The Illinois Public Pension Funding Crisis: Is Moving from the Current Defined Benefit System to a Defined Contribution System an Option That Makes Sense?

Source: Jourlande Gabriel and Chrissy A. Mancini, Illinois Retirement Security Initiative, A Project of the Center for Tax and Budget Accountability, 2007

from the press release:

Springfield, IL (Monday, May 7, 2007) – A new study released today at the Statehouse has found that – contrary to widespread perception – switching from Illinois’ current defined benefit system to a defined contribution system will do nothing to solve the state’s $40.7 billion unfunded pension liability and would likely result in much lower retirement benefits for public employees and higher costs for taxpayers.

The study, “The Illinois Public Pension Funding Crisis: Is Moving from the Current Defined Benefit System to a Defined Contribution System an Option that Makes Sense?”, was conducted by the Illinois Retirement Security Initiative, a project of the Center for Tax and Budget Accountability. The study finds that the conventional wisdom that switching to a defined contribution system will solve the state’s massive unfunded public employee pension liability is provably false.

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