Prairie State Wire

Comptroller Susana Mendoza has initiated the first pension pre-payments under new legislative rules. The July payments to state pension systems amount to $1.284 billion, including $422 million in pre-payments, which is 50% more than the usual monthly payment.

Earlier this year, Mendoza sought a statutory change that now permits her office to make larger payments into state pensions earlier when fund balances are robust. Previously, the law restricted the Illinois Office of Comptroller (IOC) from exceeding preset monthly contributions.

“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.”

Tim Blair, Executive Secretary of the State Retirement Systems, expressed appreciation for this development: “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.”

The expectation is that by pre-paying $422 million of its monthly pension contribution, funds will remain invested longer, potentially 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.