What is the source of Illinois' unfunded pension liability?
A. At the end of FY 1995, Illinois' state retirement systems' unfunded liabilities totaled almost $19.5 billion. By the end of FY 2006, unfunded liabilities totaled $40.7 billion. According to the Illinois Commission on Government Forecasting and Accountability, the failure to make employer contributions at a normal-cost-plus-interest level over the ten year reporting period has been the most significant catalyst in the increase in unfunded liabilities of all five State-funded systems. As of 2011 the unfunded liability had grown to roughly $83 billion1.
1. Source: Illinois Commission on Government Forecasting and Accountability. 2011. Monthly Briefing, November 2011. http://www.ilga.gov/commission/cgfa2006/Upload/1111revenue.pdf. Please note that that CoGFA brief contains two different unfunded liability figures. The difference between the two figures is how assets are calculated. One calculation uses the asset market value technique, whereas the other calculates assets using the actuarial value of assets method (this is the method used by the state pension systems).