REPORT DIGEST

FINANCIAL AUDIT
For the Year Ended:
June 30, 1998






Release Date:
January 27, 1999


State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217) 782-6046

To obtain a copy of the Report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046 or TDD (217) 524-4646

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 $390 million at June 30, 1998. The System's funded ratio at that date was 47.7%.

INTRODUCTION

This digest covers our financial audit of the System for the year ended June 30, 1998. A compliance audit covering the year ending June 30, 1998 is being issued separately.

The System shares administrative staff and common administrative expenses with the General Assembly Retirement System (GARS). The GARS reimburses the System for 40 percent of the administrative costs incurred.

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

UNDERFUNDING OF THE SYSTEM

The actuarial accrued liability was valued at $747 million at June 30, 1998. The actuarial value of assets (at market) totaled approximately $357 million at June 30, 1998. The difference between the liability and the assets of $390 million reflects the unfunded liability of the System at June 30, 1998. The Judges' Retirement System had a funded ratio of 47.7% at June 30, 1998.

AUDITORS' OPINION

Our auditors state that the June 30, 1998 financial statements of the System are fairly presented.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

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