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Illinois using hybrid 401(k)s to stop pension hemorrhaging

As part of the new controversial budget deal for Illinois, the state pensions will enroll new hires in hybrid 401(k) plans as the state tries to stem pension hemorrhaging.

By Nick Thornton | Updated on July 10, 2017
State-sponsored pensions will enroll new hires in hybrid 401(k) plans as part of the new controversial budget deal for Illinois. (Photo: AP)

State-sponsored pensions in Illinois will be allowed to enroll new hires in hybrid 401(k) plans, a provision of that state’s recently passed budget designed to give some relief to the state’s worst funded pension plans.

Five of the 17 pensions sponsored by the state—the State Universities Retirement System, Downstate Municipal/Suburban Fund for teachers, the State Employees System, and the Judges/Legislators pension—have an aggregate funded ratio of 40 percent and about $130 billion in unfunded liabilities.

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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