REPORT DIGEST

GENERAL ASSEMBLY RETIREMENT SYSTEM

COMPLIANCE EXAMINATION

For the Year Ended:

June 30, 2004

Summary of Findings:

Total findings this report            0

Total findings last report            0

Repeated findings                      0

Release Date:

April 28, 2005

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 is also available on

the worldwide web at

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

INTRODUCTION

      This digest covers our compliance examination of the General Assembly Retirement System (System) for the year ended June 30, 2004.  A financial audit covering the year ending June 30, 2004 was 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 testing.  We commend the System for maintaining effective internal controls.

PENSION BONDS

     On April 7, 2003, Governor Rod Blagojevich signed House Bill 2660 into law as Public Act 93-0002.  This new law authorized the State of Illinois to issue $10 billion of General Obligation Bonds for the purpose of making contributions to designated retirement systems, which included the General Assembly Retirement System.  

     On July 1, 2003, the System received an allocation of $27,073,983 from the pension bond proceeds.  The System deposited the allocation into the master trust account with the Illinois State Board of Investments (Board) on July 2, 2003.  The Board estimated the return of the pension bond proceeds earned an annual rate of return of 15.39% during the year ended June 30, 2004.      

AUDITORS’ OPINION

      We conducted a compliance attestation examination of the System for the year ended June 30, 2004 as required by the Illinois State Auditing Act.  A financial audit covering the year ending June 30, 2004 was issued separately.

_____________________________________

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.}

OPERATING STATEMENT ANALYSIS

FY 2004

FY 2003

REVENUES: Contributions – Participants............................

Contributions – appropriations & other...........

Total Contributions..................................

Net investment income.................................

Net appreciation (depreciation) in fair

  value of investments..................................

            Interest earned on cash balances...................

                        Total Revenue.......................................

EXPENSES:  Benefits - Retirement annuities.....................

Benefits - Survivors' annuities.......................

                             Total Benefits......................................

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

            Administration..............................................

            Total Expenses.......................................

Revenues over (under) expenses...................

$ 1,596,695

32,951,754

$34,548,449

1,327,918

10,499,610

       24,181 

$46,400,158 

$10,299,820 

  2,166,151

$12,465,971 

97,835

     304,652

$12,868,458  

$33,531,700

$ 1,954,169 5,433,781

$ 7,387,950

1,071,966

(1,340,215)

  35,155

$ 7,154,856

$ 9,159,794

 1,971,683

$11,131,477

106,713

290,931

$11,529,121

$(4,374,26

ANALYSIS OF PLAN INVESTMENTS

FY 2004

FY 2003

Balance at beginning of year, at fair value.............................

Net cash transferred to (from) investments............................

Net investments (1).....................................................

Investment income – interest, dividends and other.................

Investment expenses..........................................................

Net Investment income (2)..........................................

Net realized gain on sale of investments...............................

Net unrealized gain (loss) on investments ............................

Net appreciation (depreciation) in fair

  value of investments (3).............................................

Total net investment gain (loss) (4), (2) + (3).................

Balance at end of year, at fair value (1) + (4)...............

$47,386,171 

 22,073,983

$69,460,154 

1,468,459

    (140,541)

$  1,327,918 

4,795,760

  5,703,850

$10,499,610

$11,827,528

$81,287,682

$52,154,420

(4,500,000)

$47,654,420

1,176,330

(104,364)

$  1,071,966

2,581,426

(3,921,641)

$(1,340,215)

$   (268,249)

$ 47,386,171

SELECTED ACCOUNT BALANCES

JUNE 30, 2004

JUNE 30, 2003

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..................................................................

$     2,029,406

4,344

81,287,682

947

      (114,377)

$     83,208,002

$(207,592,692)

$(124,384,690)

$      1,614,768

791,696

47,386,171

1,546

       (117,879)

$     49,676,302

$(196,510,067)

$(146,833,765)

SUPPLEMENTARY INFORMATION (unaudited)

FY 2004

FY 2003

Retirees and beneficiaries currently receiving benefits..............

Total members ......................................................................

Total active members.............................................................

Total return on investments.....................................................

397

280

181

16.4%

383

295

182

.3%

EXECUTIVE SECRETARY

During Audit Period:  Robert V. Knox

Currently:  Robert V. Knox