The funded ratio of the Illinois public pension plans is estimated at 39 percent, the second lowest percentage among the 50 states, according to a new analysis from the Tax Foundation based on fiscal-year 2019 data.
The percentage was calculated by comparing the market value of the pension fund’s assets to its accrued pension liabilities. The data comes from Chicago-based Truth in Accounting.
A low ratio points to the state’s pension system being not well-funded, and a higher ratio means that pension fund assets are keeping up with liabilities, according to the Tax Foundation.
Nationwide, 17 states had pension plans whose funded ratio was less than 66.7 percent, while five had funding ratios below 50 percent, the study states.
Historically, state pension funds were classified as defined-benefit plans, which guarantee retirees an annuity for life. More recently, however, states have created defined-contribution plans for new hires, allowing workers to oversee individual accounts and helping states to reduce liabilities over time, the analysis said.
State Pension Plan Funding Percentages, From Highest to Lowest
|Rank||State||Funded Ratio of Public Pension Plans|
|22 (tie)||North Dakota||75%|
|34 (tie)||New Hampshire||65%|
|42 (tie)||South Carolina||55%|
Source: Tax Foundation and Truth in Accounting