Illinois Teachers' Retirement System's assets fell by $5.3 billion, or 9.3%, to $48.9 billion in the quarter ended March 31.
During a board meeting conducted remotely Friday, Rebecca A. Gratsinger, the Springfield-based pension fund's senior consultant and CEO of RVK, said preliminary performance of the defined benefit plan's liquid market assets was -9.5% in the quarter ended March 31.
Ms. Gratsinger added that the total return of the pension fund might decrease further to -12% when returns of illiquid strategies are factored in. There is a quarter lag in performance reporting by TRS' private equity, real estate and other illiquid asset managers.
While Ms. Gratsinger acknowledged that "the patterns of a market recovery are impossible to predict," she said RVK's liquidity analysis showed that if the market drawdown continues for a year, TRS likely can continue to make benefit payments and maintain its target asset allocation.
But if there's a multiyear downturn and the state of Illinois doesn't provide the full amount of funding to the retirement system, "that's where we will run into problems with liquidity," she said, noting that TRS' funded status could dip below 30% if the market doesn't recover in 2021.
TRS' funded status was 40.5% as of June 30, confirmed David Urbanek, the pension fund's spokesman, in an email. "So far, this quarter has seen a positive return and the state has made every one of its payments (in full)." Mr. Urbanek added.
