REPORT DIGEST TEACHERS’ RETIREMENT SYSTEM OF THE STATE OF ILLINOIS FINANCIAL AUDIT For the Year Ended: June 30, 2013 Release Date: January 8, 2014 Summary of Findings: Total this audit: 0 Total last audit: 0 Repeated from last audit: 0 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 INTRODUCTION This digest covers our financial statement audit of Teachers’ Retirement System of the State of Illinois (System) for the year ended June 30, 2013. A report on the results of the compliance examination covering the year ended June 30, 2013 will be issued in a separate report at a later date. FUNDED RATIO The actuarial accrued liability was valued at $93.9 billion at June 30, 2013. The actuarial value of assets (at smoothed value) totaled approximately $38.2 billion at June 30, 2013. The method for determining the actuarial value of the assets was changed beginning with the June 30, 2009 valuation 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 $55.7 billion reflects the unfunded liability of the System at June 30, 2013. The System had a funded ratio (at smoothed value) of 40.6% at June 30, 2013. When using the market value the System would have had a funded ratio of 42.5% at June 30, 2013. AUDITORS’ OPINION The auditors stated the financial statements of the Teachers’ Retirement System of the State of Illinois as of June 30, 2013, and for the year then ended, are presented fairly in all material respects. WILLIAM G. HOLLAND, Auditor General WGH:RPU SPECIAL ASSISTANT AUDITORS Our special assistant auditors for this audit were McGladrey LLP.