Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698058736972.pdf (Liberia)
| | 1 To provide, protect, and enhance the present and future economic well being of members, pensioners and beneﬁciaries through eﬃcient and eﬀective management of beneﬁt programs, investment practices and customer service, and to commit to earning and keeping the respect and trust of the participants through quality service and by protecting retirement beneﬁts, in compliance with applicable laws and standards.
PUBLIC SCHOOL TEACHERS’ PENSION AND RETIREMENT FUND OF CHICAGO Report prepared by the staff of the Public School Teachers’ Pension and Retirement Fund of Chicago MISSION STATEMENTEstablished by the Illinois state legislature in 1895 as The Public School Teachers’ Pension and Retirement Fund of Chicago, CTPF is the administrator of a deﬁned beneﬁt public employee retirement system providing retirement, survivor, and disability beneﬁts for certain certiﬁed teachers and employees of the Chicago Public Schools.Trust.
Integrity.

Stability.
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 CHICAGO, ILLINOIS PUBLIC SCHOOL TEACHERS’ PENSION AND RETIREMENT FUND OF CHICAGO Report prepared by the staff of the Public School Teachers’ Pension and Retirement Fund of Chicago Board of Trustees Certificate of Achievement for Excellence in Financial Reporting Consultants TABLE OF CONTENTS INTRODUCTORY (UNAUDITED) 4 5 6 7 Organizational Chart 8 Letter of Transmittal FINANCIAL 17 19 Independent Auditor’s Report Management’s Discussion and Analysis (Unaudited) BASIC FINANCIAL STATEMENTS 28 Statement of Fiduciary Net Position 29 Statement of Changes in Fiduciary Net Position 30 Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 55 Schedule 1: Schedule of Changes in Employer’s Net Pension Liability – Pension Plan 56 Schedule 2: Schedule of the Employer’s Net Pension Liability – Pension Plan 56 Schedule 3: Schedule of the Employer’s Contribution – Pension Plan 57 Schedule 4: Schedule of Employer’s Contractually Required Contribution 57 Schedule 5: Schedule of Money-Weighted Rate of Return – Pension Plan NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 58 Actuarial Methods and Assumptions – Pension Plan 59 Changes in Assumptions Investment Consultant Report Investment Managers OTHER SUPPLEMENTARY INFORMATION (UNAUDITED) 60 Schedule 6: Administrative and Miscellaneous Expenses 60 Schedule 7: Schedule of Manager Fees 61 Schedule 8: Schedule of Consultant Payments INVESTMENTS (UNAUDITED) 63 Master Custodian Reports 64 66 67 Total Annual Fund Rate of Return 68 Schedule of Investment Results 69 Investment Portfolio Summary 70 Asset Allocation Summary 71 Historical Asset Allocation 72 Domestic Equity Summary 73 74 75 Fixed Income Summary 76 Public REITs Summary 77 Private Equity Summary 78 Infrastructure Summary 79 Real Estate Summary 80 Manager Analysis 81 Broker Commission Reports 85 Cash Receipts and Disbursements 86 Investment Authority ACTUARIAL (UNAUDITED) 89 Actuarial Certification Pension Fund
 International Equity Summary International Equity Holdings 2 3 91 SECTION A: EXECUTIVE SUMMARY 92 SECTION B: SUMMARY OF THE ACTUARIAL VALUATION 105 SECTION C: ACTUARIAL DETERMINATIONS 105 Table 1: Results of Actuarial Valuation 107 Table 2: Components of Actuarial Accrued Liability and Normal Cost by Tier 16 108 Table 3: Analysis of Change in Unfunded Actuarial Accrued Liability 109 Table 4: Analysis of Financial (Gains) and Losses in Unfunded Actuarial Accrued Liability 110 Table 5: Historical Financial (Gains) and Losses in Unfunded Actuarial Accrued Liability 111 SECTION D: ACTUARIAL PROJECTIONS 111 Table 6: Baseline Projections - Employer Contributions Determined under Public Act 90-0655, Public Act 91-0357, Public Act 96-0889 and Public Act 100-0465 112 Table 7: Solvency Test 113 SECTION E: FUND ASSETS 113 Table 8: Development of the Actuarial Value of Assets 114 Table 9: Historical Investment Returns 115 SECTION F: PARTICIPANT DATA 115 Table 10: Summary of Fund Membership 116 Table 11: Schedule of Active Member Data 116 Table 12: Member Population and Ratio of Non-Actives to Actives 117 Table 13: Total Lives and Annual Salaries of Active Members Classified by Age and Years of Service 118 Table 14: Reconciliation of Member Data 118 Table 15: History of Retirees and Beneficiaries Added to Rolls 119 Table 16: Annuitants Classified by Benefit type and Amount 120 Table 17: Initial Year Retirement Analysis 121 SECTION G: ACTUARIAL METHODS AND ASSUMPTIONS 128 Projection Methodology and Appropriation Requirements Under P.A.
90-0655, P.A.

91-0357, P.A.

96-0889, and P.A.
100-0465 62 130 SECTION H: SUMMARY OF PLAN PROVISIONS 134 SECTION I: ADDITIONAL PROJECTION DETAILS 134 Table 18: Actuarial Accrued Liability 134 Table 19: Present Value of Future Benefits 135 Table 20: Benefit Payments Including Administrative Expenses and Health Insurance Subsidy 135 Table 21: Active Population, Covered Payroll, Employee Contributions and Normal Costs STATISTICAL (UNAUDITED) 137 Statement of Changes in Fiduciary Net Position, Pension Fund 139 Statement of Changes in Fiduciary Net Position, 136 Health Insurance Fund 141 Distribution of Current Annuitants by Benefit Type 142 Distribution of Pensioners with Health Insurance Reimbursements by Size of Annuity 143 Schedule of Average Benefit Payments 144 Participating Members: Number of Active Members 88 INTRODUCTION This section provides information regarding the Chicago Teachers’ Pension Fund Board of Trustees and its consultants, an organizational chart, a Certificate of Achievement, a Letter of Transmittal, and additional administrative information.
3 BOARD OF TRUSTEES AS OF JUNE 30, 2019 Jeffery Blackwell Mary Sharon Reilly Gregory Redfeairn Jacquelyn Price Ward James Cavallero Gervaise Clay Tina Padilla Robert F. “Bob” Bures Maria J. Rodriguez Jerry Travlos OFFICERS Jeffery Blackwell, President Mary Sharon Reilly, Vice President Gregory Redfeairn, Financial Secretary Jacquelyn Price Ward, Recording Secretary MEMBERS REPRESENTING THE CONTRIBUTORS Jeffery Blackwell James Cavallero Gervaise Clay Tina Padilla Gregory Redfeairn Jacquelyn Price Ward REPRESENTING THE ANNUITANTS Robert F. “Bob” Bures* Mary Sharon Reilly Maria J. Rodriguez REPRESENTING THE ADMINISTRATORS/ PRINCIPALS Jerry Travlos REPRESENTING THE BOARD OF EDUCATION ^ EXECUTIVE DIRECTOR Charles A. Burbridge 4 | Introduction | * In Memoriam.
Robert F. “Bob” Bures passed away on October 21, 2019.

^ At June 30, 2019, the two representatives of the Board of Education had resigned.

Their replacements were sworn in the following July.
| Introduction | 5 CONSULTANTS AS OF JUNE 30, 2019 LEGAL COUNSEL AUDITOR Foster Pepper, PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 Plante Moran, PLLC 27400 Northwestern Highway Southfield, Michigan 48034 CONSULTING ACTUARY Gabriel, Roeder, Smith & Company Holdings, Inc. 120 North LaSalle Street, Suite 1350 Chicago, Illinois 60602 INFORMATION TECHNOLOGY CONSULTANT Bradley Consulting Group, Inc. P.O.
Box 637 Lockport, Illinois 60441 Jacobs, Burns, Orlove and Hernandez 150 North Michigan, Suite 1000 Chicago, Illinois 60601 Ice Miller, LLP One American Square, Suite 2900 Indianapolis, IN 46282 INVESTMENT CONSULTANTS Callan Associates, Inc. 120 North LaSalle Street, Suite 2400 Chicago, Illinois 60602 HEALTH INSURANCE CONSULTANTS The Segal Company 101 North Wacker Drive, Suite 500 Chicago, Illinois 60606 BANK CUSTODIANS Bank of New York Mellon 500 Grant Street Pittsburgh, Pennsylvania 15258 6 | Introduction | ORGANIZATIONAL CHART AS OF JUNE 30, 2019* Adriane D. McCoy Internal Audit Director Charles A. Burbridge Executive Director Mary Cavallaro Deputy Executive Director Gail Davis Director of Administrative Services Rosemary Ihejirika Chief Benefits Officer Angela Miller-May Chief Investment Officer Daniel Hurtado Chief Legal Officer Tracey L. Schroeder Director of Communications Kimberly Shamley Director of Human Resources Vandana Vohra Chief Technology Officer Alise White Chief Financial Officer * A list of investment professionals who provide services to the Fund can be found on page 66.
| Introduction | 7 BOARD OF TRUSTEES LETTER OF TRANSMITTAL March 31, 2020 The Board of Trustees and Fund Members Public School Teachers’ Pension and Retirement Fund of Chicago 425 S. Financial Place | Suite 1400 Chicago, Illinois 60605 Dear Board of Trustees, Contributors, Pensioners, and Members of the Public: We are pleased to present 124th Comprehensive Annual Financial Report (CAFR) of the Public School Teachers’ Pension and Retirement Fund of Chicago (CTPF or Fund) that covers the fiscal year ended June 30, 2019.
The Fund is a public employee retirement system established by the State of Illinois to provide annuity, disability, survivor, death, and health benefits for certain certified teachers and other employees of the Chicago Public Schools and approved City of Chicago charter schools.

It is administered in accordance with Chapter 40, Act 5, Articles 1, 17, and 20 of the Illinois Compiled Statutes.

Illinois statutes provide for a Board of Trustees to be responsible for the administration of the Fund.
An important aspect of the administration is the presentation of a detailed annual report of system finances and operations.

This publication is intended for all parties-of-interest as well as for the public-at-large.

The financial statements and their content are the responsibility of the Fund’s management.

This report provides a review of the financial, investment, actuarial, and operational conditions of the Fund.
It contains financial statements with comparative data, which were subject to an independent audit conducted by Illinois licensed certified public accountants, an actuarial valuation prepared by the Fund’s consulting actuary, a description of benefits as specified in Illinois law, and other relevant information.
OVERVIEW The Fund’s membership increased to 67,538 total members including 29,295 active members, 28,317 beneficiaries, and 9,926 vested terminated members as of June 30, 2019, reflecting a 0.9% increase over the prior year’s total membership of 66,905.

The 124th year of continuous operations ended with the Fund’s operational condition substantially unchanged from the previous fiscal year.
The June 30, 2019, value of net assets held in trust for pension and health benefits amounted to $11.0 billion, a (0.6)% decrease from the $11.1 billion of the previous year.
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org 8 | Introduction | FISCAL YEAR 2019 HIGHLIGHTS AND ACCOMPLISHMENTS ACCOUNTING AND INTERNAL CONTROLS This report was prepared to conform to the principles of governmental accounting and reporting as pronounced by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants.
Plante Moran, PLLC, conducted the fiscal year 2019 audit and Gabriel, Roeder, Smith & Company Holdings, Inc., produced the fiscal year 2019 actuarial valuation.

The accrual basis of accounting is used to record the assets, liabilities, revenues, and expenses of the Fund.

Revenues are recognized in the accounting period in which they are earned, without regard to the date of collection, and expenses are recorded when the corresponding liabilities are incurred, regardless of when payment is made.
The specific accounting treatment of transactions is described in the Summary of Accounting Policies in the Notes to the Financial Statements.

