Illinois’ pension systems are one year closer to complete insolvency.
According to actuarial reports, the state’s five public pension systems owe a combined $94.6 billion. That’s up 14 percent from the $82.9 billion reported last year. Worse yet, none of the pension systems have enough assets on hand to pay benefits to those who have already retired, let alone those still working.
Of course, these official numbers use many accounting gimmicks that will be prohibited under the new rules adopted both by the Governmental Accounting Standards Board and by Moody’s Investors Service. Under those new accounting rules, which will gradually take effect during the next few years, Illinois’ pension debt will grow to more than $209 billion.
The simple fact is that the state’s pension funds are broke. Pension experts and the state’s own actuaries agree: the pension funds could soon be insolvent. Merely tinkering at the margins, as this year’s various so-called pension reform proposals would do, can’t solve this crisis.
Without real reform, pensions will continue to crowd out funding for core government services, such as education. And the longer lawmakers delay action, the worse Illinois’ pension debt crisis will become. Legislators can’t ignore the math any longer. Only major reforms, like those centered on defined-contribution plans and those tackling the automatic cost-of-living adjustment, can get the problem under control.