Illinois carries roughly $251 billion in unfunded state pension liabilities and a 42.9% aggregate funded ratio, per the State Actuary's December 2025 report. On August 26, 2026, Moody's upgraded the state's issuer rating to A1 from A2. A week later, S&P raised Illinois general obligation bonds to A from A-minus. Both agencies said, in the same rationale documents, that Illinois pensions remain badly underfunded and that they were upgrading the credit anyway. If you own the paper, that upgrade is welcome. If you understand what the funded ratio means, the upgrade is the story.
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