REPORT DIGEST

 

TEACHERSí RETIREMENT SYSTEM OF THE STATE OF ILLINOIS

 

COMPLIANCE EXAMINATION

For the Year Ended:

June 30, 2006

 

Summary of Findings:

 

Total findings this report††††††††††† 0

Total findings last report††††††††††† 1

Repeated findings†††††††              0

 

 

Release Date:

April 17, 2007

 

 

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 the Full Report

are also available on

the worldwide web at

http://www.state.il.us/auditor

 

INTRODUCTION

 

††††† This digest covers our compliance attestation examination of the Teachersí Retirement System (System) for the year ended June 30, 2006. A financial audit covering the year ending June 30, 2006 was issued separately. There were no material findings of noncompliance disclosed during our testing.We commend the System for maintaining effective internal controls.

 

FUNDING LEGISLATION

 

††††† In June 2005, Public Act 94-0004 became law.This legislation further modified the funding plan of the System by reducing the amount of required employer (State) contributions for fiscal year 2006 and 2007 that would have otherwise been required under the previous funding legislation.The State contributions decreased approximately $372.4 million from $906.7 million in fiscal year 2005 to $534.3 million in fiscal years 2006.

 

AUDITORSí OPINION

 

††††† We conducted a compliance attestation examination of the System for the year ended June 30, 2006 as required by the Illinois State Auditing Act.

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:RPU:pp

 

SPECIAL ASSISTANT AUDITORS

 

††††† BKD LLP were our special assistant auditors for this engagement.

 

{Financial Data and Supplementary Information are summarized on the reverse page.}

 

 

 


TEACHERS' RETIREMENT SYSTEM OF ILLINOIS

COMPLIANCE ATTESTATION EXAMINATION

YEAR ENDED JUNE 30, 2006

OPERATING STATEMENT ANALYSIS

FY 2006

FY 2005

REVENUES: Contributions - Members.....................................................

†††††††††††††††††††††††† Contributions - State of Illinois........................................

†††††††††††††††††††††††† Contributions - School Districts.......................................

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

†††††††††††††††††††††††† Investment Income - Appreciation in Fair Value...........

†††††††††††††††††††††††† Investment Income - Income From Investments............

††††††††††††††††††††††††† †Total Investment Income................................................

†††††††††††††††††††††††† Investment Expense...........................................................

††††††††††††††† ††††††††††† Total Revenues................................................................

EXPENSES:Benefits...................................................................................

†††††††††† †††††††††††† Refunds................................................................................

Administrative Expenses....................................................

††††††††† ††††††††††††††††† Total Expenses..................................................................

Revenue over Expenses....................................................

$†† 799,034,336

534,305,256

†† 123,542,608 

$1,456,882,200††

2,971,529,661

1,153,956,504  

$4,125,486,165

†† 132,196,285 

$5,450,172,080 

$2,877,230,697

57,967,063

†††† 15,303,370 

$2,950,501,130

$2,499,670,950

$ ††761,790,009 

906,749,310

 148,813,036 

$1,817,352,355 

2,569,878,360

†† 875,057,684 

$3,444,936,044

†† 114,896,886 

$5,147,391,513 

$2,533,102,848

59,395,758

  14,403,715 

$2,606,902,321

$2,540,489,192

SCHEDULE OF INVESTMENT PORTFOLIO - Fair Value

JUNE 30, 2006

JUNE 30, 2005

Equities:†††††††††† Common Stocks, U.S. Equities.........................................

Common Stocks, Non - U.S. Equities ............................

Preferred Stocks, U.S. Equities ......................................

Preferred Stocks, Non - U.S. Equities............................

Total Equities............................................................

Fixed Income:U.S. Government, U.S. Treasuries...................................

U.S. Government, Federal Agencies..............................

U.S. Government, Municipals (taxable).........................

U.S. Government, Index Linked Bonds..........................

U.S. Government, Backed Mortgages...........................

U.S. Corporate: Asset Backed Securities......................

U.S. Corporate: Commercial Backed Mortgages..........

U.S. Corporate: Collateralized Mortgages.....................

U.S. Corporate: Commingled / Closed End funds........

U.S. Corporate: Convertible Bonds................................

U.S. Corporate: Credit Obligations.................................

Swaps / Swaptions...........................................................

International Notes and Bonds......................................

Total Fixed Income...................................................

Real Estate.....................................................................................................

Short Term Investments..............................................................................

Private Equity...............................................................................................

Foreign Currency.........................................................................................

†††† TOTAL INVESTMENTS.......................................................................

$12,575,262,796 

7,244,296,966

37,767,710

†††† 174,064,874

$20,031,392,346

1,433,704,715

1,612,335,642

11,619,751

263,914,841

2,818,412,775

721,905,881

527,255,346†††

781,486,169

77,089,595

2,945,437

1,633,589,444

(3,157,583)

†††† 656,883,773

$10,537,985,786

3,946,280,351

1,516,251,424

1,513,997,646

†††††† 34,040,496

$37,579,948,049

$12,499,580,367 

6,118,615,710

60,156,653

†††† 108,842,145

$18,787,194,875

1,957,811,175

1,331,356,248

12,527,227

346,564,816

2,371,367,541

614,698,386

287,002,709

587,153,543

668,564,763

0

1,488,993,121

0

†††† 659,701,554

$10,325,741,083

3,525,456,881

1,413,132,556

1,068,633,225

†††††† 28,166,730

$35,148,325,350

iNVESTMENTS USED FOR Benefits and Expenses

FY 2006

FY 2005

CONTRIBUTIONS:†† Member/Participants................................................

††††††††††† Employers..............................................................

State of Illinois Appropriations ........................

†††††††††† Total Contributions (1).................................

DEDUCTIONS:†††††††† Benefits.......................................................................

Refunds....................................................................

††††††††††††††††††††††††††† Administration........................................................

Total Deductions (2)......................................

Investments used to Pay Benefits and Expenses (1)-(2)..........................

$††† 799,034,336††

123,542,608

†††† 534,305,256††

$1,456,882,200

$2,877,230,697

57,967,063

†††††† 15,303,370†††

$2,950,501,130

$(1,493,618,930)

$†† 761,790,009

148,813,036

†† 906,749,310

$1,817,352,355

$2,533,102,848

59,395,758

†††† 14,403,715

$2,606,902,321

$(789,549,966)

SUPPLEMENTARY INFORMATION

FY 2006

FY 2005

Total investment manager fees..................................................................

Total time weighted return on investments (unaudited)........................

Average Number of System Employees...................................................

Number of Retirement Annuitants............................................................

Value of General Obligation Bond, Pension Series 2003 investments.

$120,384,422

11.8%

169

75,747

$5,444,473,959

$104,221,360

10.8%

168

73,464

$5,187,826,491

EXECUTIVE DIRECTOR

 

During Engagement Period: Jon Bauman

Currently:Jon Bauman