The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the Public School Teachers’ Pension and Retirement Fund of Chicago for its CAFR for the period ended June 30, 2018.

This was the 28th year that the Fund received this prestigious award.
The award recognizes CTPF’s readable and efficiently organized CAFR, which satisfies generally accepted accounting principles and applicable legal requirements.

Throughout the year, the Finance Department worked to update systems and processes and to streamline and improve expense reporting and budgeting.

Finance partnered with the Benefits department staff to define requirements for enhancements to the Employer Reporting System, designed to improve the contribution and late-fee billing process.
The department also issued a request for proposal for banking services and evaluated responses to ensure services and fees align with the Fund’s goals and initiatives.

INVESTMENT AUTHORITY AND PERFORMANCE The CTPF Board of Trustees (Board) set the Fund’s investment policy, operating under the prudent person rule and with investment authority granted by the Illinois Compiled Statutes, Chapter 40, Act 5, Articles 1 and 17.
Trustees seek guidance from CTPF staff and investment consultants who help select investment management firms and monitor and continuously evaluate performance.

The Board approves an asset allocation program designed to obtain the highest expected return on investments with an acceptable level of risk.
The Board’s current policy targets are: • Global equity at 66.0% (comprised of domestic equity at 30.5%, • international equity at 30.5%, and private equity at 5.0%), Fixed income at 23.0%, and • Real assets at 11.0% (comprised of private real estate at 9.0% and infrastructure at 2.0%).
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org | Introduction | 9 As of June 30, 2019, investments at fair value plus cash totaled $10.8 billion, reflecting a (0.1)% decrease from the $10.9 billion value of June 30, 2018.
The Fund’s rate of return for the year ended June 30, 2019, was 5.51% as performance of the portfolio was reflective of the equity market’s low growth and increased volatility as well as the fourth quarter 2018 market correction.

CTPF maintained a diversified portfolio consisting of equities (domestic and international), fixed income, real assets, and alternative investments.

The Fund continued to maximize investment performance while maintaining acceptable levels of risk.
CTPF is a long-term investor and performance over time offers a broader picture of overall performance.

The Fund returned 10.02% over the past 10 years, and 8.37% for the 25-year period ending June 30, 2019.

During the year ended June 30, 2019, the Board and staff performed due diligence over its investment managers in order to monitor performance and compliance in all asset classes.
During the fiscal year the Fund: • • • • • Initiated investments with four non-core real estate managers: one African-American-owned firm, two Latino-owned firms, and one majority-owned firm.

Initiated investments with four private equity managers: two woman- owned firms and two African-American owned firms.

Initiated investments with two infrastructure managers: one existing majority-owned firm and one new majority-owned firm.

Initiated investments with one majority-owned fixed income core passive firm.
Initiated investments with one majority-owned fixed income core active firm.

CTPF continues to be committed to diversity in all aspects of investing.

As of June 30, 2019, approximately 44.4% ($4.8 billion) of the Fund’s investment portfolio was managed by qualified minority, women, and disabled-person owned investment managers.

Additionally, the Fund directed approximately $1.10 million in commissions to qualified minority, women, and disabled-person owned brokers/dealers in calendar year 2018.
CTPF also has a strong commitment to the economy of the State of Illinois.

As of June 30, 2019, CTPF employed 18 Illinois-based investment managers who managed assets with a market value of $3.3 billion.

These assets represented 31.5% of CTPF’s investment portfolio.

Overall, investment returns continue to outperform benchmarks similar to the previous fiscal year.
The investment rate of return for fiscal year 2019 was 5.51% (vs. benchmark of 6.37%) following fiscal year 2018’s return of 8.96% and fiscal year 2017’s return of 13.59%.

Five and ten-year annualized returns were 6.33% (vs. benchmark of 6.08%) and 10.02% (vs. benchmark of 9.53%), respectively.

Domestic, international, and private equity as well as real estate and infrastructure generated positive returns.

Fixed Income posted negative returns but still outperformed the fixed income benchmark.
The Fund’s portfolio of domestic equity reported a 7.62% return, international equity reported a 0.72% return, fixed income reported a 8.37% return, private equity reported a 11.73% return, real estate reported a 6.33% return, and infrastructure reported a 10.16% return.
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org 10 | Introduction | BENEFITS DEPARTMENT The Benefits Department is responsible for the day-to-day operations of all benefits administration to ensure member satisfaction, compliance with statutory law, and the financial accuracy of payroll records and benefit payments.
Key areas of responsibility include member services, member records, pensions and refunds, health insurance, compliance, employer audits, process improvement and analysis.

The department continues to focus on strengthening operations, improving internal controls, and enhancing customer service for members.

Highlights from 2019 include: • Launch of dedicated employer audit team for continuous full payroll audit of all Employer data.
The audits are structured to collaborate with Employers to identify and mitigate contribution and participant reporting deficiencies.

• Continued enhancement of functionality of our web-based Employer Reporting System that improves data transparency, offers workflow efficiencies to both employers and administrative staff, and supports improved accountability to avoid and reduce the number of incoming data discrepancies.
• Continuation of work on a data quality initiative which continues to identify and remediate existing account data discrepancies.

Completion of the initiative will decrease benefit processing turnaround times as well as support enhanced member self-service capabilities.

• Improvements to the death-matching process to mitigate the overpayment of pension benefits after the death of a member.
ADMINISTRATIVE SERVICES DEPARTMENT The Administrative Services Team supports the work of the Board of Trustees and CTPF Leadership to ensure they are efficiently able to carry out the Fund’s mission.

The Team managed the agendas and prepared for the 12 regular meetings of the Board of Trustees, and facilitated more than 50 individual committee meetings providing minutes and support for committee members and their staff liaisons.
During fiscal year 2019, Administrative staff worked with the Fund’s real estate consultant, CBRE, other vendors, building management, and Fund staff to manage the Fund’s relocation to 425 S. Financial Place in November 2019.

The enterprise-wide project started with the signing of a lease in February 2019, and involved a full-scale build out of the 14th floor and a portion of the 15th floor at the new location.
Starting with the 2019 election, Administrative Services staff took responsibility for the Trustee Election process which is now a year-round project involving all aspects of the organization.

COMMUNICATIONS DEPARTMENT The communications team is responsible for increasing efficiency, bridging departments, and engaging members.

The team manages a comprehensive, cross- platform communications plan with relevant resources for members, employees, legislators, and the public.
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org | Introduction | 11 Day-to-day the team collaborates with all departments to produce internal and public-facing communications with four major areas of responsibility: digital publications, media/community relations, social media engagement, and website management.

The team also produces informational materials for employees.
The Director of Communications served as the Election Coordinator for the three Trustee Elections in 2018.

Major annual projects completed in 2019 included CTPF’s Health Insurance Handbook and Open Enrollment materials, all Trustee Election communications, the Comprehensive Annual Financial Report, Popular Annual Financial Report, Economic Impact Statement and individual information sheets, Pension News, and Retirement Seminar materials.
At the beginning of the 2019 fiscal year, the department coordinated the enterprise-wide launch of a new website at www.ctpf.org ahead of schedule and on budget.

Communications manages the daily operations of the website, and the site supported more than 84,000 new users in its first year.

The department manages the distribution of electronic content including E-News 12 times each year and timely E-lerts.
CTPF offers a robust social media presence on Facebook, LinkedIn, and Twitter, posting regularly and providing an opportunity to engage thousands of members.

All platforms saw total followers increase by 13.6% for the fiscal year.

While Facebook remains the strongest social media platform for CTPF in terms of engagement, CTPF did see a 35.7% increase in Twitter followers, and a 25.4% increase in LinkedIn followers.
HUMAN RESOURCES DEPARTMENT The Human Resources Department serves as a resource to all staff.

The Department brings new hires on board, provides staff with developmental opportunities, maintains a confidential environment, works through conflict resolution, and seeks employee engagement opportunities.
During fiscal year 2019 Human Resources worked to hire for several strategic positions and partnered with an external consulting firm (CBIZ) to conduct a competitive market review of base salary and total cash compensation.

As a result of the study, new salary bands were proposed.

The Board of Trustees approved one- time adjustments to staff who were paid below the minimum of their band to keep them in alignment with the market.
LEGAL DEPARTMENT The Legal Department advises the Board and Fund staff on legal issues impacting the Fund, both on a day-to-day basis and at Board and Committee meetings.

The Legal Department works closely with Board counsel and oversees the work of the Fund’s other outside counsel, including litigation, investment, tax, and securities and class action litigation counsel.
Highlights for fiscal year 2019 include: • Entering into a memorandum of understanding with the Chicago Board of Education regarding the development of agreed upon procedures for the conduct of a payroll audit.

• Negotiating a use and custody agreement with the Board of Education relating to Fund expenditures.
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org 12 | Introduction | • Achieving a favorable settlement in securities fraud litigation.

• Continuing to create and refine processes and procedures for a newly centralized procurement function.

• Preparing and conducting Board of Trustee and staff training in contract administration and procurement policy.

• Finalizing the Fund’s record retention policy.


• Drafting and finalizing a disability policy.

• Overseeing the conduct of administrative hearings relating to return to work matters.

INFORMATION TECHNOLOGY DEPARTMENT The Information Technology (IT) Department is responsible for the architecture, hardware, software, security, and networking of technology for CTPF.

The Department ensures that CTPF staff have full access to a reliable and protected network system.
IT staff is responsible for following industry best practices for software development standards, project management, and infrastructure and security improvements to meet the needs of various CTPF departments.

During fiscal year 2019, IT members served on the CTPF Moving Team and managed the Fund’s technology needs during the preparation for relocation to 425 S. Financial Place in November 2019.
In conjunction with the move, CTPF’s information systems were overhauled by an internal Enterprise Risk Management Team to address risks, provide infrastructure modernization, and audit remediation.

The result of these efforts included increased accuracy, timeliness, security, and sustainability of the system.

Savings were recognized and of note, organizational printers were centralized saving the Fund 47% of printer maintenance cost.
Highlights for fiscal year 2019 include: • Implementing an upgraded cloud-based Disaster Recovery and Backup strategy with a quarterly testing of Disaster Recovery (DR) process, and established a Disaster Recovery (DR) Run Book.

• Upgrading phone and voicemail systems, door security software, database technology, and telephony software solutions.

Also implemented anti-virus/ anti-malware and printer security software.
• Executing an IT Digitization Strategy including Technology Modernization program along with digitizing and loading all member-related microfiche and microfilm images for quick access.

Continued upgrades of significant technology initiatives that enable better member service, including further development of the recently launched Employer Reporting System.
• Completing an enterprise data and system gap-fit analysis and defined current state of Enterprise Pension Administration and all auxiliary applications to help determine the future path for development of new features and improved functionality.

• Partnering across the organization to improve Annual Member Statement availability and established an automated Estimate Request Process.
425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org | Introduction | 13 • Realizing improvements in several areas including Requirement Minimum Distribution processing, automation of health insurance premium coding, completing the daily CPS employment status reporting project, managing stale checks, and tax withholding.

• Acquiring cybersecurity insurance for the Fund.


LEGISLATION IMPACTING CTPF Public Act 100-0902 enacted August 17, 2018, amends the General Provisions Article of the Illinois Pension Code.

In provisions concerning the allocation and delegation of fiduciary duties, provides that each retirement system, pension fund, or investment board shall make its best efforts to ensure that the racial and ethnic makeup of its senior administrative staff represents the racial and ethnic makeup of its membership.
FUNDING GOALS The funding policy of the Fund provides for employer contributions which, when added to contributions received from employee members and earnings on investments, will be sufficient to meet the actuarially determined obligations of the Fund.

