Illinois will need to contribute $6.8 billion toward its five pension funds in the next fiscal year, up by about $965 million in the current fiscal 2013 budget, the Chicago Civic Federation said last week after reviewing recent recommendations from the five systems.
The proposed payments for fiscal 2014 beginning July 1 is $637 million more than what was earlier projected.
The largest increase is being sought by the Teachers Retirement System which in September adopted various actuarial assumption changes including a lowering of its assumed rate of return to 8% from 8.5%.
The fund — the largest of the state's five pension funds — also recently reported a return of less than 1% on investments in fiscal 2012 after a strong 24% return a year earlier. TRS has warned insufficient state funding threatens the fund's future solvency.
The state's payments are based on a 50-year funding plan adopted in 1995 to bring the state's pension system to a 90% funded ratio by 2045 but it has long fallen short of the actuarially required contribution to truly fund the system.
The state holds the distinction of having the worst funded pensions among states with $83 billion in unfunded liabilities for a 43% funded ratio in fiscal 2011.
Lawmakers failed this year to adopt pension reforms proposed by Gov. Pat Quinn but the issue is expected to resurface in a lame-duck session of the legislature early next year.