REPORT DIGEST

STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS

COMPLIANCE AUDIT
For the Year Ended:
June 30, 1998

Summary of Findings:

Total this audit 0
Total prior audit 0
Repeated from last audit 0

Release Date:
January 27, 1999

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

To obtain a copy of the Report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

INTRODUCTION

This digest covers our compliance audit of the System for the year ended June 30, 1998. A financial audit covering the year ending June 30, 1998 is being issued separately.

It should be noted that, pursuant to the Illinois Pension Code, investments of the System are managed by the Illinois State Board of Investment.

There were no material findings of noncompliance disclosed during our audit tests. We commend the System for maintaining effective fiscal controls.



_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

McGladrey & Pullen, LLP were our special assistant auditors for this audit.

{Financial Information and Activity Measures are summarized on the reverse page.}

STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS
INFORMATION FROM FINANCIAL AND COMPLIANCE AUDITS
TWO YEARS ENDED JUNE 30, 1998

FINANCIAL OPERATIONS

FY 1998

FY 1997

REVENUES
Contributions:
Participants
Employing State agencies
State pension fund

Net investment income
Net appreciation in fair value of investments
Interest earned on cash balances
Total Revenue

EXPENSES
Benefits:

Retirement annuities
Survivors' annuities
Disability benefits
Lump-sum death benefits

Refunds
Administration
Transfers to reciprocating systems
Total Expenses




$155,898,112
191,533,336
9,208,400

223,765,249
851,831,455
4,638,478
$1,436,875,030




$322,676,817
38,184,192
24,711,911
13,867,165

14,812,967
6,154,373
0
$420,407,425




$145,683,543
149,689,714
8,489,800

213,670,347
735,593,840
3,346,821
$1,256,474,065




$298,359,093
35,239,862
23,813,616
11,256,372

12,635,835
5,735,827
86,592
$387,127,197

SELECTED ACCOUNT BALANCES

JUNE 30, 1998

JUNE 30, 1997

Cash
Receivables
Investments, at fair value
Property and equipment, net of accumulated depreciation
Liabilities
Net Assets Held in Trust for Benefits
Actuarial Accrued Liability
Unfunded Liability

$79,514,954
$17,870,937
$6,969,135,972
$3,622,304
$5,649,337
$7,064,494,830
$9,341,897,641
$2,277,402,811

$69,478,145
$14,423,277
$5,965,539,268
$3,771,484
$5,184,949
$6,048,027,225
$7,548,207,778
$1,500,180,553

SUPPLEMENTARY INFORMATION

FY 1998

FY 1997

Number of System employees
Number of retirees and beneficiaries currently
receiving benefits
Inactive members not yet receiving benefits
Current Members:
Vested
Nonvested
Total Return on Investments

80

40,431
3,542

54,237
23,823
18.1%

78

39,231
3,291

53,000
26,697
18.8%

EXECUTIVE SECRETARY
During Audit Period: Michael L. Mory
Currently: Michael L. Mory