State Universities Retirement System. Financial Audit for the Year Ended June 30, 2011

              Office of the Auditor General, Iles Park Plaza, 740 E. Ash St., Springfield, IL 62703 • Tel: 217-782-6046 or TTY 888-261-2887
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STATE UNIVERSITIES RETIREMENT SYSTEM
Financial Audit
For the Year Ended: June 30, 2011
Summary of Findings:
Total this audit:
Total last audit:
Repeated from last audit:
0
0
0
Release Date: January 11, 2012
INTRODUCTION
This digest covers our financial audit of the System for the year ended June 30, 2011. A compliance examination report covering the year ending June 30, 2011 will be issued separately.
FUNDED RATIO
The actuarial accrued liability was valued at $31.5 billion at June 30, 2011. The actuarial value of assets (at smoothed value) totaled approximately $13.9 billion at June 30, 2011. The method for determining the actuarial value of assets was changed beginning with the June 30, 2009 valuation. The method was changed from the market value to a smoothed value where the actuarial gains or losses for each year are recognized in equal amounts over the ensuing five-year period.
The difference between the actuarial accrued liability and the actuarial value of assets of $17.6 billion reflects the unfunded liability of the System at June 30, 2011. The System had a funded ratio (at smoothed value) of 44.3% at June 30, 2011. When using the market value, the System would have a funded ratio of 45.3%.
{Expenditures and Activity Measures are summarized on the reverse page.}2
FINANCIAL OPERATIONS
Additions
Contributions
Participants....................................................................
309,934,408$
323,570,314$
Employer.......................................................................
818,435,806
739,711,843
Total Contributions....................................................
1,128,370,214$
1,063,282,157$
Investment Income
Net appreciation in fair market value............................
2,646,764,487$
1,294,472,087$
Interest...........................................................................
192,587,174
324,588,475
Dividends......................................................................
181,007,663
153,916,871
Securities lending..........................................................
5,347,769
6,534,929
Less: Investment expense.............................................
(52,092,669)
(54,177,017)
Net Investment Income (Loss)...................................
2,973,614,424
1,725,335,345
Total Additions.......................................................
4,101,984,638$
2,788,617,502$
Deductions
Benefits............................................................................
1,622,452,595$
1,483,740,506$
Refund of contributions....................................................
73,895,151
57,467,779
Administrative expense....................................................
12,618,044
12,455,584
Total Deductions....................................................
1,708,965,790$
1,553,663,869$
Net Increase.........................................................................
2,393,018,848$
1,234,953,633$
INVESTMENT PORTFOLIO ANALYSIS
(Fair Value)
JUNE 30, 2011
JUNE 30, 2010
Equities................................................................................
10,131,613,173$
7,634,359,192$
Fixed income.......................................................................
3,210,020,243
3,596,346,644
Real estate............................................................................
375,589,750
266,184,186
Mutual funds and variable annuities....................................
890,678,243
667,015,195
Total........................................................................
14,607,901,409$
12,163,905,217$
FUNDING PROGRESS (Millions)
JUNE 30, 2011
JUNE 30, 2010
Actuarial Accrued Liability.................................................
31,514.3$
30,120.4$
Actuarial Value of Assets....................................................
13,945.7
13,966.6
Unfunded Actuarial Accrued Liability................................
17,568.6$
16,153.5$
Funded Ratio.......................................................................
44.3%
46.4%
SUPPLEMENTARY INFORMATION
JUNE 30, 2011
JUNE 30, 2010
Benefit recipients.................................................................
51,552
49,056
Active members...................................................................
81,611
82,742
Inactive members.................................................................
79,922
80,438
Total........................................................................
213,085
212,236
During Audit Period and Current: William Mabe
STATE UNIVERSITIES RETIREMENT SYSTEM
FINANCIAL AUDIT
For The Year Ended June 30, 2011
AGENCY DIRECTOR
2010
20113
AUDITORS’ OPINION
Our auditors state the June 30, 2011 financial statements of the State Universities Retirement System are presented fairly in all material respects.
___________________________________
WILLIAM G. HOLLAND
Auditor General
WGH:TLK
SPECIAL ASSISTANT AUDITORS
McGladrey & Pullen LLP were our Special Assistant Auditors for this engagement.