Chicago’s municipal pension is one of the worst-funded pension systems in the nation despite sky-high taxes dedicated to paying into it. Fat pensions such as former Ald. Walter Burnett’s show why.
Gov. J.B. Pritzker had a chance to stop a bill putting taxpayers on the hook for $11.1 billion in inflated pension benefits for Chicago police and firefighters. He blew it. Taxpayers will be paying the price for decades.
Illinois has the nation’s worst public pension crisis. Nationwide analysis from the Equable Institute shows Illinois state pensions remain fiscally unstable and threaten retirees and taxpayers, underscoring the need for reform.
State lawmakers boosted benefits for Chicago police and firefighters in the final days of the legislative session. Gov. J.B. Pritzker should reject this bill, or else it will add billions in debt to an already struggling city.
Money that could help address the teacher shortage is often the first to get cut in pursuit of keeping up with government pension debt. Supporting Illinois teachers will require constitutional pension reform and protecting Tier 2 cost savings.
State data shows 31,937 members of Illinois’ five pension systems collected $100,000 a year or more in retirement benefits during 2024. Some got over $500,000. See the full list below.
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.
Lawmakers quietly added a fund intended to comply with federal rules about pensions for newer state workers. If it works, Illinois taxpayers will have avoided costly federal mandates and a push by public employee unions to expand obligations by $64.5 billion.
As state lawmakers finalize the 2026 budget, public sector unions are pushing for major benefit spikes for Tier 2 pensioners to be included in last-minute additions.
Illinois lawmakers could still pass expensive changes to newer state worker pensions using a “gut and replace” maneuver. The proposal would cost taxpayers over $76 billion by 2050.
Illinois teachers are required to contribute 9% of their salary toward pensions, but many school districts “pick up” this cost – putting the pension burden on taxpayers.
Tariffs by President Donald Trump sent markets tumbling and temporarily hurt public pension investments. While the markets recovered, the episode showed Chicago’s pension systems are extremely fragile.
With $18.5 billion of the city’s $52.4 billion shortfall driven by interest on pension debt, it’s clear Illinois’ largest city needs the state to pass constitutional pension reform.
Chicago Public Schools teachers hired before 2017 only pay 2% of the required employee contribution for their pensions. The other 7% is picked up by the district, costing $135 million in 2025.