CGFA staff has reviewed the State-funded retirement systems’ FY 2018 actuarial reports, which were issued prior to November 1st, pursuant to P.A. 97-0694, the State Actuary Law. Under the State Actuary Law, the systems must annually submit a proposed certification for the following fiscal year prior to November 1st of the current calendar year. The State Actuary then must issue a preliminary report concerning the systems’ proposed certification by January 1st. The State Actuary’s report must identify any recommended changes in actuarial assumptions based upon the review of the retirement systems’ actuarial assumptions.
Using the actuarial (smoothed) value of assets, the total unfunded liabilities of the State systems totaled $133.7 billion on June 30, 2018, led by the Teachers’ Retirement System (TRS), whose unfunded liabilities amounted to $75.3 billion. As the largest of the State systems, TRS accounts for approximately 56.3% of the total assets and liabilities of the five State systems combined. The State Employees’ Retirement System (SERS) had unfunded liabilities of $30.4 billion, approximately 22.8% of the total unfunded liabilities of the five systems, followed by the State Universities Retirement System (SURS) with unfunded liabilities of $25.9 billion, which represents 19.4% of the total unfunded liabilities. Table 1, on the following page, provides a summary of the financial condition of each of the five State retirement systems, showing their respective liabilities and assets as well as their accumulated unfunded liabilities and funded ratios.