REPORT HIGHLIGHTS

INFORMATION SUBMITTED BY THE CHICAGO
TRANSIT AUTHORITY’S RETIREE HEALTH CARE
TRUST

ANNUAL REVIEW

Release Date:  December 23, 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:

The Illinois State Auditing Act (30 ILCS
5/3-2.3(f)) requires the Auditor General to
annually examine the information on the
funding level of the Retiree Health Care
Trust (RHCT or Trust) submitted pursuant to
Section 22-101B(b)(3)(iii) of the Illinois
Pension Code.

If the Retiree Health Care Trust projects a
funding shortfall, it shall provide a plan
which may (1) increase contributions by
employees, retirees, dependents, or
survivors; (2) decrease benefits; (3) make
other plan changes; or (4) any combination
thereof to cure the shortfall within 10
years.  If the Retiree Health Care Trust
projects a surplus, it may decrease
contributions, increase benefits, or make
other plan changes, to the extent of the
surplus.

KEY FINDINGS:

• The Retiree Health Care Trust submitted
its Actuarial Valuation Report as of
January 1, 2025 to the Office of the
Auditor General on September 25, 2025.

• The Report concluded that the actuarial
present value of projected contributions,
trust income, and assets, in excess of the
statutory reserve, exceeded the actuarial
present value of the projected benefits.
Consequently, no change in benefits or
contributions was required.

• With the assistance of our consulting
actuary, Aon, we examined the assumptions
in the Retiree Health Care Trust’s
Actuarial Valuation Report and found that
they were not unreasonable in the
aggregate.

KEY RECOMMENDATIONS:

• The investment return and inflation
assumptions should continue to be monitored
and justified on an annual basis.
• The Retirement Plan should conduct a
mortality experience study, potentially
outside the standard five-year experience
study cycle, once sufficient mortality
experience has been observed (excluding
2020 and 2021 experience due to the unique
effect of the COVID-19 pandemic on
mortality experience during those years).
As part of the next experience study, the
Trust actuary should consider updating to
the latest base mortality tables released
by the Society of Actuaries, the Pub-2016
base mortality tables.

• The trend rate assumption should be
reviewed on a by component basis each year
and incorporated in the valuation report.

• Once experience has been observed, the
Trust actuary should develop unique claims
and trend assumptions for the vision and
hearing benefits.

• Additional documentation should be added
to the Actuarial Valuation Report as
follows:
     ­ Documentation of the inflation
     assumption underlying the salary
     increase assumption and underlying the
     expected return.
     ­ Documentation on how regulatory
     changes have been (or have not been)
     incorporated (e.g., the Inflation
     Reduction Act (IRA) and the Centers
     for Medicare & Medicaid Services (CMS)
     fee-for-service normalization).
     ­ Documentation on Medicare premiums.

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