Illinois created a Pension Stabilization Fund to make additional contributions to five state retirement systems when state general fund revenues exceed certain thresholds each year. In addition, the governor would have authority to deposit up to $25 million in the PSF any year, according to the state Commission on Government Forecasting and Accountability.
The fund was created under the state budget adopted by the Legislature; the budget awaits Gov. Rod R. Blagojevich's signature.
Based on revenue forecasts, no transfer under the revenue threshold formula would occur for fiscal year 2007, which starts July 1, according to a commission analysis. Mr. Blagojevich hasn't said if he would make any unilateral contribution.
Money would be dispensed from the fund in proportion to each system's share of the total unfunded liability. The legislation specifies that payments would be made only to reduce the unfunded liabilities of the systems, not to reduce state contributions made under the state funding law, the analysis noted.
The five systems are the $34 billion Teachers' Retirement System of the State of Illinois, which has $56 billion in liabilities; $13 billion State Universities Retirement System of Illinois, with $20 billion in liabilities; $10.4 billion Illinois State Employees' Retirement System, with $19.4 billion in liabilities; the $564 million Judges' Retirement System, with $1.236 billion in liabilities; and $83 million General Assembly Retirement System, with $212 million in liabilities.
Clarification: The Illinois Pension Stabilization Fund was created under the state finance budget implementation bill, which Gov. Rod R. Blagojevich hadn't signed as of May 24. The bill is considered separately from other parts of the state's budget.