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SURS Certifies Final FY 2021 State Contribution, Sets Annual Effective Rate of Interest

December 18, 2019 - 07:49
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Champaign, IL - The State Universities Retirement System (SURS) Board of Trustees on Dec. 6 certified the System’s final state contribution for fiscal year 2021 at $1,995,767,000.

Each year, an independent actuary retained by SURS evaluates the System and determines the required state contribution under the formula outlined in Illinois law (40 ILCS 5/15-155). The formula requires the state to make an annual contribution to SURS that will allow it to reach a funded status of 90% by the end of fiscal year 2045. Several actuarial assumptions impact the state contribution including the investment return, mortality rates and salary growth.

The board is required to certify the final state contribution by January 15 for the upcoming fiscal year. SURS fiscal year is July 1 through June 30.

The board also voted to keep the System’s effective rate of interest at 6.5% for fiscal year 2021. The SURS effective rate of interest is used for the calculation of service credit purchases, refunds of survivor and excess contributions, Traditional and Portable defined benefit plan refunds, and lump-sum Portable plan retirements. The rate was last changed from 7% to 6.5% for fiscal year 2018.

Other board matters:

  • Callan, SURS Non-Discretionary Real Assets consultant, presented the calendar year 2020 strategic plan. The plan calls for expected capital deployment of $475 million across core and non-core real assets during the coming year. The current and target allocations for real assets are 6.7% and 10%, respectively. More information can be found on SURS website at https://surs.org/rfp/121219/real-assets-investment-searches.
  • TorreyCove Capital Partners, SURS Discretionary Private Equity Advisor, presented the calendar year 2020 strategic plan. The plan calls for expected capital deployment of $415 million into the private equity asset class during the coming year. As of June 30, 2019, the $1.4 billion private equity portfolio represented 7.1% of plan assets compared to the target allocation of 11%.

SURS Certifies Final FY 2021 State Contribution, Sets Annual Effective Rate of Interest