additional $1 billion in State Pension Obligation Acceleration Bonds and extends the window for participants in SERS, SURS, and TRS to take an accelerated pension benefit payment to June 30, 2028. |
| SB1281 | Reciprocal Act for Downstate Police & FireApplies the Retirement Systems Reciprocal Act to Downstate firefighters and police who retire or receive survivor benefits on or after the effective date and choose to participate. Classified as a state mandate not subject to reimbursement. |
| SB2342 | SERS Defined Contribution OptionRequires the State Employees' Retirement System to create a defined contribution retirement plan by July 1, 2027, allowing employees to choose between it and the existing defined benefit plan. New hires would not be required to participate in the pension system. |
| SB2826 | IMRF Trustee EligibilityAmends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that no person who has earned creditable service through employment by the Fund shall be eligible to serve as a trustee. |
| SB3075 | Statewide Defined Contribution OptionRequires all five state-funded retirement systems to create defined contribution plans by July 1, 2028, allowing employees to choose between defined contribution and existing pension plans. New employees would not be required to join the pension system. |
| SB3389 | Downstate Teacher Self-Managed PlanAllows Downstate Teacher pension employers to create a self-managed retirement plan as an alternative to the traditional pension, with employees able to choose between the two options. Classified as an unfunded mandate. |
| SB3404 | Accelerated Lump-Sum Buyout, Public SafetyAllows public safety and municipal pension members to choose an accelerated lump sum payout in exchange for reduced future benefits, with large counties and municipalities required to offer the option and make annual contributions to support it. Effective immediately, classified as an unfunded mandate. |
| SB3430 | Accelerated Lump-Sum Buyout, Bond-FinancedAllows public pension members to take an accelerated lump-sum payment in exchange for reduced future benefits, authorizes $700 million in state bonds to fund payments, and allows the state to withhold local government funds to cover bond debt service. Effective immediately. |
Bill numbers link to each bill's official status page on the Illinois General Assembly website (104th General Assembly).