IL Audit: State Pensions Underfunded by Almost 40%

March 28, 2007 ( - The five Illinois state pension systems are underfunded by nearly 40%, according to new reports by Illinois Auditor General William Holland.

Not only that, but the amount the state needs to plug into its pension plans continues to mushroom by billions of dollars each year – with more than $2 billion being added to the total last year, Holland reported, according to a news report in the   Bloomington Pantagraph.

In itsannual review of the state’s five pension systems, auditors put the state’s unfunded pension liability at $40.7 billion.

In his latest budget proposal, Governor Rod Blagojevich wants to cut that amount to $15 billion by leasing the state lottery and selling bonds. He says his plan will bring in $26 billion and increase the pension system’s funding level from the current 60% to 83%.

Blagojevich’s budget office said the audit shows that pension reforms imposed over the past four years are helping improve the underfunding problem. “This is a strong indication that we’re moving in the right direction,” said spokesman Justin DeJong, according to the news report.

The Holland audit reports are   here .