CHICAGO – Illinois added another $2 billion to its more than $100 billion tab of unfunded pension obligations in fiscal 2017.

The unfunded figure rose to $128.9 billion in fiscal 2017 from $126.5 billion in fiscal 2016, according to state bond offering documents updated on Tuesday. The tab in fiscal 2015 was $112.9 billion and $111.2 billion in fiscal 2014, $100.5 billion in fiscal 2013, and $94.6 billion in fiscal 2012.

illinois unfunded pension liablities chart
illinois unfunded pension liablities chart

The funded ratio improved slightly rising to 39.9% from 39.2%. The figures are based on the state’s policy that smooths investment results over multiple years. Based on the market value, the tab totals $129.1 billion for a funded ratio of 39.8%.

The net pension liabilities, when applying new reporting rules, totals $136.9 billion for a net position of 38.4%

The updated data comes from fiscal 2016 draft actuarial reports released by the state’s five retirement funds and its preliminary contribution requests for fiscal 2018. The funds must submit a preliminary contribution amount by a Nov. 1 state deadline. The five funds’ comprehensive financial statements for fiscal 2017 were not yet available and unfunded figures are preliminary and subject to change.

The Teachers Retirement System – the largest of the five funds – saw a $2 billion jump in its unfunded pension obligations that rose to $73.4 billion in fiscal 2017 from $71.4 billion while its funded ratio slightly improved to 40.2% in fiscal 2017 from 39.8% in fiscal 2016.

“The TRS unfunded liability was created by seven decades of inadequate funding by state government and our future sustainability relies on consistent state funding to pay down this debt,” executive director Dick Ingram said in a statement.

The state’s massive pension obligations are a major factor weighing on Illinois’ credit profile and it has limited reform options due to court rulings that have tossed any cuts as unconstitutional. The state carries the weakest ratings of any state and two are at the lowest investment grade level.

The budget package enacted in July adopted several pension changes including a measure that the funds have warned will only hurt their health. The change smooths the impact of actuarial changes such as changes in assumed rates of return reducing by about $800 million the state’s $8.8 billion contribution this year.

Under the current funding schedule established by lawmakers in 1995, the state is required to make contributions as a level percent of payroll in fiscal years 2011 through 2045. The contributions are required to be sufficient, when added to employee contributions, investment income, and other income, to bring the total assets of the systems to 90% of the actuarial liabilities by fiscal year 2045.

The state’s woes extend statewide. The collective funded ratios of all Illinois public pension funds at the local and state level falls under 50%. The collective liabilities of public pension funds statewide grew by $17 billion to $185.2 billion in fiscal 2016 from $168.2 billion in fiscal 2015, and the collective funded ratio deteriorated to 47.9% from 49.4%, according to a state report that tracks all 671 of the state’s public pension funds.

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