What you need to know about Illinois pension plan

  • August 4, 2021

Illinois retirees may have a new plan to take care of them, but it’s not one the state has yet finalized.

Illinois Secretary of State Tom Miller announced Thursday that the Illinois Pension System will create a new pension plan that will cover retirees who leave their current pension plans and go to work on their own.

The new plan will be administered by the Illinois State Teachers Retirement System, a separate entity created by the state to manage state employees’ retirement savings.

It is expected to be available in 2019.

In the state, retirees have until 2026 to start paying into the new plan.

The plan will cover people age 50 to 64 and older who leave current pensions or who take on new jobs in the private sector or in the public sector.

Miller says Illinois’ pension plan is one of the best in the nation, with a better mix of investments and coverage than most states.

The Illinois pension system is expected pay out at least $2.8 billion to the state each year, and the state expects to receive another $1.6 billion through the end of 2019.

That’s roughly half of what states contribute to their pensions, which are typically about $20 billion a year.

But some experts say the state’s retirement system has been able to keep up with inflation and the economy.

The pension plan’s structure and coverage is in line with many other states’ pension plans, but the state could have had more savings had it chosen a different plan, said Daniel Luszewski, director of research for the Illinois Association of Pension Plans.