REPORT HIGHLIGHTS

INFORMATION SUBMITTED BY THE RETIREMENT
PLAN FOR CHICAGO TRANSIT AUTHORITY
EMPLOYEES

ANNUAL REVIEW

Release Date:  November 25, 2025

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

BACKGROUND:

Signed into law in 2008, Public Act 95-708
made sweeping changes to the Retirement
Plan for CTA Employees.  It required that
the contributions from the CTA and
employees must be at a level so that the
funded ratio of the Retirement Plan does
not decline below 60 percent in any year
before 2040, and achieves 90 percent
funding by the end of 2059.

The Retirement Plan is required to submit
to the Auditor General an audit, an annual
statement, and an actuarial statement by
September 30 of each year.  The Retirement
Plan must determine the estimated funded
ratio and must determine the employee and
employer contribution rates needed to meet
the requirements established by the Pension
Code.

The Auditor General is required to review
the documents and review the actuarial
determination and assumptions to determine
whether they are unreasonable in the
aggregate.

Key Findings:

• The Retirement Plan submitted the
required documents by the September 30
deadline.

• The OAG and our consultant, Aon, reviewed
the Retirement Plan’s assumptions contained
in the January 1, 2025 Actuarial Valuation
and concluded that they were not
unreasonable in the aggregate.  However, we
believe that two of the assumptions,
investment return and inflation, should
continue to be monitored and justified on
an annual basis.  Additionally, we believe
the plan's mortality assumption should be
formally studied, potentially outside the
standard 5-year experience study cycle,
once sufficient mortality experience (after
excluding 2020 and 2021 mortality
experience due to the unique effect of the
COVID-19 pandemic on mortality experience
during those years) has been observed.  We
also recommend the actuary consider
expanding the actuarial assumptions section
of the valuation report to include the
underlying inflation assumption, the
inactive participant retirement rate
assumption, and the new entrant profile
assumptions.

• The investment return assumption was
changed from the prior valuation and was
reduced from 8.25 percent to 7.75 percent.
This was the first time the investment
return assumption has been changed since
2014.  The 7.75 percent investment return
assumption used by the Plan continues to be
higher than most public plans but is
supported by an investment return analysis
conducted by the Plan’s Investment
Consultant and Actuary.

• The funded ratio of the Retirement Plan
as of January 1, 2025, was 51.90 percent,
which is a decrease of 2.49 percent from
the funded ratio of 54.39 percent in the
January 1, 2024 Actuarial Valuation.  When
the funded ratio declines below 60 percent,
the Pension Code requires that contribution
rates be increased so that the funded ratio
is projected to reach 60 percent within 10
years.  The contribution rates certified by
the Board of Trustees for 2026 were
unchanged from the 2025 contribution rates.
For both 2025 and 2026, the employer
contribution rate is 21.590 percent (which
is net of the employer debt service credit
of 6 percent of pay) and the employee
contribution rate is 13.795 percent.  The
January 1, 2025 Actuarial Valuation
concluded that the contribution rates
applicable for Plan year 2026 would result
in the Plan’s funded ratio reaching the
statutorily required 60 percent level
within 10 years (i.e., by 2035).

Key Recommendations:

• We recommend that the investment return
and inflation assumptions continue to be
monitored and justified on an annual basis.

• The plan's mortality assumption should be
formally studied, potentially outside the
standard 5-year experience study cycle,
once sufficient mortality experience (after
excluding 2020 and 2021 mortality
experience due to the unique effect of the
COVID-19 pandemic on mortality experience
during those years) has been observed.

• We recommend the actuary consider
expanding the actuarial assumptions section
of the valuation report to include the
underlying inflation assumption, the
inactive participant retirement rate
assumption, and the new entrant profile
assumptions.

This Annual Review was conducted by OAG
staff with the assistance of our
consultant, Aon.