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What the law says
The Illinois Constitution says pension benefits “shall not be diminished or impaired” (Article XIII, Section 5). In 2015 the Illinois Supreme Court struck down the 2013 pension-cut law unanimously (In re Pension Reform Litigation, 2015 IL 118585). Earned benefits can't be cut. The question is how the state pays for them.
Retirees are getting their checks.
The required payments run on continuing appropriations, and the state has made its full statutory payment every year since FY2012. Source: State bond disclosure, Sept 2026.
The bill crowds out the rest.
About $11.9 billion a year goes to pensions across all funds, $10.7 billion of it from General Funds. Every other budget line competes for what is left. Source: COGFA; GOMB walk down, FY2027.
The target is 90%, not 100%.
State law aims for the systems to be 90% funded by the end of FY2045. Source: State bond disclosure, Sept 2026.
Newer workers get a thinner deal.
People hired since January 1, 2011 (Tier 2) retire later, on a capped salary, with a smaller yearly raise. The state's actuary has warned the Tier 2 formula may not meet the federal Social Security safe-harbor test as written. Source: COGFA, Nov 2025.
Both parties built this
Nearly half (47%) of the debt's growth since 1996 came from the state paying in less than its own actuaries said it needed. The rest came from changed assumptions, demographics and investment shortfalls. Source: COGFA, Nov 2025.
- 1994
Gov. Jim Edgar (R) signs the Pension Funding Act (Public Act 88-593): 90% funded by 2045, with a 15-year “ramp” of rising payments. By the state's own account, the early payments did not cover the full cost, so the debt kept growing. Source: State bond disclosure, Sept 2026; WTTW.
- 2003
Gov. Rod Blagojevich (D) and a Democratic legislature borrow $10 billion in pension obligation bonds. Source: State bond disclosure.
- 2005
Public Act 94-4 cuts the required pension payments for FY2006 and FY2007 by about half, the “pension holiday.” Source: State bond disclosure.
- 2010
Gov. Pat Quinn (D) signs Tier 2 for new hires (Public Act 96-889); more pension bonds are sold to make the FY2010 and FY2011 payments. Source: State bond disclosure.
- 2015
The Illinois Supreme Court strikes down the 2013 benefit-cut law, 7-0. Source: Illinois Supreme Court.
- 2025
The five systems are 47.8% funded and $143.5 billion short at market value. On the smoothed actuarial measure the Auditor General reports, it is about $144.5 billion. Source: COGFA; Illinois Auditor General, FY2025.
Next to other states
Different studies measure pensions differently, so ranks vary. By every common measure, Illinois is among the lowest-funded states in the country. Source: Equable Institute, 2025; Tax Foundation.
Illinois' credit rating agencies name the pension debt as the state's main weakness. See credit ratings.
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