Dupage Policy Journal

Bryce Hill, director of fiscal and economic analysis at the Illinois Policy Institute, has expressed concerns about Illinois' financial preparedness to meet its growing pension obligations. Hill made these remarks on the Prairie State Wire Podcast.

"As a result of these luxurious benefits, the state has $144 billion in unfunded pension liabilities," said Hill. "That means for current retirees and participants in the five state run systems, we only have 46 cents on hand for every dollar that we're going to be paying out in the future. So in other words, we're precarious in a very precarious financial situation when it comes to paying out these benefits. The pool of resources that are supposed to be used to fund these."

Illinois has long faced challenges with unfunded pension liabilities, which have placed a significant strain on the state budget. According to a Civic Federation report using Fiscal Year 2023 data, Illinois allocated approximately $12.2 billion to pensions, accounting for roughly 11% of total operating spending. This figure is notably higher than most other states. The report warned that this "crowding out" effect limits funding for essential services such as education, healthcare, and infrastructure while imposing some of the highest overall tax burdens on residents.

Bryce Hill, Director of Fiscal and Economic Analysis for Illinois Policy Institute | X

The state's five pension systems—Teachers’ Retirement System, State Employees’ Retirement System, State Universities Retirement System, Judges’ Retirement System, and General Assembly Retirement System—reported a combined unfunded liability of $143.7 billion at the end of Fiscal Year 2024. The Commission on Government Forecasting and Accountability (CGFA) found funded ratios of 46.0% on a market-value basis and 45.8% on an actuarial basis. CGFA attributed these figures to decades of underfunded contributions under a statutory 50-year plan.

Despite national improvements in pension funding, Illinois remains among the weakest in the United States in this regard. An analysis by Equable Institute in 2023 revealed that while the average funded ratio for state public plans was 78.1%, Illinois stood at just 49.7%. This places Illinois near the bottom of national rankings for pension funding adequacy.

Hill leads fiscal and economic research at the Illinois Policy Institute, focusing on budgets, taxes, and economic issues related to Illinois' fiscal policy challenges. He holds a Bachelor’s degree in economics and political science from Capital University and previously served as an economic research assistant at The Buckeye Institute in Ohio.

The Illinois Policy Institute is a nonprofit organization founded in 2002 and based in Chicago. It aims to promote free-market solutions to state challenges across various areas including taxes, pensions, education, labor, and government reform. The institute is supported by private contributions and operates a separate advocacy arm known as Illinois Policy.