Illinois’ Public Pension Costs Continue to Raise Funding Concerns

Illinois’ public pension system has faced financial challenges for decades, and benefits paid to some of the state’s highest-earning retirees continue to draw attention to the system’s long-term costs.

In 2025, 184 retirees across Illinois’ five state-run pension systems received enough in annual pension benefits to place them among the top 5% of income earners in the United States. The state’s 50 highest-paid pensioners received an average of approximately $437,000 during the year, with 42 of those individuals participating in the State Universities Retirement System (“SURS”) and the remaining eight in the Teachers’ Retirement System (“TRS”).

The highest annual benefit went to Dr. Konstantin Slavin, a University of Illinois Chicago professor, who received approximately $747,000 in pension payments in 2025. Slavin began receiving benefits in 2022 at age 52 and has since collected more than $2.6 million from the pension system. His total contributions were close to half of that. Under certain circumstances, a State Universities Retirement System of Illinois (“SURS”) retiree may return to work for a participating university while continuing to collect retirement benefits. However, post-retirement employment is subject to restrictions, including requirements regarding when a retiree may return to work and limits on their earnings.

Much of the discussion surrounding the state’s pension payments involves Illinois’ Tier 1 system, which generally covers employees hired before January 1, 2011. Tier 1 benefits include a 3% compounded annual increase. Over time, that compounding can substantially increase the amount a retiree receives each year, particularly for individuals who retire relatively early and collect benefits for several decades.

The larger issue for Illinois is how these obligations affect the financial health of the pension systems as a whole. The five statewide systems currently have approximately $275 billion in promised benefits compared with roughly $131 billion in assets, leaving them less than 50% funded. Meanwhile, pension contributions continue to account for a significant portion of the state’s annual budget. Illinois lawmakers therefore face the challenge of meeting benefits already promised to public employees while addressing the financial pressure those obligations place on the state. With additional changes to public retirement benefits still under discussion, pension funding will likely remain an important financial and policy issue for Illinois in the near future.