REPORT DIGEST


STATE UNIVERSITIES RETIREMENT SYSTEM OF ILLINOIS



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

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 $1,624 million at June 30, 1998. The System's funded ratio at that date was 85.8%.
  • The rate at which SURS members accrue retirement benefits changed from a step rate formula to a flat rate formula effective July 7, 1997.

 







Unfunded Liability at June 30, 1998 Totals $1,624 million




New benefit formula





New defined contribution Optional Retirement Plan

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.

UNDERFUNDING OF THE SYSTEM

The actuarial accrued liability was valued at $11,416 million at June 30, 1998. The actuarial value of assets (at market) totaled approximately $9,792 million at June 30, 1998. The difference between the liability and the assets of $1,624 million reflects the unfunded liability of the System at June 30, 1998. The State Universities Retirement System had a funded ratio of 85.8% at June 30, 1998.

BENEFIT RATE CHANGE

On July 7, 1997, Governor Edgar signed Public Act 90-0065 which contained numerous provisions affecting the System. The most significant change involved the System's transition from a step rate retirement benefit formula to a flat rate retirement benefit formula. The increased retirement benefit formula is applicable to all eligible members with a retirement effective date on and after January 1, 1998.

OPTIONAL RETIREMENT PLAN

On August 16, 1997, Governor Edgar signed Public Act 90-448 to establish a defined contribution Optional Retirement Plan (ORP). In addition, an alternative defined benefit program known as "Portable SURS" was established. These changes allow SURS members more choice in benefits offered, and also gives more freedom to assume an increased level of responsibility in the planning and management of their retirement assets.

AUDITORS' OPINION

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



_____________________________________
WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Arthur Andersen LLP were our special assistant auditors for this audit.