This analysis finds Illinois is facing a serious public pension fund crisis due to systematic underpayment of the state’s obligations for more than 25 years. Addressing the crisis will require one or more of the following options: increase revenues to the state, divert current revenues from other spending priorities, reduce benefits for current or future state employees, or change the state’s retirement plans from defined benefit to defined contribution plans. All of those options face strong political opposition, and the legislature has not shown the willpower needed to stick with a reform plan once adopted. Changing from a defined benefit to defined contribution program is the most highly recommended reform.
