Page 48 FINANCIAL
Although the derivative instruments held within the TRS investment portfolio are executed with various counter-parties,
approximately 85 percent of the net market value exposure to credit risk is for non-exchanged traded
derivative contracts held with six counterparties.
TRS maintains statutory reserve accounts in accordance with the provisions of 40 ILCS 5/16‑101 et seq. In 1997,
the Illinois General Assembly passed legislation that allowed the crediting of income at fair value, as opposed
to book value, to the Benefit Trust Reserve.
1. Benefit Trust
Balances at June 30 $37,465,181,383 $31,318,081,070
This reserve serves as a clearing account for TRS income and expenses. The reserve is credited with contributions
from the State of Illinois that are not specifically allocated to the Minimum Retirement Annuity Reserve, member
and employer contributions, income from TRS invested assets, and contributions from annuitants who qualify for
automatic annual increases in annuity.
The reserve accumulates, with 6 percent interest, the contributions by members prior to retirement. Contributions
have been 7.5 percent of salary since July 1, 1998. Contributions are fully refundable upon withdrawal from
TRS, excluding interest credited thereon. The interest accrued is refundable only in the event of death. Interest
is credited as of the date of retirement or death of those retiring or dying during the year and as of the end
of the fiscal year for all other members. Interest is computed annually based upon the individual member’s bal-ance
in the reserve at the beginning of the fiscal year.
This reserve is charged for transfers to the Minimum Retirement Annuity Reserve and all
• refunds to withdrawing members,
• retirement annuity payments (except as provided by the Minimum Retirement Annuity Reserve),
• benefits that are paid to disabled members,
• death benefits paid, and
• refunds to annuitants for survivor benefit contributions.
The expected benefit payments do not equal the present value of the reserve. The additional amount needed
(the unfunded actuarial accrued liability) as calculated by the actuary was $43,529,992,000 in 2011 and
$39,854,106,000 in 2010.
2. Minimum Retirement Annuity
Balances at June 30 $6,085,811 $5,703,144
The minimum annuity is set by law at $25 per month for each year of creditable service to a maximum of $750
per month after 30 or more years of creditable service. To qualify, annuitants are required to make a one-time
contribution that is credited to the reserve. Interest at 6 percent is credited to the reserve annually based upon
the average reserve balance. For FY11 and FY10, the necessary amount to pay benefits was received from
general obligation bonds issued by the state. All benefits paid under this program are charged to the reserve.
This reserve is fully funded.
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