(The Center Square) – The state of Illinois is making an early pension payment, aiming to get more bang for the buck from Illinois tax dollars for the state’s largest liability.
Illinois’ five state pension funds have a collective unfunded liability of $140 billion. While the number has fluctuated over the years, it still remains among the largest unfunded liabilities in the country and is sighted by ratings agencies as a concern.
Illinois Comptroller Susana Mendoza, who cuts checks from the taxpayers’ checkbook, said with news of growth of general revenue funds, she’s making both the July and November payments this month.
“The month of February is always our worst month, and the month of November is also a very tough month from a cashflow perspective,” Mendoza told The Center Square. “If I’m able to actually prepay those tough months in good months, then that really helps.”
The total payment for pensions to cover the two months is more than $1.7 billion.
“That will allow funds to remain invested for a few months longer because of the prepayment and possibly will produce an extra $20 million for retiree pensions,” Mendoza said.
This is the second prepayment Mendoza has made.
“Now that’s in addition to the estimated $7 million gained when the Illinois Office of Comptroller did this exact same thing back in July of 2024,” she said.
Mendoza fought for the ability to make early pension payments.
“The longer we have money working in a pension system, the better the returns, and the less that those pension systems have to think about drawing down payments,” she said.
Until last year, the comptroller could make just one payment to the pension systems each month. Mendoza worked to change that to make early payments where possible.
