TRS assets are held in trust and are invested
for exclusive benefit of plan members. We started FY 2015 on July 1, 2014 with
$45,824,382,514 and ended on June 30, 2015 with $46,406,915,593. The TRS
investment portfolio returned 4.0% and our assets increased approximately $664
million during the year. Our funded ratio also improved from 40.6% to 42% for
the year.
Statement of Changes in Net Positions Ending June 30, 2015:
Additions:
Contributions from Active Teachers
|
$935,451,049
|
State of Illinois
|
3,377,664,945
|
Federal Funds
|
69,764.609
|
School districts (early retirement, 2.2 and
excess salary and sick leave)
|
5,285,516
|
Total Contributions
|
4,458,707,579
|
Net Income from Investments
|
1,770,549,533
|
Total Additions
|
6,229.257,112
|
Deductions
|
|
Retirement Benefits
|
5,281,221,313
|
Survivor Benefits
|
224,779,380
|
Disability Benefits
|
30,398,754
|
Refunds (contributions returned to
in-actives)
|
88,637,736
|
Administrative Expenses (total cost of
running TRS)
|
21,686,860
|
Total
Deductions:
|
5,646,724,033
|
You should note that while our total
contributions for the year came to $4,458,707,579, our deductions were
$5,646,724,003, an imbalance of over $1.19 billion. Fortunately, that was more
than made by our investment return of $1.77 billion. TRS must make at least
2.5% on our investments just to break even for the year.
TRS Returns for calendar year 2015:
Illinois Teachers Pension Fund made 1.1% for
2015, which put the fund in the upper 10 percent of its peers. The average
large public pensions for the last calendar year lost 2.1%. What made the
difference for us was our greater reliance on both real estate and alternative
investments. Our return for three years was 7.6%; five years 7.6%; and ten
years 5.6%. Multiyear returns are annualized. The board set the expected rate
of return at 7.5% last year.
TRS' best performing
asset class for the year ending December 31 was real estate, which returned
14.8%. Private equity followed with 3% and hedge funds returned 2.8%.
International equity produced the worst return at -4.9%, real return at -4.6%,
and global fixed income off at -04%. The key to investing today is diversity.
In years past, pension fund investments were limited to stocks and bonds and we
would have had a poor year if those rules were still in place. Of course because
we owned more real estate, our losses in 2008 and 2009 were greater than many other
pension funds.
Though we still do not have a budget for the
fiscal year, a continuing resolution mandates that state will pay $6.7 billion
to the five pension funds and specifically $3.7 billion to TRS. As in other
years, the state missed its July contribution, gave us only half of August, and
skipped November, so they owe us over $700 million. Illinois Comptroller told
us last fall that the state's goal was to make us whole with the April returns
on state taxes. The very real problem for Illinois is that their expected
revenue for this year in the GR fund is only $32 billion, and the pension
payments are over 20% of their total money coming in. In the recovery after the
Great Recession, the average public state pension has climbed back up to low
80%. Public pensions in Illinois are, with the exception of those funds in
Puerto Rico, the lowest in the nation and the state is challenged to make its
current contributions. The need for the state, the Governor, and the leaders of
the General Assembly to come together to work for a real solution for Illinois
grows with the passage of every day.
Retirees by benefit ranges — August, 2015:
Range
|
Numbers
|
Percent
|
Below $50,000
|
49,881
|
47.8%
|
$50,000 - $99,999
|
47,211
|
45.2%
|
$100,000 - $149,999
|
6,721
|
6.4%
|
$150,000 - $199,999
|
435
|
0.4%
|
$200,000 - $249,999
|
77
|
0.07%
|
$250,000
|
16
|
0.015%
|
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