State Employees Retirement System of Illinois (SERS)
public plan · State of Illinois · Springfield, IL
State Employees Retirement System of Illinois (SERS) is severely underfunded at 40%, with $29.2B in unfunded liability. Plans in this bracket face significant solvency risk and are typically on regulatory funding-improvement plans, with active intervention from PBGC for private plans or state pension boards for public ones.
State of Illinois runs State Employees Retirement System of Illinois (SERS) as a public-sector defined-benefit plan. The plan operates outside the ERISA framework; oversight comes from state pension boards and the sponsor's legislative body rather than the federal Department of Labor or PBGC. The plan remains active — accruing new benefits for current employees and accepting new participants. Among private-sector single-employer plans, the active status is increasingly rare as employers freeze accruals while continuing to fund existing obligations; public-sector plans are more often still actively accruing.
On scale: $19.8B in plan assets across 152,000 covered participants. With 70,000 workers still accruing and 82,000 drawing benefits, the plan has the size to support institutional asset management and full-time actuarial staff. Active and retired participants are roughly balanced (70,000 active, 82,000 retired). The plan is in a steady-state cash-flow phase where new accruals offset benefit payments. Annual cash flows: $2.6B in sponsor contributions versus $2.9B in benefit payments. Investment performance over the most recent year ran 4.5%, against the plan's assumed long-term return of 6.8%.
PBGC risk classification: critical. The plan faces mandatory rehabilitation under PBGC rules; participants should monitor benefit guarantees carefully. Public plans like State Employees Retirement System of Illinois (SERS) are not PBGC-insured. The benefit guarantee rests on the sponsoring government's ability and willingness to make required contributions, which interacts with state and local tax-base dynamics.
Source: DOL EFAST2 Form 5500 filings and Boston College CRR Public Plans Database.
Funding History
What This Means for You
State Employees Retirement System of Illinois (SERS) is significantly underfunded at 40%, with $29.2B in unfunded liabilities affecting 152,000 participants. Plans at this funding level face difficult choices: raising contributions substantially, reducing future benefit accruals, or in extreme cases, applying for benefit suspensions. The PBGC has flagged this plan as critical status. Public plans cannot declare bankruptcy, but severe underfunding may lead to reduced cost-of-living adjustments or increased employee contributions. If you are a participant, it is important to understand your options and consider diversifying your retirement income sources.
Year-by-Year Funding
| Year | Assets | Liabilities | Funding Ratio | Contributions |
|---|---|---|---|---|
| 2023 | $19.8B | $49.0B | 40.4% | $2.6B |
| 2022 | $19.2B | $49.2B | 39.0% | $2.5B |
| 2021 | $18.6B | $44.3B | 42.0% | $2.4B |
| 2020 | $18.0B | $50.0B | 36.0% | $2.4B |
| 2019 | $17.4B | $47.1B | 37.0% | $2.3B |
Frequently Asked Questions
State Employees Retirement System of Illinois (SERS) is 40% funded, meaning it has 40 cents in assets for every dollar in future benefit obligations. This is significantly underfunded and participants should monitor the situation closely.
State Employees Retirement System of Illinois (SERS) has 152,000 total participants, including 70,000 active employees and 82,000 retirees currently receiving benefits.
State Employees Retirement System of Illinois (SERS) is not covered by the PBGC. Benefits depend entirely on the plan's assets and the sponsor's ability to fund it.
The Pension Health Score (0-100, A-F) measures a pension plan's financial strength based on funding ratio (50%), funding trend over 3 years (30%), and PBGC risk level (20%). Higher scores indicate more secure retirement benefits.
Pension Health Score is calculated from funding ratio, 3-year funding trend, and PBGC risk classification.