SPRINGFIELD, IL – Governor JB Pritzker’s plan to appropriate more money than the minimum requirement to Illinois’ public pensions in fiscal year 2023 was praised Thursday by TRS leaders as a commitment to improve the retirement security of the state’s teachers.
“Governor Pritzker’s proposal to allocate $10 billion to public pensions in the coming year’s state budget reaffirms his strong partnership with generations of Illinois teachers,” said TRS Board President Matthew Hunt. “Since taking office, Gov. Pritzker has proven to be very supportive of our 432,000 members and their futures.”
In his FY 2023 state budget proposal, Gov. Pritzker said he wants to add $500 million to the minimum annual contribution required by law to TRS and the other pension systems. In FY 2023, the state’s minimum statutory payment is $9.6 billion, with $5.9 billion dedicated to TRS. With the additional funds, the state’s total contribution to the pension systems will be $10.1 billion. It’s expected the payment to TRS will total $6.16 billion.
Governor Pritzker said the added $500 million will reduce the future long-term liability of the state’s pension systems by an estimated $1.4 billion. The total long-term liability of all of the state’s five pension systems currently stands at $236.5 billion. The TRS unfunded liability is $80 billion.
“With the recent funding commitment from the State, combined with strong investment returns, the funded status of TRS improved to 42.5 percent from 40.5 percent. That’s great news for our members,” said R. Stanley Rupnik, TRS executive director and chief investment officer. “Still, TRS faces deep financial challenges. Our unfunded liability is $79.9 billion, one of the highest in the nation for a system of our size. But we are now seeing slow but steady improvement.”
Fiscal year 2023 is the first time since 1994 that the state’s annual pension contribution will exceed the statutory minimum.
The Board also reviewed the following investment actions:
- Within the System’s $10.6 billion Private Equity Portfolio:
- The commitment of $125 million to A&M Capital Partners, of Greenwich, Connecticut. A&M currently manages $75 million in TRS assets.
- The commitment of up to $27.5 million to Apollo Global Management, of New York, New York. Apollo currently manages $843 million in TRS assets.
- The commitment of $35 million to Thomas H. Lee Partners, of Chelmsford, Massachusetts. This is a new investment relationship for TRS.
- The commitment of $150 million to TSG Consumer Partners, of Larkspur, California. TSG currently manages $100 million in TRS assets.
- The commitment of $75 million to two funds managed by Greenspring Associates of Owings Mills, Maryland: $25 million to Greenspring IL Master II and $50 million to Greenspring IL Special II. Greenspring currently manages $1.1 billion in TRS assets.
- Within the System’s $23.6 billion Public Equity Portfolio:
- The commitment of $400 million to RhumbLine Advisors, of Boston, Massachusetts. RhumbLine currently manages $10.2 billion in TRS assets.
- The termination of a Domestic Large Capitalization Growth Strategy of T. Rowe Price, of Baltimore, Maryland. T. Rowe Price had administered approximately $787 million in TRS assets.
- Within the System’s $10.7 billion Real Assets Portfolio:
- The commitment of up to $150 million to the Rockpoint Group, of Boston, Massachusetts. Rockpoint currently administers approximately $150.6 million in TRS assets.
- The commitment of up to €100 million to the Tristan Capital Partners, of London, The United Kingdom. Tristan currently administers approximately €50.5 million in TRS assets.
- Within the $15.8 billion Global Income Portfolio:
- The commitment of $300 million to Garcia Hamilton & Associates, of Houston, Texas. Garcia Hamilton currently administers $302.3 million in TRS assets.
- The commitment of $100 million to Locust Point Capital, of Red Bank, New Jersey. Locust Point currently administers $15.9 million in TRS assets.
- The commitment of $50 million to Sixth Street Advisors, of San Francisco, California. This is a renewed investment relationship for TRS.
- The termination of Franklin Advisors, of San Mateo, California. Franklin had administered approximately $680 million in TRS assets.
- Within the $5.2 billion Diversifying Strategies Portfolio:
- The commitment of $200 million to Bridgewater Associates, of Westport, Connecticut. Bridgewater currently administers $101.4 million in TRS assets.
- The commitment of $15 million to Magneter Financial, of Evanston, Illinois. Magneter currently administers $158.4 million in TRS assets.
- The full redemption of $105.5 million from Aspect Capital, of London, The United Kingdom.
About Teachers’ Retirement System
The Teachers’ Retirement System of the State of Illinois is the 42nd largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 434,000 members and had assets of $66 billion as of December 31, 2021.
