GENERAL ASSEMBLY RETIREMENT SYSTEM
For the Year Ended June 30, 2010
Summary of Findings:
Total this audit:† 0
Total last audit:† 0
Repeated from last audit:† 0
Release Date: March 3, 2011
State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL
To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703
(217) †† 782-6046 or TTY (888) 261-2887
This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov
This digest covers our financial audit of the General Assembly Retirement System, State of Illinois (System) for the year ended June 30, 2010.† A compliance examination report covering the year ending June 30, 2010 will be issued separately.
UNDERFUNDING OF THE SYSTEM
The actuarial accrued liability was valued at $251.8 million at June 30, 2010.† The actuarial value of assets (at smoothed value) totaled approximately $66.2 million at June 30, 2010.† The method for determining the actuarial value of the assets was changed beginning with the June 30, 2009 valuation.† The method was changed from the market value to a smoothed value where the actuarial investment gains or losses for each year are recognized in equal amounts over the ensuing five-year period.
The difference between the actuarial accrued liability and the actuarial value of assets of $185.6 million reflects the unfunded liability of the System at June 30, 2010.† The System had a funded ratio (at smoothed value) of 26.3% at June 30, 2010.† When using the market value, the System would have had a funded ratio of 21.8% at June 30, 2010.
LEGISLATIVE CHANGE TO PENSION CODE
Public Act 96-0889, which was signed into law April 2010, adds a new section to the Pension Code that applies different benefits to anyone first hired in a position covered by the System on or after January 1, 2011.† Changes in the pension law include initiating a cap on the salaries used to calculate retirement benefits, raising the minimum eligibility to draw a retirement benefit to age 67 with at least 8 years of service or age 62 with at least 8 years of service credit with a reduced annuity, and limiting cost-of-living annuity adjustments to the lesser of 3% or the annual increase in the Consumer Price Index, whichever is less.† The pension law changes do not apply to anyone who has System service prior to January 1, 2011.
The auditors stated the financial statements of the General Assembly Retirement System of the State of Illinois as of June 30, 2010, and for the year then ended, are fairly stated in all material respects.
WILLIAM G. HOLLAND
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were BKD, LLP.