The Teachers' Retirement System of Illinois Approves $5.9 Billion State Contribution for Fiscal Year 2023

SPRINGFIELD, IL – The TRS Board of Trustees has given final approval to a fiscal year 2023 state government contribution to TRS of $5.89 billion.

The TRS Board is required each year to calculate and certify the state’s annual contribution to the System for the next fiscal year. A preliminary contribution calculated in October was reviewed by the State Actuary, Cheiron, Inc., of McLean, Virginia, prior to final approval by TRS. The certified contribution is now forwarded to state officials for inclusion in the FY 2023 state budget.

The FY 2023 contribution is a 4 percent increase over the state’s $5.69 billion contribution for the current fiscal year. By comparison, the increase in the state’s contribution to TRS between FY 2021 and FY 2022 was 10.7 percent.

Led by a strong +25.5 percent net investment return in FY 2021 and a stable funding commitment from state government for the last few years, the System’s unfunded liability has 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. The TRS funded ratio inched up during the year to 42.5 percent from 40.5 percent.

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. This led to a $70 million reduction in the required state contribution for FY 2023.

About Teachers’ Retirement System

               The Teachers’ Retirement System of the State of Illinois is the 42^nd 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 $64 billion as of September 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