On an annual basis, an actuarial valuation is performed in order to determine the amount of required contributions in accordance with the Illinois Compiled Statutes (Public Act 89-15).
The Chicago Board of Education (Employer) is required by law to make contributions to the Fund in order to ensure the actuarial value of assets is 90% of the actuarial value of liabilities by the end of a predetermined funding period.

In years where the funding ratio exceeds 90%, no employer contribution is required.
The Illinois Compiled Statutes (Public Act 90-0582) provide that the Employer and the State of Illinois (State) are required to make additional contributions as a percentage of payroll to offset a portion of the cost of benefit increases enacted under Public Act 90-0582.

Amendments to the Illinois Pension Code during fiscal year 2010 changed the funding requirements for future years.
Illinois Compiled Statutes (Public Act 96-0889) limited the contributions required to be made to the Fund by the Chicago Board of Education to $187 million for fiscal year 2011, $192 million for fiscal year 2012, and $196 million for fiscal year 2013.

Under the amended statute, the Chicago Board of Education was provided a 14-year extension, or until the end of 2059, to make contributions which ensure that the Fund’s projected actuarial value of assets is 90% of the Fund’s projected actuarial liabilities.
Legislation passed in fiscal year 2016 attempted to ease the funding burden on CPS.

Public Act 99-0521, passed and enacted in fiscal year 2017, allowed CPS to levy a property tax dedicated to the Fund at a tax rate of 0.383%.

425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org 14 | Introduction | 14 Public Act 100-0465, enacted in fiscal year 2018, provided additional funding stability.
The legislation raised the property tax levy to 0.567% and required the State of Illinois to pay the normal cost portion of the CPS required contribution, including the $65 million health insurance subsidy, on an ongoing basis.

For fiscal years 2015, 2016, 2017, 2018, and 2019, the required contributions from the Board of Education and the State of Illinois were $709 million, $700 million, $745 million, $784 million, and $809 million, respectively.
For fiscal years 2020 and 2021, the required contributions are $855 million and $886 million.

CONCLUDING COMMENTS Three Board of Trustees elections were held in Fiscal Year 2019.

Pensioners elected Robert F. “Bob” Bures to a one-year term to fill a vacancy through November 2019.

Teachers held two elections.

Gervaise Clay and James Cavallero were elected to three-year terms from November 2018–November 2021.

Jacquelyn Price Ward was elected to a one-year term to fill a vacancy ending November 2019.
In the election of officers, Jeffery Blackwell was elected President, Mary Sharon Reilly was elected Vice President, Gregory Redfeairn was elected Financial Secretary, and Jacquelyn Price Ward was elected Recording Secretary.

Chairs of standing committees included Tina Padilla, Investments; Gregory Redfeairn, Finance and Audit; Robert F. “Bob” Bures, Pension Laws and Administrative Rules; and Maria J. Rodriguez, Claims and Service Credits.
This annual report of the Public School Teachers’ Pension and Retirement Fund of Chicago was prepared through the combined efforts of CTPF’s Board of Trustees, the Fund’s actuary, certified public accountants, and administrative staff.

We want to express our gratitude and appreciation for the diligence of all contributors in the preparation of this publication.
Charles A. Burbridge Executive Director Alise White, CPA Chief Financial Officer 425 S. Financial Place | Suite 1400 | Chicago, Illinois 60605-1000 | 312.641.4464 | 312.641.7185 fax | www.ctpf.org | Introduction | 15 15 FINANCIAL This section contains the report of the independent public accountants, the financial statements of the Fund, along with footnotes to the financial statements, and supplemental financial information.
16 16 | Financial | | Financial | Independent Auditor's Report To the Board of Trustees Public School Teachers' Pension and Independent Auditor's Report Retirement Fund of Chicago To the Board of Trustees Public School Teachers' Pension and Report on the Financial Statements Retirement Fund of Chicago We have audited the accompanying basic financial statements of Public School Teachers' Pension and Retirement Fund of Chicago (CTPF) as of and for the years ended June 30, 2019 and 2018 and the Report on the Financial Statements related notes to the financial statements, which collectively comprise CTPF's basic financial statements, as listed in the table of contents.
We have audited the accompanying basic financial statements of Public School Teachers' Pension and Retirement Fund of Chicago (CTPF) as of and for the years ended June 30, 2019 and 2018 and the Management's Responsibility for the Financial Statements related notes to the financial statements, which collectively comprise CTPF's basic financial statements, as listed in the table of contents.
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes Management's Responsibility for the Financial Statements the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or Management is responsible for the preparation and fair presentation of these financial statements in error.
accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair Auditor's Responsibility presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of Auditor's Responsibility America.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in America.

Those standards require that we plan and perform the audits to obtain reasonable assurance the financial statements.

The procedures selected depend on the auditor's judgment, including the about whether the financial statements are free from material misstatement.
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity's An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in preparation and fair presentation of the financial statements in order to design audit procedures that are the financial statements.
The procedures selected depend on the auditor's judgment, including the appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of assessment of the risks of material misstatement of the financial statements, whether due to fraud or the entity's internal control.

Accordingly, we express no such opinion.

An audit also includes evaluating the error.


In making those risk assessments, the auditor considers internal control relevant to the entity's appropriateness of accounting policies used and the reasonableness of significant accounting estimates preparation and fair presentation of the financial statements in order to design audit procedures that are made by management, as well as evaluating the overall presentation of the financial statements.
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.

Accordingly, we express no such opinion.

An audit also includes evaluating the We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for appropriateness of accounting policies used and the reasonableness of significant accounting estimates our audit opinion.
made by management, as well as evaluating the overall presentation of the financial statements.

Opinion We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the plan net position of Public School Teachers' Pension and Retirement Fund of Chicago as of June 30, Opinion 2019 and 2018 and the changes in plan net position for the years then ended in accordance with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the plan net position of Public School Teachers' Pension and Retirement Fund of Chicago as of June 30, Emphasis of Matter 2019 and 2018 and the changes in plan net position for the years then ended in accordance with accounting principles generally accepted in the United States of America.
As explained in Note 2C, the financial statements include investments valued at $1,417,894,785 (12.8 percent of net position) at June 30, 2019 and at $1,396,303,882 (12.6 percent of net position) at June 30, Emphasis of Matter 2018 whose fair values have been estimated by management in the absence of readily determinable market values.
Management's estimates are based on information provided by the fund managers of the As explained in Note 2C, the financial statements include investments valued at $1,417,894,785 (12.8 general partners.

Our opinion is not modified with respect to this matter.

percent of net position) at June 30, 2019 and at $1,396,303,882 (12.6 percent of net position) at June 30, 2018 whose fair values have been estimated by management in the absence of readily determinable market values.
Management's estimates are based on information provided by the fund managers of the 1 general partners.

Our opinion is not modified with respect to this matter.
1 | Financial | 17 To the Board of Trustees Public School Teachers' Pension and Retirement Fund of Chicago Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and other required supplementary information, as identified in the table of contents, be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Public School Teachers' Pension and Retirement Fund of Chicago's basic financial statements.
The other supplementary information and introductory, investments, actuarial, and statistical sections, as identified in the table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements.

The other supplementary information, as identified in the table of contents, is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.
In our opinion, the other supplementary information, as identified in the table of contents, is fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory, investments, actuarial, and statistical sections, as identified in the table of contents, have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and, accordingly, we do not express an opinion or provide any assurance on them.
March 24, 2020 2 18 | Financial | MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) JUNE 30, 2019 AND 2018 ____________________________________________________________________________________ Management is pleased to provide this overview and analysis of the financial activities of the Public School Teachers’ Pension and Retirement Fund of Chicago (the Fund) for the fiscal years ended June 30, 2019 and 2018.
This information is intended to supplement the financial statements, which begin on page 28 of this report.

We encourage readers to consider additional information and data in the Fund’s 2019 Comprehensive Annual Financial Report.

ANNUAL FINANCIAL REVIEW The Fund maintains a highly diversified portfolio of investments for the purpose of accumulating sufficient assets to provide benefits to members and survivors.
Diversification of investments among U.S. stocks, real estate, fixed income, private equity, and international investments provides liquidity and risk-adjusted returns while allowing the Fund to “ride out” short-term fluctuations in individual asset classes.

The Fund returned 5.5% (time-weighted return) in fiscal year 2019.

However, since the Fund is a long-term investor, results are more significant over longer periods.
The increase in value across investment classes in previous years brought the Fund’s compounded rate of return over the past 10 years to 10.0%.

This is higher than the actuarial assumption of 7.00%.

The Fund’s consulting actuary has certified the total actuarial accrued liability of the Pension Fund to be $23.3 billion as of June 30, 2019.
This represents an increase in the total actuarial accrued liability of $0.4 billion when compared to the actuarial accrued liability of $22.9 billion as of June 30, 2018.

The unfunded actuarial accrued liability increased from $12.0 billion to $12.2 billion.

The total pension liability, under GASB 67, for fiscal years 2019 and 2018, was $25.2 billion and $24.5 billion, respectively.

FINANCIAL HIGHLIGHTS • Investment returns in fiscal year 2019 did not meet the benchmark.
This was a departure from the longer-term experience.

The investment rate of return for fiscal year 2019 on a time weighted basis was 5.5% (benchmark of 6.4%) following fiscal year 2018’s return of 9.0%.

Five and ten-year annualized returns were 6.3% (benchmark of 6.1%) and 10.0% (benchmark of 9.5%), respectively.

• Total plan fiduciary net position decreased during the fiscal year to $11.0 billion at June 30, 2019, from $11.1 billion at June 30, 2018.
• The Fund paid members $1.5 billion in service retirement, disability, refunds, and survivor benefits, an additional $58.6 million for health care benefits, and administrative expenses of $26.1 million, a 1.7% increase of the total paid to members, health care benefits and administrative expenses for fiscal year 2018.

• Total additions to plan fiduciary net position were $1.5 billion for fiscal year 2019, including total contributions of $999.1 million and net investment income of $513.6 million.
• The funded ratio for pension benefits, based on the actuarial value of assets, decreased to 47.4% as of June 30, 2019, from 47.9% at the end of the previous fiscal year.
| Financial | 19 OVERVIEW OF THE FINANCIAL STATEMENTS OF THE FUND ________________________________________________________________________________________ INVESTMENT PERFORMANCE ________________________________________________________________________________________ The two basic financial statements of the Fund are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position.
Statements are shown for the most recent and previous fiscal years for comparison and analysis of changes in individual line items.

The statements are prepared in conformity with U.S. generally accepted accounting principles.

The Statement of Fiduciary Net Position is a measure of the Fund’s assets and liabilities at the close of the fiscal year.

Total assets less liabilities equal net position restricted for benefits.
The Statement of Changes in Fiduciary Net Position shows revenues (additions) and expenses (deductions) for the fiscal year.

The net increase (or decrease) is the change in net position restricted for benefits since the end of the previous fiscal year.

For financial reporting purposes, the Fund’s assets are divided into two primary funds: the Pension Fund (a defined benefit plan) and the Health Insurance Fund (a post-employment health care plan).
The Pension Fund includes member contributions and investment earnings used to pay service retirement benefits for participants.

The Fund pays service retirement benefits using a fixed formula based on years of service and salary, subject to certain age requirements.

In addition to service retirement, participants are eligible for disability and survivor benefits.

The Health Insurance Fund consists of revenue used to subsidize health care premiums for members participating in the health care benefit.
The Notes to the Financial Statements are a fundamental part of the financial statements and provide important information to complement the understanding of the figures in the financial statements.

The notes describe accounting policies along with plan membership and benefits.

Supplementary disclosures of selected financial data are included in the notes.
In addition to the basic financial statements, a Schedule of Changes in Employer's Net Pension Liability, a Schedule of the Employer's Net Pension Liability, Schedules of the Employer’s Contributions, and a Schedule of Money-Weighted Rate of Return are included as required supplementary information for the pension plan.
The Schedule of the Employer’s Net Pension Liability and the Schedule of Changes in the Employer’s Net Pension Liability show the liability of employer and non-employer contributing entities to plan members for benefits provided through the pension plan and the changes thereof during the year.

