And the TRS Board
of Trustees approved a state government contribution for the System of $5.89
billion for FY 2023, a 4 percent increase over the state’s $5.69 billion
contribution for the current fiscal year.
Led by a strong
+25.5 percent net investment return and a stable funding commitment from state
government for the last few years, the System’s unfunded liability decreased
slightly from $80.7 billion to $79.9 billion. TRS ended FY 2021 with a record
$63.9 billion in assets, according to the System’s annual actuarial valuation,
compiled by Segal Consultants, of Chicago.
“While a small
step, the improvement in the funded ratio is a positive move toward bringing
stability to the system’s long-term finances,” said TRS Executive
Director Stan Rupnik. “Any improvement is good news for our members,
but we all realize that there’s still a lot of work ahead of us to sustain this
momentum and reach our goal.”
In the last
decade, the TRS funded ratio averaged 40.7 percent. Projections by Segal show
slow but steady improvements in the funded ratio between FY 2021 and FY 2045,
when state law requires TRS to have a funded ratio of 90 percent.
The funded ratio
reflects the difference in the amount of money TRS has in assets against the
amount of money the System needs to immediately pay all members the full
amounts of benefits they are owed for the rest of time. Altogether, the
System’s FY 2021 total long-term liability is $138.9 billion, a 2.4 percent
increase over the previous year.
While the funded
ratio is important as an official measure of the System’s long-term fiscal
health, it is not a reflection of the System’s current financial ability to pay
benefits. In any given year, TRS only is obligated under state law to pay out
the amount of money owed annually to retired members and other beneficiaries.
During FY 2021, benefits owed totaled $7.4 billion. TRS was more than able to
pay all benefits for the year on time and in full. In fact, for 82 years TRS
has paid all benefits in full and on time.
The actuarial
valuation also revealed that since the 2019 inception of two benefit “buyout”
programs, TRS members have collected $534 million in advance benefit payments,
which has led to a $70 million reduction in the required state contribution in
the new fiscal year.
In other action, the trustees approved a slight increase in the annual target amount of TRS assets that should be administered by investment managers that qualify as Minority and Women-owned Business Enterprises (MWBE). The Board set a new internal goal of 22 percent. The previous year’s MWBE goal was 21 percent and in FY 2021 approximately 24.3 percent of TRS assets were managed by 35 MWBE firms, or a total of $15.5 billion.
The Board also
reviewed the following investment actions:
- The commitment of approximately $105
million to Inflexion Private Equity Partners, of London, United
Kingdom. Inflexion currently manages $150 million in TRS assets.
- The Commitment of $35 million to Sky9
Capital, of Shanghai, China in two funds. The first is $25
million to Sky9 Capital Fund V. The second is $10 million is to Sky9
Capital MVP Fund II. This is a new investment relationship for TRS.
- Within the System’s $9.6 billion Real
Assets Portfolio:
- The commitment of up to $100 million
to The BlackStone Group, of New York, New York. Blackstone
currently administers $620 million in TRS assets.
- The commitment of $60 million to Brasa
Capital Management, of Los Angeles, California. This is a new
investment relationship for TRS.
- The commitment of $200 million to The LaSalle Group, of Chicago. LaSalle
currently administers $6.9 million in TRS assets.
- Within the $15.8 billion Income
Portfolio:
- The commitment of $100 million to Fundamental
Advisors, of New York, New York. This is a new investment
relationship for TRS.
- The commitment of $100 million to IFM
Investors, of Melbourne, Australia. This is a new investment
relationship for TRS.
- The commitment of $75 million to Proterra
Investment Partners, of Minneapolis, Minnesota. Proterra currently
administers $50 million in TRS assets.
- Within the $5.5 billion Diversifying
Strategies Portfolio:
- The partial redemption of approximately
$125 million from Aspect Capital, of London, United Kingdom. Aspect
currently administers $342 million in TRS assets.
- The partial redemption of approximately
$40 million from Graham Capital Management, of Rowayton,
Connecticut. Graham currently administers $440.7 million in TRS
assets.
- The partial redemption of $100 million from Tilden Park Capital Management, of New York, New York. Tilden Park currently administers $286.5 million in TRS assets.
###
About Teachers’
Retirement System
The Teachers’ Retirement System of the State of Illinois is the 42nd largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 434,000 members and had assets of $63.9 billion as of June 30, 2021.
Dave Urbanek
Director of
Communications
Teachers’
Retirement System of the State of Illinois
P.O. Box 19253,
2815 W. Washington Street
Springfield,
Illinois 62794-9253
(217) 814-2177 |
FAX (217) 753-0967 | TDD (800) 526-0844 or 711
durbanek@trsil.org | http://www.trsil.org