Comptroller Susana Mendoza orders new round of pension pre-payments

For the second year in a row, Comptroller Susana A. Mendoza is taking advantage of a law she sought allowing her office to pre-pay state pensions when state fund balances are strong.

“I believe in the adage that time in the market beats timing the market. We know from last year that these pre-payments work. With more money in their investment portfolios for a longer time, the pension systems saw assets increase,” Mendoza said. “Sound budgeting and solid revenues allow the state to again implement this cash management tool.”

Until last year, the Illinois Office of Comptroller could make just one payment to the pension systems each month. Mendoza worked to change the law so the systems’ assets could take advantage of more time to potentially lead to greater market returns.

Following reported year-over-year growth in the state’s General Funds base revenues of $1.4 billion, with the General Revenue Fund ending June with almost $1.9 billion on hand, Comptroller Mendoza directed the five state pension systems’ regularly scheduled November 2025 payments to be made early this July, the first month of the fiscal year.

November is traditionally a lower-revenue month, so the IOC is taking advantage of the current healthier fund balances so November revenues can be focused on paying down other state bills.

Combined with the regular July payments to the systems, payments issued this month total $1.756 billion, which includes $878 million in pre-payments, or 100% more than the usual monthly amount.

The Illinois State Retirement Systems anticipates that pre-paying $878 million of the state’s annual pension contribution will allow funds to remain invested for a few months longer, possibly producing an extra $20 million for retirees’ pensions. This is in addition to the estimated $7 million gained when the IOC executed the tool in July 2024.

Tim Blair, Executive Secretary of the State Retirement Systems added, “Comptroller Mendoza’s decision to accelerate the payment of retirement contributions again this year is a huge benefit in managing cashflow and allows system assets to remain invested longer, thereby increasing returns and improving the financial health of the systems. The approach of Comptroller Mendoza is a welcome change from historical efforts to reduce contributions to the retirement systems that were common in Illinois for many decades and until as recently as 2018.”