REPORT DIGEST

GENERAL ASSEMBLY

RETIREMENT SYSTEM,

STATE OF ILLINOIS

FINANCIAL AUDIT

For the Year Ended:

June 30, 2004

Release Date:

February 2, 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

SYNOPSIS

¨       The unfunded liability of the System was approximately $124 million at June 30, 2004.  The System’s funded ratio at that date was 40.1%.

¨       Approximately $27 million of bond proceeds were deposited into the System’s investment account on July 2, 2003 as a result of P.A. 93-0002.  This new law authorized the State of Illinois to issue $10 billion in General Obligation bonds for the purpose of making contributions to designated retirement systems.

Unfunded liability at June 30, 2004 totals $124 million

$27 million of bond proceeds were deposited into the System’s investment account on July 2, 2003

INTRODUCTION

      This digest covers our financial audit of the System for the year ended June 30, 2004.  A report on the results of our compliance attestation examination for the year ending June 30, 2004 is being issued separately. 

      It should be noted that, pursuant to the Illinois Pension Code, the Illinois State Board of Investment manages the investments of the System.

UNDERFUNDING OF THE SYSTEM

      The actuarial accrued liability was valued at approximately $207 million at June 30, 2004.  The actuarial value of assets (at fair value) totaled approximately $83 million at June 30, 2004.  The difference between the liability and the assets of $124 million reflects the unfunded liability of the System at June 30, 2004.  The General Assembly Retirement System had a funded ratio of 40.1% at June 30, 2004.

PENSION BOND FUNDING

     In fiscal year 2003, Governor Rod Blagojevich and the General Assembly agreed to issue bonds in order to provide funding to the State pension systems.  The General Assembly Retirement System is one of the designated retirement systems.

     The General Assembly Retirement System received an allocation of bond proceeds equal to $27,073,983 on July 1, 2003.  The monies were deposited into its Master Trust account with the Illinois State Board of Investment, on July 2, 2003.

AUDITORS' OPINION

      Our auditors state that the June 30, 2004 financial statements of the System are fairly presented.

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WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

      McGladrey & Pullen LLP were our special assistant auditors for this audit.