REPORT DIGEST
GENERAL ASSEMBLY RETIREMENT SYSTEM
Financial Audit
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
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INTRODUCTION
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.
AUDITORS’ OPINION
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
Auditor General
WGH:AKS
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were BKD, LLP.