The Schedule of Money- Weighted Rate of Return shows the period-by-period returns on pension plan investments that adjust for the changing amounts actually invested.
It represents an internal rate of return on pension plan investments, net of pension plan investment expenses.

For fiscal year 2019, the Fund’s total investment performance resulted in a 5.5% gain, based on time-weighted returns.

Domestic, international and private equity, fixed income, real estate and infrastructure generated positive returns.
The Fund's portfolio of domestic equity reported a 7.6% return, international equity reported 0.7%, fixed income reported an 8.4% return, private equity reported an 11.7% return, real estate reported a 6.3% return and infrastructure reported a 10.2% return.

The Fund’s net money-weighted rate of return for the fiscal year ended June 30, 2019, was 5.04%.
1-YEAR RETURNS (2019) Asset Category Fund Return Index Name Index Return * New Infrastructure benchmark (FTSE Core Developed Infrastructure 50/50/Index) adopted September 21, 2017.
5-YEAR RETURNS (2019) Asset Category Fund Return Index Name Index Return 5.5% 7.6% 0.7% 8.4% 11.7% 6.3% 10.2% Fund Benchmark Index Domestic Equity Benchmark International Equity Benchmark Bloomberg Aggregate Index N/A NFI-ODCE Value Weight Net Only FTSE Core Developed Infrastructure 50/50 Index* 6.3% 9.8% 3.3% 3.3% 11.6% 10.1% 7.2% Fund Benchmark Index Domestic Equity Benchmark International Equity Benchmark Bloomberg Aggregate Index N/A NFI-ODCE Value Weight Net Only Absolute Benchmark 6.4% 9.0% 0.3% 7.9% — 5.5% 14.3% 6.1% 10.2% 2.0% 3.0% — 8.8% 8.0% Total Fund Domestic Equity International Equity Fixed Income Private Equity Real Estate Infrastructure Total Fund Domestic Equity International Equity Fixed Income Private Equity Real Estate Infrastructure 20 | Financial | INVESTMENT PERFORMANCE ________________________________________________________________________________________ For fiscal year 2019, the Fund’s total investment performance resulted in a 5.5% gain, based on time-weighted returns.
Domestic, international and private equity, fixed income, real estate and infrastructure generated positive returns.

The Fund's portfolio of domestic equity reported a 7.6% return, international equity reported 0.7%, fixed income reported an 8.4% return, private equity reported an 11.7% return, real estate reported a 6.3% return and infrastructure reported a 10.2% return.

The Fund’s net money-weighted rate of return for the fiscal year ended June 30, 2019, was 5.04%.
1-YEAR RETURNS (2019) Asset Category Fund Return Index Name Index Return Total Fund Domestic Equity International Equity Fixed Income Private Equity Real Estate Infrastructure 5.5% 7.6% 0.7% 8.4% 11.7% 6.3% 10.2% Fund Benchmark Index Domestic Equity Benchmark International Equity Benchmark Bloomberg Aggregate Index N/A NFI-ODCE Value Weight Net Only FTSE Core Developed Infrastructure 50/50 Index* 6.4% 9.0% 0.3% 7.9% — 5.5% 14.3% * New Infrastructure benchmark (FTSE Core Developed Infrastructure 50/50/Index) adopted September 21, 2017.
5-YEAR RETURNS (2019) Asset Category Fund Return Index Name Index Return Total Fund Domestic Equity International Equity Fixed Income Private Equity Real Estate Infrastructure 6.3% 9.8% 3.3% 3.3% 11.6% 10.1% 7.2% Fund Benchmark Index Domestic Equity Benchmark International Equity Benchmark Bloomberg Aggregate Index N/A NFI-ODCE Value Weight Net Only Absolute Benchmark 6.1% 10.2% 2.0% 3.0% — 8.8% 8.0% | Financial | 21 ASSET ALLOCATION SUMMARY AS OF JUNE 30, 2019 DOLLARS IN MILLIONS* _____________________________________________________________________________________ * Note: Percentage indicates actual category weight as a percentage of the entire portfolio.
FINANCIAL STATEMENT ANALYSIS ________________________________________________________________________________________ PLAN FIDUCIARY NET POSITION The plan fiduciary net position decreased by $(65.9) million, (0.6)%, during fiscal year 2019 after increasing by $311.6 million, 2.9%, in fiscal year 2018.

The decrease reflects expenditures exceeding contributions and net investment income during fiscal year 2019.
Cash and cash equivalents decreased by $11.5 million during fiscal year 2019 and decreased by $330.7 million in fiscal year 2018.

The large fluctuation in cash and cash equivalents as of June 30 fiscal year-over- year is largely due to timing of the statutorily required contribution from the Board of Education (the Employer).
Prior to fiscal year 2018, the statutorily required contribution from the Board of Education was received on the last day of the fiscal year and subsequently allocated across asset classes in the investment portfolio.

22 | Financial | Total receivables, excluding amounts due from brokers, decreased by $88.2 million in 2019 after increasing by $18.0 million in 2018.

This is primarily due to a change in the composition of the revenue sources that reduces the delay in the realization of cash contributions.
As of June 30, 2019 and 2018, approximately $186.6 million and $253.0 million, respectively, was expected to be received from the property tax levy and applied toward the Employer’s required contribution amount.

Additionally, beginning with fiscal year 2018, pursuant to Public Act (P.A.)
100-0465, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance subsidy which totaled $226.8 million for fiscal year 2019.

As of June 30, 2019, there was an outstanding receivable of $37.8 million for normal cost contributions.
Receivables due from brokers (proceeds from investment sales) increased by $75.7 million in fiscal year 2019, and decreased by $50.5 million in fiscal year 2018, due to the timing of investment sales at fiscal year-end.

The Fund continued its Security Lending Fund Advance Agreement with Deutsche Bank during fiscal years 2019 and 2018.
Within the securities lending program, both collateral and collateral payable decreased by $386.8 million during fiscal year 2019 and increased by $6.4 million and $6.1 million, respectively, during fiscal year 2018.

The Fund continues to pay the collateral deficiency owed to Deutsche Bank by applying realized monthly income against the outstanding liability for the security lending program until such collateral deficiency is paid in full.

end.
end.

Accounts and administrative expenses payable increased by $3.3 million during fiscal year 2019 after increasing by $0.5 million during fiscal year 2018.

The increase in fiscal year 2019 was primarily the result of increase investment manager fees.
Liabilities due to brokers (the cash due for investment purchases) increased by $34.4 million in fiscal year 2019 and decreased by $12.9 million in fiscal year 2018 due to the timing of investment purchases at year- The following is a summary of the fiduciary net position at June 30, 2019, 2018, and 2017: Cash and cash equivalents Prepaid expenses Receivables Due from brokers Investments, at fair value Securities lending collateral Capital assets, net Total assets Benefits and refunds payable Accounts and administrative expenses payable Employer required contribution payable Securities lending collateral payable Due to brokers Total liabilities Fiscal Year (In Millions) 2019 2018 2017 $ 122.0 $ 133.5 $ — 559.6 220.5 816.0 Fiduciary net position restricted for pensions $ 11,038.8 $ 11,104.8 $ 1,174.8 1,183.9 10,793.2 Total receivables, excluding amounts due from brokers, decreased by $88.2 million in 2019 after increasing by $18.0 million in 2018.
This is primarily due to a change in the composition of the revenue sources that reduces the delay in the realization of cash contributions.

As of June 30, 2019 and 2018, approximately $186.6 million and $253.0 million, respectively, was expected to be received from the property tax levy and applied toward the Employer’s required contribution amount.

Additionally, beginning with fiscal year 2018, pursuant to Public Act (P.A.)
100-0465, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance subsidy which totaled $226.8 million for fiscal year 2019.

As of June 30, 2019, there was an outstanding receivable of $37.8 million for normal cost contributions.
Receivables due from brokers (proceeds from investment sales) increased by $75.7 million in fiscal year 2019, and decreased by $50.5 million in fiscal year 2018, due to the timing of investment sales at fiscal year-end.

The Fund continued its Security Lending Fund Advance Agreement with Deutsche Bank during fiscal years 2019 and 2018.
Within the securities lending program, both collateral and collateral payable decreased by $386.8 million during fiscal year 2019 and increased by $6.4 million and $6.1 million, respectively, during fiscal year 2018.

The Fund continues to pay the collateral deficiency owed to Deutsche Bank by applying realized monthly income against the outstanding liability for the security lending program until such collateral deficiency is paid in full.
Accounts and administrative expenses payable increased by $3.3 million during fiscal year 2019 after increasing by $0.5 million during fiscal year 2018.

The increase in fiscal year 2019 was primarily the result of increase investment manager fees.

Liabilities due to brokers (the cash due for investment purchases) increased by $34.4 million in fiscal year 2019 and decreased by $12.9 million in fiscal year 2018 due to the timing of investment purchases at year- end.
The following is a summary of the fiduciary net position at June 30, 2019, 2018, and 2017: Fiscal Year (In Millions) 2019 2018 2017 Cash and cash equivalents $ 122.0 $ 133.5 $ Prepaid expenses Receivables Due from brokers Investments, at fair value Securities lending collateral Capital assets, net Total assets Benefits and refunds payable Accounts and administrative expenses payable Employer required contribution payable Securities lending collateral payable Due to brokers Total liabilities Fiduciary net position restricted for pensions 0.3 292.9 162.4 0.1 381.1 86.6 464.2 0.1 363.1 137.2 10,715.9 10,729.7 10,070.3 560.6 0.7 11,854.8 20.9 15.0 — 559.6 220.5 947.4 1.2 12,279.6 20.2 11.7 10.4 946.4 186.1 941.0 1.2 11,977.1 23.0 11.2 10.4 940.3 199.0 816.0 11,038.8 $ 1,174.8 11,104.8 $ 1,183.9 10,793.2 $ | Financial | 23 ADDITIONS TO PLAN FIDUCIARY NET POSITION DEDUCTIONS FROM PLAN ASSETS Additions to plan fiduciary net position, which are needed to finance statutory benefit obligations, come from public sources such as state appropriations, employer and employee contributions, net earnings on investments, and miscellaneous sources.
For the year ended June 30, 2019, additions totaled $1.5 billion compared to $1.9 billion for the year ended June 30, 2018.

The minimum funding requirement represents employer contributions required by state law when the funding level drops below 90%, as well as any contribution by the State to the Fund, as those represent credits against the contribution from the Employer.

In fiscal years 2019 and 2018, the Employer and State were required to pay $808.6 million and $784.4 million, respectively.
In fiscal year 2018, P.A.

100-0465 changed the contribution requirements outlined in state law to include a required contribution from the State in the amount of $226.8 million to cover the employer normal cost and health insurance costs, which reduced the required contribution from the Employer by the same amount.

As of June 30, 2019 and 2018, the Employer and State paid $584.2 million and $762.4 million, of the respective year's required minimum contribution.
Investment returns in fiscal year 2019 were modest in comparison to fiscal year 2018 and trailed the benchmark.

Net investment income decreased primarily due to equity market fluctuations in fiscal year 2019.

The money-weighted rates of return, net of investment expenses were 5.04% and 8.93% for fiscal years 2019 and 2018, respectively.

The Fund recorded interest receivable totaling $1.4 million for fiscal year 2019 as the result of an intergovernmental agreement with the Board of Education.
The agreement stipulates that the Board of Education agrees to pay interest, at the then current actuarial rate of return, on required contribution payments that are received after June 30 of each fiscal year, beginning 2019.

