Champaign, IL - The State Universities Retirement System (SURS) Board of Trustees on Thursday certified the System’s preliminary state contribution for fiscal year 2021 at $1,996,686,000, an increase of $141,994,000 from FY 2020. The state’s contribution to the College Insurance Program (CIP) was also certified at $4,622,773 for fiscal year 2021.
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 preliminary contribution must be reviewed by the state actuary. The board must certify the final state contribution for fiscal year 2021 by January 15, 2020.
The employer normal cost for fiscal year 2021 was set at 12.70%.
Also, on Thursday, the board approved hiring Credit Suisse as a systematic trend-following manager, subject to successful contract negotiations. An initial allocation of 1.75% of the total fund assets will be split among four systematic trend-following firms: Aspect Capital – 27%, Campbell & Company – 27%, LongTail Alpha – 19% (all of which were hired in September 2019) and Credit Suisse – 27%.
In other business, the board:
- Approved ARP Investments, Lombard Odier and PIMCO as alternative risk premia managers with each firm to receive an allocation of approximately 0.5% of total fund assets, subject to successful contract negotiations.
- Approved real asset commitments of $100 million to Proglogis Targeted U.S. Logistics Fund and $50 million to Cabot Industrial Value Fund VI, subject to successful contract negotiations. These are new relationships for SURS.
- Approved changes to the defined benefit plan Investment Policy (to be posted on www.surs.org) allowing SURS staff to restructure the inflation sensitive portfolio in order to implement new goals for the class.