Public Accountability Report

The State Universities Retirement System (SURS) is the administrator of a cost-sharing, multiple-employer defined benefit (DB) plan and two multiple-employer defined contribution (DC) plans. SURS was established on July 12, 1941 to provide retirement annuities and other benefits for employees of the state universities, certain affiliated organizations, and certain other state educational and scientific agencies and for survivors, dependents, and other beneficiaries of such employees. SURS is governed by Chapter 40, Act 5, Article 15 of the Illinois Compiled Statutes. These statutes assign the authority to establish and amend the benefit provisions of the plans to the state legislature. Operation of SURS and the direction of its policies are the responsibility of the SURS Board of Trustees. The Board of Trustees consists of six elected and five appointed board members. There are no statutory provisions for the termination of SURS, and the Illinois Constitution provides that the pension obligation of the state shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. Public Act 96-0889 introduced new benefit terms for members who begin participation on or after January 1, 2011. The original benefit terms are referred to as Tier I, and the new benefit terms are referred to as Tier II.

From its inception until 1998, SURS administered a DB plan with one benefit package. Legislation effective January 1, 1998 required SURS to introduce a portable benefit package to the existing (traditional) DB plan. That legislation also required SURS to offer a DC plan. That DC plan was known as the Self-Managed Plan from its inception until September 1, 2020, when the plan was renamed the Retirement Savings Plan (RSP) at the conclusion of an extensive plan redesign. Members have six months after their date of hire to make an irrevocable election to participate in either of the DB plan’s benefit packages (traditional or portable) or in the RSP. More recent legislation effective August 10, 2018 required SURS to introduce a supplemental DC plan in which existing SURS members could optionally participate. This supplemental DC plan is called the Deferred Compensation Plan (DCP) and began accepting contributions on March 1, 2021. 

The mission of SURS is to secure and deliver the retirement benefits promised to our members. The funds needed to finance the benefits provided by SURS are accumulated through the collection of member contributions, employer contributions, state contributions, and investment income. In accordance with Chapter 40, Act 5, Article 15 of the Illinois Compiled Statutes, members in the traditional or portable benefit package contribute 8% of their gross earnings; 6.5% of which are designated for retirement annuities, 0.5% for postretirement increases, and 1% for survivor benefits (traditional) or increased portability (portable). Members in the RSP contribute 8% of gross earnings. The State of Illinois is a non-employer contributing entity and provides funding from two sources: the General Revenue Fund and the State Pensions Fund. The state’s Statutory Funding Plan requires it to contribute annually an amount equal to a constant percentage of pensionable (capped) payroll necessary to allow SURS to achieve a 90% funded ratio by fiscal year 2045.

In response to governmental accounting standards effective for fiscal year 2021, SURS made changes to which activities are specifically included in its annual report financial statements. These changes affected the way SURS presents its financial information in this report in the following ways:

1. SURS no longer includes activities that are not in its direct control. For example, SURS employs a third-party administrator (TPA) for the administration of the RSP and DCP. Balances held by the TPA and transactions between the TPA and SURS members are no longer included in this report. Transactions between SURS and the TPA are included.

2. SURS previously maintained a separate reporting program for each of its plans. As a result of item #1 above, SURS has consolidated its activities into one reporting program on this report. Additional information about the nature of SURS fiduciary activities can be found in the Financial Section of its Annual Comprehensive Financial Report.