The following is a summary of additions to plan fiduciary net position for the years ended June 30, 2019, 2018, and 2017: Fiscal Year (In Millions) 2019 2018 2017 Pension benefits increased during fiscal years 2019 and 2018, as new pensioners were added to the pension benefit.
Additionally, the automatic annual increase (AAI) of 3% was granted to existing retirees during these fiscal years.

Health insurance premium subsidies decreased by $(7.7) million during fiscal year 2019 after increasing by $17.8 million in fiscal year 2018.
This reflects a return to expected health insurance premium subsidy expenses for fiscal year 2019 after reimbursements from health insurance vendors increased greatly during fiscal year 2018, largely due to the implementation of a new health insurance plan.

Administrative expenses increased by $4.0 million during fiscal year 2019 as the members over payment receivables were deemed uncollectible.
Administrative expenses increased by $7.8 million during fiscal year 2018 as the Fund recognized adjustments related to previous fiscal years.
The following is a summary of deductions from plan fiduciary net position for the years ended June 30, 2019, 2018, and 2017: Pension benefits Refunds Death benefits Health insurance premium subsidies Administrative and miscellaneous expenses Total deductions $ 1,580.3 $ 1,554.7 $ 1,487.7 Fiscal Year (In Millions) 2019 2018 2017 $ 1,467.5 $ 1,437.3 $ 1,389.4 24.7 3.4 58.6 26.1 25.1 3.9 66.3 22.1 32.2 3.3 48.5 14.3 Employee contributions $ 190.6 $ 183.7 $ 569.7 238.9 513.6 1.4 0.2 551.4 233.0 896.7 1.1 0.4 187.5 734.7 12.2 1,233.0 — 0.2 $ 1,514.4 $ 1,866.3 $ 2,167.6 Minimum funding requirement (Employer) Minimum funding requirement (State) Net investment income (loss) Interest on late required contribution payments Miscellaneous Total additions 24 | Financial | DEDUCTIONS FROM PLAN ASSETS Pension benefits increased during fiscal years 2019 and 2018, as new pensioners were added to the pension benefit.
Additionally, the automatic annual increase (AAI) of 3% was granted to existing retirees during these fiscal years.

Health insurance premium subsidies decreased by $(7.7) million during fiscal year 2019 after increasing by $17.8 million in fiscal year 2018.
This reflects a return to expected health insurance premium subsidy expenses for fiscal year 2019 after reimbursements from health insurance vendors increased greatly during fiscal year 2018, largely due to the implementation of a new health insurance plan.

Administrative expenses increased by $4.0 million during fiscal year 2019 as the members over payment receivables were deemed uncollectible.
Administrative expenses increased by $7.8 million during fiscal year 2018 as the Fund recognized adjustments related to previous fiscal years.
The following is a summary of deductions from plan fiduciary net position for the years ended June 30, 2019, 2018, and 2017: Pension benefits Refunds Death benefits Health insurance premium subsidies Administrative and miscellaneous expenses Fiscal Year (In Millions) 2019 2018 2017 $ 1,467.5 $ 1,437.3 $ 1,389.4 24.7 3.4 58.6 26.1 25.1 3.9 66.3 22.1 32.2 3.3 48.5 14.3 Total deductions $ 1,580.3 $ 1,554.7 $ 1,487.7 | Financial | 25 As previously mentioned, the Schedule of the Employer’s Contribution shows the amount of required contributions in accordance with Governmental Accounting Standards Board (GASB) Statement No.
67, Financial Reporting for Pension Plans.

To partially overcome funding shortfalls, Public Act 99-0521 provides that a separate tax be levied by the Chicago Board of Education for making Employer contributions to the Fund at a rate not to exceed 0.383% beginning in fiscal year 2017.

These proceeds are to be paid directly to the Fund.
In addition, Public Act 100-0465 provides that the State shall contribute directly to the Fund the employer normal cost portion of the Board of Education’s required contribution and health insurance subsidy, and increases the tax levy amount to 0.567% beginning fiscal year 2018.
REQUESTS FOR INFORMATION: Questions about any information provided in this report should be addressed to: Public School Teachers’ Pension and Retirement Fund of Chicago ATTN: Executive Director 425 South Financial Place, Suite 1400 Chicago, IL 60605-1000 FUNDING ANALYSIS ________________________________________________________________________________________ Under the funding plan established by the State of Illinois, the Employer is not required to make a minimum contribution to the Fund unless the Fund’s funding level falls below 90% for a fiscal year.
The Employer is then required to make a minimum contribution to the Fund in order to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund, by the end of a predetermined funding period.

Amendments to the statute during fiscal year 2010 changed the funding requirements for future years.

Minimum contributions for fiscal years 2011, 2012, and 2013 were limited to $187 million, $192 million, and $196 million, respectively.
These amounts are substantially lower than the $600 million contribution in each fiscal year prior to the amendment.

Additionally, under the amended statute, the funding period was extended from 2045 to 2059.

The primary employer of the Fund, the Chicago Board of Education, was required to remit minimum required contributions of $612 million in fiscal year 2014, $696 million in fiscal year 2015, $688 million in fiscal year 2016, $733 million in fiscal year 2017, and $551 million in fiscal year 2018.
The minimum required contribution amounts include the Board of Education’s additional required contribution to offset a portion of the cost of benefit increases resulting from Public Act 90-0582.

For fiscal year 2018, the additional required contribution was $12 million.

Beginning in fiscal year 2018, P.A.


100-0465 amended state law and required the State of Illinois to contribute the employer normal cost and health insurance portions of the required contribution, which totaled $221 million for fiscal year 2018.

During fiscal year 2018, the Employer paid $125 million and the State of Illinois contributed $203 million, pursuant to P.A.

100-0465.
100-0465.

The Fund received a total of $423 million in contributions during fiscal year 2018 as a result of the special pension property tax levy.

Accordingly, $250 million was applied toward the outstanding fiscal year 2017 Employer required contribution and the remaining $173 million was applied toward the Employer's fiscal year 2018 required contribution.

Additionally, contributions of $36 million, related to previous years, remain due from the Employer as of June 30, 2018 and 2017.
In FY2019 the contributions due of $36 million from previous years was settled as a result of a settlement agreement between the employer and CTPF which resulted in a net write off of $11 million by CTPF.

State law also requires state contributions and other employer contributions to provide for benefit increases when the funding level drops below 90%.

Accordingly, the State of Illinois was required to remit $12.1 million and $11.7 million for fiscal years 2019 and 2018, respectively.
During fiscal year 2018, the State paid $11.2 million while the remaining $11.7 million was paid during fiscal year 2019.

The fiscal year 2020 Board of Education and State of Illinois required contributions are $597.2 million and $257.3 million, respectively, for a total of $854.5 million.
In accordance with Public Acts 099-0521 and 100-0465, portions of the Board of Education’s required contribution are expected to be paid from the property -tax and other Board of Education revenues and by the State of Illinois.

Based upon an actuarial valuation, the total pension liability and plan fiduciary net position are $25.2 billion and $11.0 billion, respectively.

This resulted in net pension liability of $14.1 billion as of June 30, 2019.
Amendments to the statute which were effective during fiscal year 2011 will have a longer-term impact on funding.

Public Act 96-0889, effective January 1, 2011, created a second tier of benefits for those who first participate in the system after that date.

The amendment caps the salary amount that can be used in the calculation of pensions in the future, increases the minimum retirement age, and limits post-retirement increases to pensions.
The funded ratio based on actuarial value of assets decreased to 47.4% in fiscal year 2019 from 47.9% in fiscal year 2018, for funding purposes.

The decrease is primarily due to the results of a recent experience study which resulted in updated actuarial assumptions used in calculating the actuarial accrued liability as of June 30, 2019.
26 | Financial | As previously mentioned, the Schedule of the Employer’s Contribution shows the amount of required contributions in accordance with Governmental Accounting Standards Board (GASB) Statement No.

67, Financial Reporting for Pension Plans.

To partially overcome funding shortfalls, Public Act 99-0521 provides that a separate tax be levied by the Chicago Board of Education for making Employer contributions to the Fund at a rate not to exceed 0.383% beginning in fiscal year 2017.
These proceeds are to be paid directly to the Fund.

