REPORT DIGEST

 

STATE UNIVERSITIES RETIREMENT SYSTEM

 

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2007

 

Release Date:

January 3, 2008

 

 

 

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

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

®      The unfunded liability of the System was $7,376 million at June 30, 2007.The Systemís funded ratio at that date was 68.4%.

 

®      Public Act 94-0004 became law on June 1, 2005 and modified several retirement benefit calculations for fiscal year 2006 and beyond and established specific dollar amounts to be contributed by the State for fiscal years 2006 and 2007 to the System.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


STATE UNIVERSITIES RETIREMENT SYSTEM

FINANCIAL AUDIT

Year Ended June 30, 2007

 

FINANCIAL OPERATIONS

FY 2007

FY 2006

Additions

††††† Contributions

††††††††††† Participants..............................................

††††††††††† Employer.................................................

††††††††††††††††† Total Contributions.............................

††††† Investment Income

††††††††††† Net appreciation in fair market value.........

††††††††††† Interest....................................................

††††††††††† Dividends.................................................

††††††††††† Securities lending......................................

††††††††††† Less:Investment expense........................

††††††††††††††††† Net Investment Income......................

††††††††††††††††††††††† Total Additions............................

Deductions

††††† Benefits..........................................................

††††† Refunds of contributions.................................

††††† Bond interest expense....................................

††††† Administrative expense...................................

††††††††††††††††††††††† Total Deductions..........................

Net Increase........................................................

 

 

††††††† $303,992,601

††††††††† 294,451,464

††††††† $598,444,065

 

†††† $2,249,927,509

††††††††† 225,548,765

††††††††† 155,508,304

††††††††††††† 4,958,036

†††††††††† (38,111,626)

†††† $2,597,830,988

†††† $3,196,275,053

 

†††† $1,180,574,674

††††††††††† 53,407,456

††††††††††††††††††††††††††† -

††††††††††† 11,704,567

†††† $1,245,686,697

†††† $1,950,588,356

 

 

 

††††††† $292,392,188

††††††††† 209,651,367

††††††† $502,043,555

 

†††† $1,281,932,946

††††††††† 183,792,025

††††††††† 126,245,756

††††††††††††† 4,525,486

†††††††††† (29,685,842)

†††† $1,566,810,371

†††† $2,068,853,926

 

†††† $1,086,565,418

††††††††††† 51,422,635

†††††††††††††††† 179,640

††††††††††† 11,982,284

†††† $1,150,149,977

††††††† $918,703,949

†††††††††††††††††††††††††††††

INVESTMENT PORTFOLIO ANALYSIS(Fair Value)

JUNE 30, 2007

JUNE 30, 2006

Equities††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††

Fixed income.......................................................

Real estate...........................................................

Mutual funds and variable annuities.......................

††††† Total .............................................................

†† $10,242,225,544

†††††† 5,180,583,996

††††††††† 328,033,841

††††††††† 533,000,506

†† $16,283,843,887

†††† $9,692,422,530

†††††† 3,816,079,807

††††††††† 131,569,925

††††††††† 405,332,778

†† $14,045,405,040

 

FUNDING PROGRESS (millions)

June 30, 2007

June 30, 2006

Actuarial Accrued Liability...................................

Actuarial Value of Assets.....................................

Unfunded Actuarial Accrued Liability....................

Funded Ratio.......................................................

†††††††††††††††† $23,362.1

†††††††††††††††††† 15,985.7

†††††††††††††††††† $7,376.4

††††††††††††††††††††††† 68.4%

†††††††††††††††† $21,688.9

†††††††††††††††††† 14,175.1

†††††††††††††††††† $7,513.8

††††††††††††††††††††††† 65.4%

SUPPLEMENTARY INFORMATION

June 30, 2007

June 30, 2006

Benefit recipients..................................................

Active members...................................................

Inactive members.................................................

††††† Total..............................................................

43,443

81,691

75,261

200,395

41,667

80,869

72,606

195,142

 

EXECUTIVE DIRECTOR

 

 

During Audit Period:Dan M. Slack

Currently:Dan M. Slack


 

 


 

 

 

 

 

 

 

 

 

Unfunded Liability at June 30, 2007 totals $7,376 million

 

 

 

 

 

 

 

State contributions were reduced for fiscal year 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

 

††††† This digest covers our financial audit of the System for the year ended June 30, 2007.A compliance examination report covering the year ending June 30, 2007 will be issued separately.

†††††

UNDERFUNDING OF THE SYSTEM

 

††††† The actuarial accrued liability was valued at $23,362 million at June 30, 2007.The actuarial value of assets (at market) totaled approximately $15,986 million at June 30, 2007.The difference between the liability and the assets of $7,376 million reflects the unfunded liability of the System at June 30, 2007.The State Universities Retirement System had a funded ratio of 68.4% at June 30, 2007.

 

LEGISLATION AFFECTING THE SYSTEM

 

††††† Public Act 94-0004 became law June 1, 2005 and affected the System by modifying several retirement benefit calculations for fiscal year 2006 and beyond.In addition, the Act also established specific dollar amounts to be contributed by the State for fiscal years 2006 and 2007, as opposed to the State contribution being calculated based on the previous funding formula.State contributions for fiscal year 2006 were reduced approximately $158 million and were reduced approximately $140 million in fiscal year 2007.State required contributions will be higher in future years to make up for the two-year funding reduction.

 

AUDITORS' OPINION

 

††††† Our auditors state the June 30, 2007 financial statements of the System are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:KMA:pp

 

SPECIAL ASSISTANT AUDITORS

 

††††† BKD, LLP were our special assistant auditors for this audit.