updated with correction
Illinois State Universities Retirement System, Champaign, requested $1.402 billion in contributions from the state for the fiscal year ending June 30, 2013, according to a statement from the $12.5 billion system.
The request is up 43% from the contributions for the current fiscal year, which ends June 30, 2012.
The system sent its annual funding request to Gov. Pat Quinn, which is required by Nov. 15. For the current fiscal year, the system requested $980.5 million, which the Illinois General Assembly contributed in full, said Daniel L. Allen, chief investment officer, in a phone interview.
Generally, the state Legislature takes up the matter of pension funding in its spring session.
The system reduced its assumed rate of return to 7.75% from 8.5%, effective June 30, 2010, a move that “only partially impacts the reason for the increase,” Mr. Allen said in the interview.
The primary drivers of the increase are changes in other actuarial assumptions SURS recently approved, according to the statement: a decrease of price inflation to 2.75% from 3.75%; decrease of assumed payroll growth and wage inflation to 3.75% from 5%; increased career life of participants; and longer life expectancies.
In addition to the state contribution, participants contributed $260.2 million in the last fiscal year.
The system expects to pay some $1.7 billion in benefits in the next fiscal year, up from about $1.6 billion in the current fiscal year. It would sell investments to meet any shortfall in combined state and employee contributions to pay benefits in the next fiscal years, Mr. Allen said in the interview.
The system's funding ratio fell to an estimated 39.4% on Sept. 30, down from 45.3% three months earlier, because of recent market performance, the statement said.