In addition, Public Act 100-0465 provides that the State shall contribute directly to the Fund the employer normal cost portion of the Board of Education’s required contribution and health insurance subsidy, and increases the tax levy amount to 0.567% beginning fiscal year 2018.
REQUESTS FOR INFORMATION: Questions about any information provided in this report should be addressed to: Public School Teachers’ Pension and Retirement Fund of Chicago ATTN: Executive Director 425 South Financial Place, Suite 1400 Chicago, IL 60605-1000 | Financial | 27 STATEMENT OF FIDUCIARY NET POSITION AS OF JUNE 30, 2019 AND 2018 ________________________________________________________________________________________ JUNE 30, 2019 JUNE 30, 2018 PENSION FUND HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE PENSION FUND HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE Assets: Cash and cash equivalents $ 121,996,481 $ — $ 121,996,481 $ 133,497,617 $ — $ 133,497,617 Prepaid expense Receivables: Minimum funding requirement (Employer) Minimum funding requirement (State) Employee Accrued investment income Due from brokers Participating teachers’ accounts for contributions 324,753 186,608,225 37,797,000 11,247,826 39,268,564 162,389,723 4,681,191 — — — — — — — 324,753 90,787 186,608,225 289,191,260 37,797,000 30,133,667 11,247,826 9,304,638 39,268,564 37,521,126 162,389,723 86,639,726 4,681,191 4,636,522 — — — — — — — 90,787 289,191,260 30,133,667 9,304,638 37,521,126 86,639,726 4,636,522 Other receivables 8,364,555 4,915,284 13,279,839 5,627,642 4,688,184 10,315,826 Total receivables $ 450,357,084 $ 4,915,284 $ 455,272,368 $ 463,054,581 $ 4,688,184 $ 467,742,765 Investments, at fair value: U.S. government and agency fixed income U.S. corporate fixed income Foreign fixed income securities U.S. equities Foreign equities Public REITs Pooled short-term investment funds Real estate Infrastructure Private equity 1,381,549,632 1,080,629,549 60,378,150 3,115,916,532 3,249,511,598 157,753,245 359,473,153 719,817,831 210,950,505 379,931,583 — — — — — — — — — — 1,381,549,632 1,299,056,547 1,080,629,549 1,060,376,104 60,378,150 58,787,954 3,115,916,532 3,108,323,201 3,249,511,598 3,336,876,903 157,753,245 144,771,014 359,473,153 447,399,457 719,817,831 746,521,607 210,950,505 227,364,041
 379,931,583 300,228,413 — — — — — — — — — — 1,299,056,547 1,060,376,104 58,787,954 3,108,323,201 3,336,876,903 144,771,014 447,399,457 746,521,607 227,364,041 300,228,413 Total investments $ 10,715,911,778 $ — $ 10,715,911,778 $ 10,729,705,241 $ — $ 10,729,705,241 Securities lending collateral 560,663,605 Capital assets, net of accumulated depreciation 705,360 — — 560,663,605 947,417,427 705,360 1,190,580 — — 947,417,427 1,190,580 Total assets $ 11,849,959,061 $ 4,915,284 $ 11,854,874,345 $ 12,274,956,233 $ 4,688,184 $ 12,279,644,417 Death benefits 3,406,487 3,406,487 3,951,010 3,951,010 Liabilities: Benefits payable Refunds payable Accounts and administrative expenses payable Employer required contribution payable Securities lending collateral payable Due to brokers Total liabilities Net position restricted for pension benefits 4,510,886 4,902,177 9,413,063 4,681,391 4,624,300 9,305,691 11,502,175 — 11,502,175 10,860,495 — 10,860,495 14,953,962 13,107 14,967,069 11,694,890 63,884 11,758,774 — 559,602,193 220,552,386 — — — — 10,449,000 559,602,193 946,404,347 220,552,386 186,100,596 — — — 10,449,000 946,404,347 186,100,596 $ 811,121,602 $ 4,915,284 $ 816,036,886 $ 1,170,190,719 $ 4,688,184 $ 1,174,878,903 The accompanying notes are an integral part of these financial statements.
$ 11,038,837,459 $ — $ 11,038,837,459 $ 11,104,765,514 $ — $ 11,104,765,514 The accompanying notes are an integral part of these financial statements.
28 | Financial | STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2019 AND 2018 ___________________________________________________________________________________________ PENSION FUND JUNE 30, 2019 HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE PENSION FUND JUNE 30, 2018 HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE $ 190,565,220 $ — $ 190,565,220 $ 183,679,205 $ — $ 183,679,205 569,701,000 238,869,000 569,701,000 551,410,000 238,869,000 232,992,000 551,410,000 232,992,000 (59,089,369) 59,089,369 — (66,867,696) 66,867,696 — Total contributions $ 940,045,851 $ 59,089,369 $ 999,135,220 $ 901,213,509 $ 66,867,696 $ 968,081,205 — — — — — — — — — — — — — 660,578,461 86,397,678 182,949,696 1,081,966 4,500,198 1,123,915 351,361 1,437,264,031 24,323,083 742,315 (40,498,179) — (40,498,179) (38,803,455) — (38,803,455) $ 513,576,400 $ — $ 513,576,400 $ 896,704,544 $ — $ 896,704,544 255,501,019 92,918,909 199,555,823 1,253,766 4,845,062 1,449,709 238,261 24,133,854 562,230 255,501,019 660,578,461 92,918,909 86,397,678 199,555,823 182,949,696 1,253,766 1,081,966 4,845,062 4,500,198 1,449,709 1,123,915 238,261 351,361 24,133,854 24,323,083 562,230 742,315 Total additions $ 1,455,310,221 $ 59,089,369 $ 1,514,399,590 $ 1,799,393,329 $ 66,867,696 $ 1,866,261,025 Pension benefits 1,467,513,811 1,467,513,811 1,437,264,031 — 58,611,532 58,611,532 — 66,333,655 66,333,655 Total benefit payments $ 1,495,616,382 $ 58,611,532 $ 1,554,227,914 $ 1,466,280,439 $ 66,333,655 $ 1,532,614,094 25,621,894 477,837 26,099,731 21,521,303 534,041 22,055,344 Total deductions $ 1,521,238,276 $ 59,089,369 $ 1,580,327,645 $ 1,487,801,742 $ 66,867,696 $ 1,554,669,438 (65,928,055) — (65,928,055) 311,591,587 — 311,591,587 Beginning of year 11,104,765,514 — 11,104,765,514 10,793,173,927 — 10,793,173,927 End of year $11,038,837,459 $ — $ 11,038,837,459 $11,104,765,514 $ — $ 11,104,765,514 Additions: Contributions: Employee Minimum funding requirement (Employer) Minimum funding requirement
 (State) Allocation to health insurance fund Investment income: Net appreciation in fair value Interest Dividends Miscellaneous Securities lending income, net Less investment expenses: Investment advisory and custodial fees Net investment income Interest on late required contribution payments Miscellaneous Deductions: Refunds 2.2 Legislative refunds Refunds of insurance premiums Administrative and miscellaneous expenses Net increase (decrease) Net position restricted for pension benefits — — — — — — — — — — — — — STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2019 AND 2018 ___________________________________________________________________________________________ PENSION FUND JUNE 30, 2019 HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE PENSION FUND JUNE 30, 2018 HEALTH INSURANCE FUND TOTAL FUND - PENSION AND HEALTH INSURANCE $ 190,565,220 $ — $ 190,565,220 $ 183,679,205 $ — $ 183,679,205 569,701,000 238,869,000 — — 569,701,000 551,410,000 238,869,000 232,992,000 — — 551,410,000 232,992,000 (59,089,369) 59,089,369 — (66,867,696) 66,867,696 — Additions: Contributions: Employee Minimum funding requirement (Employer) Minimum funding requirement (State) Allocation to health insurance fund Total contributions $ 940,045,851 $ 59,089,369 $ 999,135,220 $ 901,213,509 $ 66,867,696 $ 968,081,205 Investment income: Net appreciation in fair value Interest Dividends Miscellaneous Securities lending income, net Less investment expenses: Investment advisory and custodial fees Net investment income Interest on late required contribution payments Miscellaneous 255,501,019 92,918,909 199,555,823 1,253,766 4,845,062 — — — — — 255,501,019 660,578,461 92,918,909 86,397,678 199,555,823 182,949,696 1,253,766 1,081,966 4,845,062 4,500,198 — — — — — 660,578,461 86,397,678 182,949,696 1,081,966 4,500,198 (40,498,179) — (40,498,179) (38,803,455) — (38,803,455) $ 513,576,400 $ — $ 513,576,400 $ 896,704,544 $ — $ 896,704,544 1,449,709 238,261 — — 1,449,709
 1,123,915 238,261 351,361 — — 1,123,915 351,361 Total additions $ 1,455,310,221 $ 59,089,369 $ 1,514,399,590 $ 1,799,393,329 $ 66,867,696 $ 1,866,261,025 Deductions: Pension benefits 1,467,513,811 Refunds 2.2 Legislative refunds Refunds of insurance premiums 24,133,854 562,230 — — — 1,467,513,811 1,437,264,031 24,133,854 24,323,083 562,230 742,315 — — — 1,437,264,031 24,323,083 742,315 — 58,611,532 58,611,532 — 66,333,655 66,333,655 Death benefits 3,406,487 — 3,406,487 3,951,010 — 3,951,010 Total benefit payments $ 1,495,616,382 $ 58,611,532 $ 1,554,227,914 $ 1,466,280,439 $ 66,333,655 $ 1,532,614,094 Administrative and miscellaneous expenses 25,621,894 477,837 26,099,731 21,521,303 534,041 22,055,344 Total deductions $ 1,521,238,276 $ 59,089,369 $ 1,580,327,645 $ 1,487,801,742 $ 66,867,696 $ 1,554,669,438 Net increase (decrease) Net position restricted for pension benefits (65,928,055) — (65,928,055) 311,591,587 — 311,591,587 Beginning of year 11,104,765,514 — 11,104,765,514 10,793,173,927 — 10,793,173,927 End of year $11,038,837,459 $ — $ 11,038,837,459 $11,104,765,514 $ — $ 11,104,765,514 The accompanying notes are an integral part of these financial statements.
| Financial | 29 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 AND 2018 ___________________________________________________________________________________________ (1) DESCRIPTION OF PENSION AND HEALTH INSURANCE PLANS (A) PENSION PLAN The Public School Teachers’ Pension and Retirement Fund of Chicago (the Fund) is the administrator of a multiple employer cost-sharing defined benefit public employee retirement system.
The state legislature established the Fund in 1895 to provide retirement, survivor, and disability benefits for certain certified teachers and employees of the Chicago Public and Charter Schools, as well as Fund employees.

The Fund is administered in accordance with Illinois Compiled Statutes (ILCS) Chapter 40, Act 5, Articles 1, 17, and 20.
The Fund is governed by a twelve member Board of Trustees (six elected by the teacher contributors, three elected by the annuitants, one elected by the principal and administrator contributors, and two appointed by the primary employer, the Chicago Board of Education).

The Board of Trustees is authorized by state law to make investments, pay benefits, hire staff and consultants, and carry out all necessary functions in compliance with the Illinois Pension Code.
As of June 30, 2019, the Fund had 45 participating employers consisting of the primary employer, Chicago Public Schools, 41 charter employers comprising 128 campuses, the Illinois Federation of Teachers, the Chicago Teachers Union, and the Fund itself.

The State of Illinois is a non-employer contributing entity.
As of June 30, 2019 and 2018, Fund membership consisted of the following: Retirees and beneficiaries currently receiving benefits Terminated members entitled to benefits but not yet receiving them Current members: Vested Nonvested 2019 28,317 9,926 16,655 12,640 67,538 2018 28,549 9,398 17,065 11,893 66,905 The State of Illinois Public Act (P.A.)
96-0889 created a second tier of benefits for teachers who first become participants in the Fund, or other public pension funds in the State of Illinois, after January 1, 2011.

Plan provisions for the two tiers are described below: Tier I Eligibility A member with at least 20 years of service and who has attained 60 years of age is entitled to an unreduced pension.

A member with at least 20 years of service and who has attained 55 years of age is entitled to a reduced pension.
A member with at least 5 but less than 20 years of service is entitled to a pension upon attainment of age 62.

In the case of retirement prior to age 60 with less than 33.95 years of service, the retirement pension is reduced one-half of 1% for each month that the member is under age 60.
Benefit A retirement pension is determined by either (1) applying specified percentages which vary with years of service to the average of the four highest consecutive years of salary earned or (2) applying a flat 2.2% to the average of the four highest consecutive years of salary earned in the 10 years preceding retirement.

P.A.

90-852 increased the retirement annuity formula to 2.2% of final average salary for each year of service earned after June 30, 1998.
Employees who retired with CTPF as their final retirement system and have 30 years of cumulative service credit will be upgraded to the 2.2% formula without any additional cost.

Employees who retired with less than 30 years of cumulative service credit may upgrade to the 2.2% formula for years prior to July 1, 1998, by making certain additional contributions to the Fund.
To qualify for the 2.2% upgrade, employees must have been employed at the time the law became effective or earned at least one year of service after the effective date.

Beginning July 1, 1998, employee contributions increase from 8% to 9% of salary to account for the increased benefit.

30 | Financial | Survivor & Death Benefits A survivor pension may be payable upon the death of a contributor or retired member of the Fund.
The survivor's pension is the greater of 50% of earned pension or an amount based on a percentage of the average of the four highest years of salary in the last 10 years of service.

A single-sum death benefit is also payable upon the death of a contributor or retired member of the Fund, if certain qualifications are met.

Disability Pension A disability pension is payable in the event of permanent disability with certain qualifications and service requirements.
A disability pension (non-duty related) is payable to a member with 10 or more years of service.

A non-duty disability benefit is determined by either (1) applying specified percentages which vary with years of service to the final average salary earned (4 highest consecutive years) or (2) applying a flat 2.2% to the average salary earned for each year of service.
A duty disability benefit is provided upon the total incapacity for further teaching as a result of an injury sustained while in teaching service.

The duty disability benefit is equal to 75% of final salary or the salary at time of injury/accident, and is payable until the attainment of age 65.
Annual Increase • Annuitants who retired after 1959 receive an annual 3% increase in the retirement pension beginning January 1 following the member’s 61st birthday or the first anniversary of retirement, whichever is later.

• Survivor annuitants receive an annual 3% increase to the survivor pension beginning January 1 immediately following the effective date of the benefit.
If the member was not retired upon death, the increase is granted on January 1 following the first anniversary of the member’s death.

• A 3% increase is paid on non-duty disability pensions only after the first anniversary of the pension or the pensioner’s 61st birthday, whichever is later.

A member receiving duty disability benefits is not eligible for an automatic annual increase.
TIER II Eligibility Benefit The Tier II benefit structure is applicable to persons who first became a member or a participant under any reciprocal retirement system or pension fund established under the Illinois Pension Code on or after January 1, 2011.

A member with at least 10 years of service and who has attained 67 years of age is entitled to an unreduced pension.

A member with at least 10 years of service and who has attained 62 years of age is entitled to a reduced pension.
In the case of retirement prior to age 67, the retirement pension is reduced one-half of 1% for each month that the member is under age 67.

