Illinois’ Commission on Government Forecasting and Accountablity says the state’s pension liability did something it hasn’t done in 4 years – it shrank.
According to a special pension briefing released last week for the end of November, the state’s unfunded pension liability shrank by $14.3 billion from last year down to $130 billion. That’s a nearly 10% decline from the previous year. According to the report, during the recent 15-year period, there have been only 3 times that’s happened – 2011, 2017, and now 2021.
Crain’s Chicago Business says that the news should be somewhat tempered because the COFGA figures are based on market values of pension-fund assets and are not blended or averaged over the last 5-year period. In other words, the state’s pension funds enjoyed exceptional returns on investments, earning anywhere between 23 and 25 percent. Crain’s says the normal expected rate of return has been between 6.5 and 7 percent.
Crain’s says the state still is contributing roughly $2 billion a year less than the amount it is actuarially required to reach its eventual full funding.