Illinois is facing a stark financial reality as its public pensions have become the nation's worst-funded. A recent report by Equable Institute revealed the alarming figures: a staggering $211 billion in pension debt, pushing the state to the bottom of the list with a funding ratio of just 50.8 percent, while debt to GDP stands at 21 percent.
This crisis isn't isolated; five states, including Illinois and California, account for over one-third of the national unfunded liabilities, emphasizing the magnitude of the problem. The state's pension systems, both state and local, are in dire straits, with most hovering in the Fragile (60 to 90 percent) or Distressed (below 60 percent) funded status categories.
Efforts to address the crisis, such as the Tier 2 pension benefits introduced in 2010, have fallen short. The Equable Institute report underscores the pressing need for prudent financial decisions and reform within the Illinois legislature. Reaching the 90 percent funding threshold by 2045 is crucial to avoid the looming threat of default.