Illinois pensioners earn nearly $25K more retired than those working to support them
The average retired career state employee in Illinois was paid $93,558 in pension benefits last year. That’s $24,538 more than the average Illinoisan working to pay for those retirees.
The average career state pensioner in Illinois was paid $93,558 in public retirement benefits during 2024, collecting $24,538 more from Illinois’ debt-riddled pension systems than the average Illinoisan earned working.
Career state pensioners not only earn nearly 36% more on average than residents working, but most pay for just a fraction of the benefits they will collect: Pay $1, get $19 in benefits. That’s according to an analysis of data from Illinois’ five statewide retirement systems.
On average, these Tier 1 retired state employees will collect $2.48 million in lifetime benefits despite contributing just $128,840 to their own retirements. Contributions include payroll deductions and employer contributions – meaning taxpayers – during their 30-plus year careers.
The average retired state pensioners will recoup in 17 months the retirement contributions they and their government employer made during at least three decades. They also retired at 58.
Your retirement is likely to look very different. The average American saved $609,230 for their own retirement by retirement age, according to the most recent data from 2022. That person will only collect about $22,344 a year from Social Security benefits.
No wonder Illinois’ five statewide government pension systems are nearly $144 billion in the hole. And that might be a vast underestimate: ratings agencies have projected the pension debt at more than double the state’s estimate.
Illinois’ five statewide government pension systems provided benefits to over 239,000 annuitants in 2024. Over 31,900 of them received $100,000 or more. There were 327 retirees paid $250,000 or more.
The $250K-plus Club qualifyies those retirees for the top 5% of income earners in Illinois.
Not all career state pensioners received the same generous deal. Members of the State Employees Retirement System are estimated to collect the largest average return on their lifetime contribution – nearly $29 for every $1 invested.
SERS had the second-most annuitants last year after the Teachers Retirement System. Members recovered their average lifetime contributions in 12 months at 2024 monthly benefit rates. Unlike other state systems, nearly all of its members also qualified for Social Security.
However, the top 50 Illinois pensioners across the five state systems were all members of either the State Universities Retirement System or TRS. These top 50 pensioners alone collected more than $18.3 million of the $13.2 billion in retirement benefits paid last year.
Illinois is home to the nation’s worst pension crisis. It cost each household $2,233 in 2023 – the most in the Midwest and $991 more than the typical American household paid for public employees’ retirements, according to census data.
Illinois’ state and local pension systems’ collective funding ratio of 51.6% was also the lowest in the nation. Experts warn pensions with funding ratios below 60% are deeply troubled and plans with funding ratios below 40% are likely to be past the point of no return.
Polling and municipal referendum results show a majority of Illinois voters want pension reform today to lower the state’s nation-leading tax burden.
And because the Illinois Supreme Court rejected lawmakers’ bipartisan reforms in 2015, it will take a statewide vote and change in the Illinois Constitution to fix public pensions. The best path to that vote is for state lawmakers to put it on the ballot.
A pension reform plan such as one originally developed by the Illinois Policy Institute – based loosely on those bipartisan 2013 reforms – would help eliminate state and local unfunded pension liabilities and achieve retirement security for government pensioners without taking away current benefits.
Previous analysis from 2022 showed changes such as setting a limit to how high a salary can go before pensions are limited, replacing compounding 3% annual raises with true cost-of-living increases, and adjustments to realign benefits with historical inflation rates would have saved more than $50 billion by 2045. It would also get the state’s pensions to 100% funding to fully secure retirements.
Government workers aren’t to blame for taking part in a lucrative retirement system. State employees deserve to collect the pensions they have been promised.
Politicians trading generous pension benefits in return for campaign cash and support that neither the state nor Illinoisans can afford is the true culprit. The long-term solvency of the pension systems upon which 239,384 former state workers rely is at risk.
Special-interest politics have created an unfair and unsustainable system that is hurting government’s ability to do its basic job. Illinoisans overwhelmingly are asking that it end.