94th General Assembly
Senate Bill 27 or Public Act 94-0004
Background and what the bill did:
- Public Act 88-0593 (in 1995) required the state during fiscal years 1996 through 2045 to make sufficient payments into the pension system so that the state could properly fund the system at 90% by fiscal year 2045 and beyond
- State pension contributions increased gradually to achieve the target by 2045
- Senate Bill 27 "reset" the scheduled payments - in essence, stepping backward and setting new funding targets
- Reduced contributions to the pension systems by $2.3 billion in fiscal years 2006 and 2007, and by an additional $1 to $2 billion in fiscal years 2008 to 2010
- Total holiday of $3 to 4 billion
- Costs future taxpayers at least $20 billion and perhaps as much as $50 billion to make up for the short-term underfunding
- Changed benefits for TRS, SURS, and SERS (click on each system to view the changes)
- Gave Chicago teachers an extension of their ERO until 2010
- Gave Chicago an additional $10 million of state funding to keep their pension system at 90% funding
- Under SB 27, the state is supposed to "catch up" by FY 2016
- SB 27 under funds pensions for a decade - and then it is someone else's problem
Click here for the House roll call and click here for the Senate roll call to see who supported this legislation
AFSCME, IEA, IFT and other unions
Retired State Employee Association
Click here to view newspaper articles after the bill passed the Senate and was sent to Gov. Blagojevich
- Illinois has the worst credit rating of any state due in large part to pensions, according to Moody’s, which wrote in August that Illinois “faces a significant funding burden” for its pensions.
- Only 43% of the benefits by those in State systems already earned are covered by current investments of the Illinois systems. This is the worst funding ratio of any state.
- The State’s pension “mortgage” is the unfunded liability of $83 billion plus $16 billion in pension bonds (total pension debt: $99 billion). The annual “mortgage payment” on this debt is $6.5 billion this year, rising by $500 million to at least $7.4 billion next year. This year’s payment is over 17% of the general budget and growing.
- Over 40% of today’s unfunded liabilities is due to past underfunding by the State and active members. Benefit enhancements and low investment returns also have added to our debt.
More background on the history of pension funding is contained in the report "Just the Facts" prepared by the Civic Committee of the Commercial Club of Chicago. Visit their full site here and read the report by clicking here.