A retirement pension is determined by applying a flat 2.2% to the average of the eight highest consecutive years of salary earned in the 10 years preceding retirement.
In accordance with Public Acts 96-0889, 96-1490, 96-1495, 98-0622, and 98-641, the Department of Insurance (Department) is to annually determine certain annuity limitations for use in benefit determination by pension funds operating under the Illinois Pension Code.

For calendar year 2019, the Department determined that the maximum earnings, salary, or wages that can be used in calculating pension is approximately $114,952.
Survivor & Death Benefits A survivor pension is payable upon the death of a contributor or retired member of the Fund.

The survivor’s pension for an eligible survivor of a retired Tier II member is 66 2/3% of the retirement annuity at the date of death.

In the case of a Tier II member who was not retired at the time of death, the survivor’s pension is 66 2/3% of the earned annuity without a reduction for age.
A single-sum death benefit is also payable upon the death of a contributor or retired member of the Fund, with certain qualifications.

Survivor & Death Benefits A survivor pension may be payable upon the death of a contributor or retired member of the Fund.

The survivor's pension is the greater of 50% of earned pension or an amount based on a percentage of the average of the four highest years of salary in the last 10 years of service.
A single-sum death benefit is also payable upon the death of a contributor or retired member of the Fund, if certain qualifications are met.

Disability Pension A disability pension is payable in the event of permanent disability with certain qualifications and service requirements.

A disability pension (non-duty related) is payable to a member with 10 or more years of service.
A non-duty disability benefit is determined by either (1) applying specified percentages which vary with years of service to the final average salary earned (4 highest consecutive years) or (2) applying a flat 2.2% to the average salary earned for each year of service.

A duty disability benefit is provided upon the total incapacity for further teaching as a result of an injury sustained while in teaching service.
The duty disability benefit is equal to 75% of final salary or the salary at time of injury/accident, and is payable until the attainment of age 65.

Annual Increase • Annuitants who retired after 1959 receive an annual 3% increase in the retirement pension beginning January 1 following the member’s 61st birthday or the first anniversary of retirement, whichever is later.
• Survivor annuitants receive an annual 3% increase to the survivor pension beginning January 1 immediately following the effective date of the benefit.

If the member was not retired upon death, the increase is granted on January 1 following the first anniversary of the member’s death.

• A 3% increase is paid on non-duty disability pensions only after the first anniversary of the pension or the pensioner’s 61st birthday, whichever is later.
A member receiving duty disability benefits is not eligible for an automatic annual increase.

TIER II Eligibility The Tier II benefit structure is applicable to persons who first became a member or a participant under any reciprocal retirement system or pension fund established under the Illinois Pension Code on or after January 1, 2011.

A member with at least 10 years of service and who has attained 67 years of age is entitled to an unreduced pension.
A member with at least 10 years of service and who has attained 62 years of age is entitled to a reduced pension.

In the case of retirement prior to age 67, the retirement pension is reduced one-half of 1% for each month that the member is under age 67.

Benefit A retirement pension is determined by applying a flat 2.2% to the average of the eight highest consecutive years of salary earned in the 10 years preceding retirement.
In accordance with Public Acts 96-0889, 96-1490, 96-1495, 98-0622, and 98-641, the Department of Insurance (Department) is to annually determine certain annuity limitations for use in benefit determination by pension funds operating under the Illinois Pension Code.

For calendar year 2019, the Department determined that the maximum earnings, salary, or wages that can be used in calculating pension is approximately $114,952.
Survivor & Death Benefits A survivor pension is payable upon the death of a contributor or retired member of the Fund.

The survivor’s pension for an eligible survivor of a retired Tier II member is 66 2/3% of the retirement annuity at the date of death.

In the case of a Tier II member who was not retired at the time of death, the survivor’s pension is 66 2/3% of the earned annuity without a reduction for age.
A single-sum death benefit is also payable upon the death of a contributor or retired member of the Fund, with certain qualifications.

| Financial | 31 Disability Pension (B) BASIS OF ACCOUNTING A disability pension is payable in the event of permanent disability with certain qualifications and service requirements.
A non-duty disability pension is payable after 10 or more years of service, and is determined by applying a flat 2.2% to the average of the eight highest consecutive years of salary earned within the last ten years.

A duty disability benefit, equal to 75% of final salary or the salary at time of injury/accident, may be payable when the teacher becomes wholly and presumably incapacitated for duty as a result of an injury sustained while on duty.
Annual Increase • Members who retire receive an automatic annual increase, equal to the lesser of 3% of the annual pension or 1/2 the increase in the Consumer Price Index for all Urban Consumers (CPI-U), for the preceding year.

The automatic annual increase is paid beginning January 1 following the member’s 67th birthday or the first anniversary of retirement, whichever occurs later.
• An automatic annual increase, equal to the lesser of 3% of the annual pension or 1/2 the annual increase in the Consumer Price Index for all Urban Consumers of the original survivor’s pension amount is paid: 1) on each January 1 occurring on or after the commencement of the survivor’s pension, if the deceased member died while receiving a retirement pension, or 2) on each January 1 after the first anniversary of the commencement of the survivor’s pension, if the deceased member dies before retirement.
• An automatic annual increase, equal to the lesser of 3% of the annual pension or 1/2 the increase in the Consumer Price Index for all Urban Consumers of the original pension amount, is paid on disability pensions after the first anniversary of the pension or the pensioner’s 67th birthday, whichever is later.

A member receiving duty disability benefits is not eligible for an automatic annual increase.
(B) HEALTH INSURANCE PLAN The Fund administers a health insurance program that includes three external health insurance providers.

A recipient of a retirement pension, survivor pension, or disability pension may be eligible to participate in a health insurance program and premium rebate sponsored by the Fund, provided the Fund is the member’s final pension system prior to retirement.

The purpose of the program is to help defray the retired member’s premium cost for health insurance.
The member is responsible for paying the cost of the insurance and may purchase insurance from the Fund’s providers or other outside providers.

Each year, the Board of Trustees establishes a rebate percentage that is used to defray a portion of the cost of the insurance.

The rebate percentage for fiscal years 2019 and 2018 was 50%.
In accordance with Chapter 40, Act 5, Article 17, Section 17-142.1 of the ILCS, the total health insurance benefits provided in any one year may not exceed $65,000,000 plus any previous years’ amounts authorized but not expended.

Previous years’ amounts authorized but not expended at June 30, 2019 and 2018 are $40,271,956 and $34,361,325, respectively.

The Fund has total discretion over the program.


In fiscal year 2018, Public Act 100-0465 amends state law and requires the State of Illinois to contribute the normal cost and health insurance subsidy portions of the required contribution for each fiscal year.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) REPORTING ENTITY As defined by generally accepted accounting principles established by the Governmental Accounting Standards Board (GASB), a financial reporting entity consists of a primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable.

Financial accountability is defined as: 1.


Appointment of a voting majority of the component unit’s board and either (a) the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government; or 2.

Fiscal dependency on the primary government and financial benefit/burden relationship.
Based upon the required criteria, the Fund has no component units and is not a component unit of any other entity.

32 | Financial | The Fund’s financial statements are prepared using the accrual basis of accounting and the economic resources measurement focus, following standards promulgated by the GASB.

Revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period incurred.
Employer contributions are recognized when due and the employer has a formal legal obligation to provide the contribution.

Employee contributions are recognized upon receipt of contribution data for the Plan members.

Benefits and refunds are recognized as deductions when due and payable, in accordance with the terms of the plan.

(C) CASH AND CASH EQUIVALENTS AND INVESTMENTS Cash and cash equivalents include amounts in demand deposits and uninvested funds held by the Fund’s investment managers.
Investments are governed by Chapter 40, Act 5, Article 17 of the ILCS.

These statutes authorize the Fund to invest in accordance with the prudent person rule, which states that fiduciaries will exercise the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity with such matters would use in the conduct of an enterprise of a like character with like aims.

Investments are reported at fair value.


Where appropriate, the fair value includes estimated disposition costs.

Fair value for equity securities is determined by using the closing price listed on the national securities exchanges as of June 30.

Fair value for fixed income securities are determined principally by using quoted market prices provided by independent pricing services.
The financial statements include investments valued at $1,417,894,785 (12.8% of fund net position) at June 30, 2019 and at $1,396,303,882 (12.6% of fund net position) at June 30, 2018, whose fair values have been estimated by management in the absence of readily determinable market values.

For commingled funds, the net asset value is determined and certified by the commingled fund manager as of June 30.
Alternative investments, which include private equity, real estate and infrastructure are valued based on amounts established by the fund managers or general partners which are subject to annual audit.

The fair value of the derivative instruments that are not exchange traded is determined by external pricing services using various pricing methods which are based upon the type of the derivative instrument.

Purchases and sales of securities are reflected on the trade date.
Dividend income is recorded on the ex-dividend rate.

Interest income is recorded as earned on an accrual basis.

(D) CAPITAL ASSETS for furniture and equipment.

(E) ADMINISTRATIVE EXPENSES Capital assets are reported at cost.

Depreciation is computed using the straight-line method based upon estimated useful lives of 50 years for building and improvements, 10 years for the benefit payment system, and 3 to 5 years Administrative expenses are budgeted and approved by the Fund’s Board of Trustees.
Funding for these expenses is included in the employer contributions as determined by the annual actuarial valuation.

(F) RISKS AND UNCERTAINTIES The Fund invests in various investment securities.

Investment securities are exposed to various risks including interest rate, market, and credit risks.
Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of fiduciary net position.
(G) USE OF ESTIMATES In preparing financial statements in conformity with U.S. generally accepted accounting principles, the Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of additions and deductions during the reporting period.

Actual results could differ from those estimates and assumptions.
(B) BASIS OF ACCOUNTING The Fund’s financial statements are prepared using the accrual basis of accounting and the economic resources measurement focus, following standards promulgated by the GASB.

Revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period incurred.

Employer contributions are recognized when due and the employer has a formal legal obligation to provide the contribution.
Employee contributions are recognized upon receipt of contribution data for the Plan members.

Benefits and refunds are recognized as deductions when due and payable, in accordance with the terms of the plan.

(C) CASH AND CASH EQUIVALENTS AND INVESTMENTS Cash and cash equivalents include amounts in demand deposits and uninvested funds held by the Fund’s investment managers.

Investments are governed by Chapter 40, Act 5, Article 17 of the ILCS.
These statutes authorize the Fund to invest in accordance with the prudent person rule, which states that fiduciaries will exercise the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity with such matters would use in the conduct of an enterprise of a like character with like aims.

Investments are reported at fair value.

Where appropriate, the fair value includes estimated disposition costs.
Fair value for equity securities is determined by using the closing price listed on the national securities exchanges as of June 30.

Fair value for fixed income securities are determined principally by using quoted market prices provided by independent pricing services.
The financial statements include investments valued at $1,417,894,785 (12.8% of fund net position) at June 30, 2019 and at $1,396,303,882 (12.6% of fund net position) at June 30, 2018, whose fair values have been estimated by management in the absence of readily determinable market values.

For commingled funds, the net asset value is determined and certified by the commingled fund manager as of June 30.
Alternative investments, which include private equity, real estate and infrastructure are valued based on amounts established by the fund managers or general partners which are subject to annual audit.

The fair value of the derivative instruments that are not exchange traded is determined by external pricing services using various pricing methods which are based upon the type of the derivative instrument.

Purchases and sales of securities are reflected on the trade date.
Dividend income is recorded on the ex-dividend rate.

Interest income is recorded as earned on an accrual basis.

(D) CAPITAL ASSETS Capital assets are reported at cost.

Depreciation is computed using the straight-line method based upon estimated useful lives of 50 years for building and improvements, 10 years for the benefit payment system, and 3 to 5 years for furniture and equipment.

(E) ADMINISTRATIVE EXPENSES Administrative expenses are budgeted and approved by the Fund’s Board of Trustees.
Funding for these expenses is included in the employer contributions as determined by the annual actuarial valuation.

