Public Accountability Report

The Teachers’ Retirement System of the State of Illinois (TRS) is a public employee retirement system (PERS) that administers a cost-sharing, multiple-employer defined benefit pension plan. That pension plan is a fiduciary component unit of TRS. Membership is mandatory for all full-time, part-time, and substitute public school personnel employed outside of Chicago in positions requiring licensure by the Illinois State Board of Education. Persons employed at certain state agencies and certain non-government entities also are members. Established by the State of Illinois on July 1, 1939, TRS is governed by the Illinois Pension Code (40 ILCS 5/16). TRS is a component unit of the State of Illinois and is included in the state’s financial statements as a pension trust fund. The mission of TRS is to deliver expert pension service to Illinois public educators as they earn their promised retirement security.      

TRS also administers a deferred compensation plan. Pursuant to Section 16-204 of the Illinois Pension Code, the Board of Trustees of TRS established the TRS Supplemental Savings Plan (SSP). The SSP is an eligible deferred compensation plan (DCP) under Section 457(b) of the Internal Revenue Code. Membership is voluntary for eligible TRS members first employed in a TRS-covered position prior to January 1, 2023. Eligible members first employed on or after January 1, 2023 are automatically enrolled unless they opt out of the program. TRS uses a third-party administrator and acts as a pass-through entity for contributions received, thus assets are not controlled by TRS. The assets of the SSP are maintained under a trust for the exclusive benefit of participants and beneficiaries. Participating members, not TRS, direct the third-party administrator regarding use, exchange, or employment of assets within their own accounts. The SSP is reported in a custodial fund as a fiduciary activity because it is not a component unit of TRS.

TRS is governed by a 15-member Board of Trustees. Trustees include the state superintendent of education, seven trustees appointed by the governor, five trustees elected by contributing TRS members, and two trustees elected by TRS annuitants. The president of the Board of Trustees, by law, is appointed by the governor from among the sitting trustees. The Board of Trustees elects its vice president from among its members. The Board of Trustees appoints an executive director who also serves as the secretary of the Board of Trustees. The executive director is responsible for daily operations at TRS.

The three sources of funding for TRS benefits and operations are member contributions, investment income, and employer contributions through state appropriations and payments from employers. The annual budget for TRS administrative expenses is prepared by staff in conjunction with a review of the long-range strategic plan. The annual budget is approved by the TRS Board of Trustees.

TRS is required by law to publish an Annual Comprehensive Financial Report with information about the System’s financial condition, investment methods, performance, and actuarial conclusions that determine financial needs as well as statistical information about members, school districts, revenues, and benefits. TRS staff issues the report within six months of the close of each fiscal year. It contains financial statements presented in conformity with generally accepted accounting principles (GAAP) applied within guidelines established by the Governmental Accounting Standards Board (GASB).