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* Comptroller Susana Mendoza…
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.
Discuss.
posted by Isabel Miller
Monday, Jul 15, 24 @ 10:23 am
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Nice to see some innovative thinking. More like this (as a certain blog guy says).
Comment by Norseman Monday, Jul 15, 24 @ 10:33 am
Fantastic! Now when are they going to catch up on the backlog of medical payments? Delta Dental’s backlog is 560 days. Retirees are paying out of pocket and waiting over 18 months to be reimbursed.
Comment by Notorious JMB Monday, Jul 15, 24 @ 11:30 am
See? The financial genius of Bruce Rauner is now paying off. /s
Comment by Lincoln Lad Monday, Jul 15, 24 @ 11:41 am
@NJMB What? We’re getting Delta claims paid within days. Better check with somebody, I don’t think it’s been a general problem for a while.
TTP, it’s nice to have some progress on this issue, but scary that 422M doesn’t make much difference.
Comment by Excessively Rabid Monday, Jul 15, 24 @ 11:52 am
Is the value of “investing” the $422 million early in the pension system greater than using those dollars in short-term interest bearing accounts and adding the proceeds to the general revenue fund or back into the pension system?
I’d say it looks like a good idea but can the state maximize the value of those dollars in a different way.
Comment by Cool Papa Bell Monday, Jul 15, 24 @ 1:12 pm
Retired teacher says thank you for your efforts to bring common sense to,our pension debt problem. Every little bit helps.
Comment by Stormsw7706 Monday, Jul 15, 24 @ 1:28 pm
=I’d say it looks like a good idea but can the state maximize the value of those dollars in a different way.=
Putting it toward the pension funds allows the funds to earn the investment income thus adding an additional dimension directly to growing the pension funds and reducing the debt.
Comment by JS Mill Monday, Jul 15, 24 @ 2:06 pm
@Excessively Rabid. My mom (state retiree) who’s currently out of pocket about 5 grand and waiting reimbursement checked with Delta Dental last Tuesday. Who did you check with?
Comment by Notorious JMB Monday, Jul 15, 24 @ 3:01 pm
@Notorious JMB
If your mom is in the CIP/TRIP, this is possible, as they are chronically underfunded. If she is in the standard SEGIP, then this shouldn’t be happening, as claims in that program are paid quickly nowadays.
Comment by Former ILSIP Monday, Jul 15, 24 @ 3:39 pm
NJMB-We’ve been getting our claims paid within a week or so. This is through university retirement if that makes any difference. A few years ago there were extremely long delays and when we finally got reimbursed they would send a second check for interest. But since the state started paying its bills on time, we’ve been getting paid immediately. I’m surprised to hear you’re still having delays and can offer no explanation. But it’s not happening to everybody.
Comment by Excessively Rabid Monday, Jul 15, 24 @ 3:39 pm
She retired from a community college
Comment by Notorious JMB Monday, Jul 15, 24 @ 4:13 pm
@Excessively Rabid. I am a current state worker and Delta Dental has been paying the same bill for over 3 years now, I think they are only paying around $30 a month, and every month I get bills and notices that it could lead to collections from my dentist.
Comment by maybe Monday, Jul 15, 24 @ 5:16 pm
From Delta Dental, claims paid in network through December 2022, out of network October 2022.
https://www.deltadentalil.com/employers-groups/soi/dental-claim-payments/
Comment by Anyone Remember Monday, Jul 15, 24 @ 8:16 pm