Monday, July 15, 2024
Today, the Illinois Office of Comptroller (IOC) made the first pension pre-payments as allowed under new language included in the fiscal year 2025 budget implementation bill.
Comptroller Mendoza sought the statutory change earlier this year.
July payments to the state pension systems issued today total $1.284 billion, which includes $422 million in pre-payments, or 50% more than the usual monthly amount.
Previously, the law prohibited the IOC from making more than the preset monthly payment to the pension systems. The change allows Comptroller Mendoza to pay more into state pensions earlier in the year when fund balances are strong.
“I’m pleased the General Assembly and the Governor approved my request, enabling my office to make these early payments from existing funds,” said Comptroller Mendoza. “This will allow the pension systems to keep more money in their investment portfolios so they can continue to grow and provide greater predictability for the retirement systems in managing payments to state retirees.”
“The pre-payment of monthly state contributions allows the retirement systems to keep assets working to generate investment returns longer, improving the financial condition of the systems and potentially reducing required state contributions in the future. We appreciate the efforts of Comptroller Mendoza in getting this law enacted and in making accelerated payments the first month the option is available,” said Tim Blair, Executive Secretary of the State Retirement Systems.
It’s anticipated that pre-paying $422 million of the state’s monthly pension contribution will allow funds to remain invested for a few months longer, generating an additional $7 million.
“We are fortunate to have this new cash management tool that is only possible because of continued improvements in the state’s general funds balances and overall finances,” said Mendoza.
###