REPORT DIGEST

 

TEACHERSí

RETIREMENT SYSTEM

OF THE STATE OF ILLINOIS

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2008

 

 

 

Release Date:

January 15, 2009

 

 

 

 

 

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.auditor.illinois.gov

 

 

 

INTRODUCTION

 

††††† This digest covers our financial audit of the Teachersí Retirement System of the State of Illinois (System) for the year ended June 30, 2008.A report on the results of our compliance attestation examination for the year ending June 30, 2008 is being issued separately.

 

UNDERFUNDING OF THE SYSTEM

 

††††† The actuarial accrued liability was valued at $68.6 billion at June 30, 2008.The actuarial value of assets (at fair value) totaled approximately $38.4 billion at June 30, 2008.The difference between the liability and the assets of $30.2 billion reflects the unfunded liability of the System at June 30, 2008.The System had a funded ratio of 56.0% at June 30, 2008.

 

SUBSEQUENT EVENT

 

†††† Subsequent to the Systemís June 30, 2008 fiscal year end the investment portfolio experienced a significant decline due to unprecedented unfavorable market conditions.Based on unaudited information provided by the System the investment portfolio declined approximately $10 billion from the June 30, 2008 balances based on the readily determinable market values provided by the System at November 30, 2008.

 

AUDITORS' OPINION

 

††††† Our auditors state the June 30, 2008 financial statements of the System are fairly presented.

 

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:RPU:pp

 

SPECIAL ASSISTANT AUDITORS

 

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

 

 

{Financial data is summarized on the reverse page.}

 

 

 

TEACHERS' RETIREMENT SYSTEM OF ILLINOIS

FINANCIAL AUDIT

FOR THE YEAR ENDED JUNE 30, 2008

 

OPERATING STATEMENT ANALYSIS

FY 2008

FY 2007

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

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

†††††††††††††††††† ††Contributions - School Districts / Employers...................

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

†††††††††††††††††††† Investment Income Ė Increase / (Decrease) in Fair Value

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

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

Total Investment Income / (Loss)................................

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

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

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

†† Administrative Expenses................................................

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

Revenue Over / (Under) Expenses.................................

$ †††865,400,168

1,041,114,825

†† ††130,673,629††

$ ††2,037,188,622

(3,235,738,717)

1,409,751,363

(188,915,012) 

$(2,014,902,366)

$††††††† 22,286,256

$†† 3,423,981,732

60,285,624

†††††† 16,613,364 

$ ††3,500,880,720  $(3,478,594,464)

$††† 826,249,007 

737,670,628

†† 115,915,040

$1,679,834,675

5,597,334,135

1,564,003,346 

(330,013,045)

$7,161,337,481

$8,511,159,111

$3,111,752,675

59,731,909

†††† 15,246,203 

$3,186,730,787

$5,324,428,324

INVESTMENT PORTFOLIO ANALYSIS - Fair Value

JUNE 30, 2008

JUNE 30, 2007

Fixed Income....................................................................................

Equities.............................................................................................

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

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

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

Real Return.......................................................................................

Absolute Return................................................................................

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

Derivatives........................................................................................

Total Investment Portfolio..................................................................

$8,970,063,123 

19,343,733,243

4,794,916,293

1,043,222,891

2,399,224,145

2,118,735,890

504,224,094 

60,605,839

††† (25,678,522) 

$39,209,046,996

$10,140,998,668 

23,487,980,117

4,693,519,131

1,196,341,853

1,894,311,762

0

490,000,000              49,081,933

††††††††††† 847,479

$41,953,080,943

ADMINISTRATIVE EXPENSES

FY 2008

FY 2007

Personal Services..............................................................................

Professional Services.........................................................................

Postage.............................................................................................

Machine Repair and Rental................................................................

Other Contractual Services................................................................

Commodities.....................................................................................

Occupancy Expense..........................................................................

Provision for Depreciation..................................................................

Loss on Disposal of Equipment...........................................................

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

$12,190,988†††

1,164,400

481,642

660,156

1,062,093

457,052

210,654

386165

††††††††††† 214

$16,613,364

$11,350,376†††

911,832

407,568

593,364

1,024,358

447,519

173,508

336,969

            709 

$15,246,203

SELECTED ACCOUNT BALANCES

JUNE 30, 2008

JUNE 30, 2007

Cash.................................................................................................

Total Accounts Receivable & Prepaid Expenses.................................

Property and Equipment, net...............................................................

Benefits and Refunds Payable............................................................

Administrative and Investment Expenses Payable................................

Payable to Brokers for Unsettled Trades, net......................................

$3,668,043

$404,110,007

$2,548,814

$3,996,767                $148,806,825

$1,035,846,981

$3,548,548

$385,352,096

$2,391,619 

$7,664,796

$134,210,939

$293,179,720

FUNDING PROGRESS

JUNE 30, 2008

JUNE 30, 2007

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

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

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

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

$68,632,367,000

38,430,723,000

$30,201,644,000

56.0%

$65,648,395,000

41,909,318,000

$23,739,077,000

63.8%

EXECUTIVE DIRECTOR

 

 

During Engagement Period: Jon Bauman

Currently:Jon Bauman