Illinois’ unfunded pension liabilities rose 16.9% to $129.8 billion in the fiscal year ended June 30, said a report from the state Commission on Government Forecasting and Accountability.
Assets and accrued liabilities for Illinois’ five state-run pension funds totaled $78.2 billion and $208 billion, respectively, for an aggregate funding ratio of 37.6%, down 4.3 percentage points from June 30, 2015.
The figures are based on the fair market value of assets. On an actuarial value basis with asset smoothing, the pension funds’ unfunded liabilities totaled $126.5 billion at the end of fiscal year 2016, up 12%. Assets and accrued liabilities totaled $81.5 billion and $208 billion, respectively, for an aggregate funding ratio of 39.2%.
Lowered return assumptions and other actuarial assumption changes in fiscal year 2016 accounted for 71% of the $13.6 billion year-over-year increase in unfunded liabilities on an actuarial basis. All of the retirement systems with the exception of the $16.7 billion Illinois State Universities Retirement System, Champaign, lowered their return assumptions in fiscal year 2016.
Weak investment returns and actuarially insufficient employer contributions also contributed to the funding decline in fiscal year 2016, according to the report.
The commission estimates Illinois’ pension contributions will rise to $8.9 billion in fiscal year 2018, up from roughly $7.9 billion in fiscal year 2017. It also estimates that unfunded liabilities on an actuarial basis could reach an aggregate $131.2 billion in fiscal year 2017.
On a market value basis, the Illinois Teachers’ Retirement System, Springfield, reported $45.25 billion in assets and $118.63 billion in liabilities for a funding ratio of 38.1% as of June 30. As of the same date, the Illinois State Employees’ Retirement System, had $15 billion in assets and $45.5 billion in liabilities for a funding ratio of 33%; SURS, $17 billion in assets and $40.92 billion in liabilities for a funding ratio of 41.5%; Illinois Judges’ Retirement System, $840 million in assets and $2.55 billion in liabilities for a funding ratio of 33%; and the General Assembly Retirement System, $49 million in assets and $363 million in liabilities for a funding ratio of 13.5%.