(F) RISKS AND UNCERTAINTIES The Fund invests in various investment securities.

Investment securities are exposed to various risks including interest rate, market, and credit risks.
Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of fiduciary net position.
(G) USE OF ESTIMATES In preparing financial statements in conformity with U.S. generally accepted accounting principles, the Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of additions and deductions during the reporting period.

Actual results could differ from those estimates and assumptions.
| Financial | 33 (H) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED The Fund's management has evaluated the new accounting pronouncements first effective for the years ended June 30, 2019 & 2018 and determined there was no impact to the Fund.

(I) CPS FINANCIAL STATUS The Chicago Public School District (CPS) has had a structurally balanced budget for the previous two fiscal years due, in part, to more equitable state funding and the State of Illinois passing its budget.

For fiscal year 2018, P.A.


100-0465, which was passed in August, 2017, allows for a rate increase in the Special Pension Property Tax Levy, which was established under P.A.

99-0521, from 0.383% to 0.567%.

Beginning with fiscal year 2018, P.A.

100-0465 also requires the State of Illinois to pay the normal cost and health insurance portions of CPS' required contribution.
These are positive factors which alleviate some of the uncertainty regarding CPS’ ability to meet future obligations, including pension contributions to the Fund, which remains heavily dependent on these contributions each year in order to reach 90% funding by 2059.

(J) HEALTH INSURANCE FUND Beginning with fiscal year 2018, P.A.

100-0465 required the State of Illinois to contribute the pension normal cost portion of the annual required contribution, plus the health insurance subsidy.
Each year, in accordance with Illinois State law, the Fund makes transfers from the pension fund into the health insurance fund equal to the amount of OPEB expenses for that year.

Per Section 17-147.1, the OPEB payments in any year may not exceed $65 million plus any amount that was authorized to be paid in the preceding year but was not spent (carryover).
A review of the substance of the underlying transactions of the Fund and related Pension Code resulted in a conclusion by the Fund that the assets in the health insurance fund are neither in an OPEB qualifying trust as defined by GASB 74, nor are those amounts restricted legally or otherwise required to be used solely to pay OPEB benefits.

While the health insurance fund assets could be used to pay OPEB, there is no limitation on their use solely for OPEB purposes.
Therefore, since the health insurance fund assets are not restricted for OPEB, they are not considered assets available to offset the OPEB liability.

However, because those amounts do result from restricted contributions to the Fund for pension, those residual assets are restricted for pension benefits.

See Note 1B on page 32 for health insurance amounts authorized but not expended as of June 30, 2019 and 2018.
34 | Financial | (3) RECEIVABLES AND PAYABLES Required contributions from the Board of Education and State of Illinois are included in the receivables as of June 30, 2019 and 2018.

As of June 30, 2019, the outstanding Employer receivable included $186.6 million of the Board of Education's required contribution for fiscal year 2019, which was received by the end of August, 2019.

The State of Illinois owed the Fund $37.8 million as of June 30, 2019, which was received in total early September 2019.
All receivables outstanding as of June 30, 2019, related to the fiscal year 2019 Employer and State of Illinois required contributions, were received prior to September 30, 2019.

As of June 30, 2018, the outstanding Employer receivable included $253.0 million of the Board of Education's required contribution for fiscal year 2018, which was received by the end of August, 2018.
The remaining $36.2 million due to the Fund from the Employer consists of contributions related to fiscal years 2016, 2015, and 2014.

The State of Illinois owed the Fund $11.7 million as of June 30, 2018, which was received early in July, 2018, prior to the end of the lapse period.

All receivables outstanding as of June 30, 2018, related to the fiscal year 2018 Employer and State of Illinois required contributions, were received prior to August, 2018.
Employee receivables included retirement contributions deducted from employees’ compensation by the Employer during the year to be remitted to the Fund and contributions to be made by employees to upgrade to the 2.2 pension formula.

The Employer owed $9,134,946 and $7,103,397 on behalf of the employees at June 30, 2019 and 2018, respectively.

Employees owed the Fund $2,097,460 and $2,179,917 for the 2.2 pension formula upgrade at June 30, 2019 and 2018, respectively.
As of June 30, 2019 and 2018, there were other miscellaneous contributions of $15,420 and $21,324, respectively.

(4) INVESTMENT POLICIES, ASSET ALLOCATION, AND MONEY-WEIGHTED The Board is responsible for prudent investment and expenditure of the Fund’s assets.

The Board of Trustees has the authority to establish and amend investment policy decisions.

The pension plan’s policy with respect to the allocation of invested assets is established and may be amended by the Fund’s Board of Trustees.
The following table represents the Board’s adopted asset allocation policy as of June Asset Class Target Allocation 2019 61.0% 23.0% 2.0% 5.0% 9.0% 100.0% 2018 61.0% 23.0% 2.0% 5.0% 9.0% 100.0% MONEY-WEIGHTED RATE OF RETURN For the years ended June 30, 2019 and 2018, the annual money-weighted rate of return on plan investments, net of investment expenses, were 5.04% and 8.93%, respectively.
The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested.

RATE OF RETURN INVESTMENT POLICY ASSET ALLOCATION 30, 2019 and 2018: Equity Fixed Income Infrastructure Private Equity Real Estate Grand Total (3) RECEIVABLES AND PAYABLES Required contributions from the Board of Education and State of Illinois are included in the receivables as of June 30, 2019 and 2018.
As of June 30, 2019, the outstanding Employer receivable included $186.6 million of the Board of Education's required contribution for fiscal year 2019, which was received by the end of August, 2019.

The State of Illinois owed the Fund $37.8 million as of June 30, 2019, which was received in total early September 2019.

All receivables outstanding as of June 30, 2019, related to the fiscal year 2019 Employer and State of Illinois required contributions, were received prior to September 30, 2019.
As of June 30, 2018, the outstanding Employer receivable included $253.0 million of the Board of Education's required contribution for fiscal year 2018, which was received by the end of August, 2018.

The remaining $36.2 million due to the Fund from the Employer consists of contributions related to fiscal years 2016, 2015, and 2014.

The State of Illinois owed the Fund $11.7 million as of June 30, 2018, which was received early in July, 2018, prior to the end of the lapse period.
All receivables outstanding as of June 30, 2018, related to the fiscal year 2018 Employer and State of Illinois required contributions, were received prior to August, 2018.

Employee receivables included retirement contributions deducted from employees’ compensation by the Employer during the year to be remitted to the Fund and contributions to be made by employees to upgrade to the 2.2 pension formula.
The Employer owed $9,134,946 and $7,103,397 on behalf of the employees at June 30, 2019 and 2018, respectively.

Employees owed the Fund $2,097,460 and $2,179,917 for the 2.2 pension formula upgrade at June 30, 2019 and 2018, respectively.

As of June 30, 2019 and 2018, there were other miscellaneous contributions of $15,420 and $21,324, respectively.
(4) INVESTMENT POLICIES, ASSET ALLOCATION, AND MONEY-WEIGHTED RATE OF RETURN INVESTMENT POLICY The Board is responsible for prudent investment and expenditure of the Fund’s assets.

The Board of Trustees has the authority to establish and amend investment policy decisions.

ASSET ALLOCATION The pension plan’s policy with respect to the allocation of invested assets is established and may be amended by the Fund’s Board of Trustees.
The following table represents the Board’s adopted asset allocation policy as of June 30, 2019 and 2018: Asset Class Equity Fixed Income Infrastructure Private Equity Real Estate Grand Total 2019 61.0% 23.0% 2.0% 5.0% 9.0% 100.0% Target Allocation 2018 61.0% 23.0% 2.0% 5.0% 9.0% 100.0% MONEY-WEIGHTED RATE OF RETURN For the years ended June 30, 2019 and 2018, the annual money-weighted rate of return on plan investments, net of investment expenses, were 5.04% and 8.93%, respectively.
The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested.

| Financial | 35 (5) DEPOSITS AND INVESTMENTS CUSTODIAL CREDIT RISK - DEPOSITS Custodial credit risk for deposits is the risk that, in the event of a financial institution failure, the Fund’s deposits may not be returned.
All noninvestment-related bank balances at year-end are insured or collateralized by securities recorded in the Fund’s name and held by the Fund’s agent, its master custodian (BNY Mellon).

Cash held in the investment-related bank account is neither insured nor collateralized for amounts in excess of $250,000.

There is no deposit policy for custodial credit risk.
Deposit balances at June 30 2019 2018 Bank balance $ Amount exposed to custodial credit risk 110,844,258 $ 110,344,258 693,850 332,277 INVESTMENTS The following table presents a summary of the Fund’s investments at fair values at June 30, 2019 and 2018: Category Fair Value 2019 2018 U.S. Government and Agency Fixed Income $ 1,381,549,632 $ U.S. Corporate Fixed Income Foreign Fixed Income Commingled Common Stock Commingled Emerging Markets Commingled Corporate Bonds Commingled Infrastructure Commingled Real Estate U.S. Equities Foreign Equities Public REITs Foreign Public REITs Pooled Short-Term Investment Funds U.S. Real Estate Foreign Real Estate U.S. Infrastructure Foreign Infrastructure Private Equity Total Investments 1,043,456,226 60,378,150 194,421,572 160,327,597 37,173,323 92,237,539 527,703,726 3,115,916,532 2,894,762,428 144,326,400 13,426,845 359,473,153 192,114,105 — 80,301,189 38,411,777 379,931,584 1,299,056,547 1,001,801,816 58,787,954 220,506,365 155,214,389 58,574,288 98,529,258 589,294,692 3,108,323,201 2,961,156,149 133,137,562 11,633,452 447,399,457 147,094,211 10,132,704 100,172,213 28,662,570 300,228,413 $ 10,715,911,778 $ 10,729,705,241 (B) CREDIT RISK Credit risk is the risk that the Fund will not recover its investments due to the inability of the counterparty to fulfill its obligation.
The Fund does not have a formal investment policy which limits its exposure to credit risk.
The following table presents the quality ratings of debt securities held by the Fund as of June 30, 2019 S&P Credit Rating Commercial Mortgage Backed Commingled Fixed Income Corporate Bonds Government Agencies Government Bonds Government Mortgage Backed Municipal Bonds $ 7,523,807 $ — $ 22,996,770 $ 1,170,985 $ 247,087 $ 737,140 $ 2,064,718 67,112,696 8,809,040 778,856,916 344,257,029 9,392,459 Not Rated 49,732,850 37,173,323 57,345,055 8,863,251 126,898,131 82,172,481 689,700 Total $ 72,569,307 $ 37,173,323 $ 988,694,040 $ 73,751,932 $ 906,002,134 $ 427,166,650 $ 17,199,944 As of June 30, 2019, there are no investments in U.S. government agencies that are only implicitly guaranteed by For comparative purposes, the following table presents the quality ratings of debt securities held by the Fund as of the U.S. government.
June 30, 2018 S&P Credit Rating Commercial Mortgage Backed Commingled Fixed Income Corporate Bonds Government Agencies Government Bonds Government Mortgage Backed Municipal Bonds $ 12,404,925 $ — $ 43,188,009 $ 982,600 $ 245,862 $ — $ 2,372,825 69,013,494 5,401,407 857,283,897 282,003,387 9,802,713 12,312,557 784,151 2,001,162 213,953 — — 828 — — 16,083,978 552,283 1,891,447 1,002,500 — 1,120,450 1,003 — 27,288 — — — — — — — — — — — — — — — — — — 348,731,281 21,194,913 460,688,795 16,126,842 28,162,006 13,382,284 3,657,438 4,204,619 — — — — — — — — — — — — — — — — 310,836,094 20,276,577 412,000,111 19,340,023 35,464,132 11,818,569 3,993,325 4,161,937 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,056,204 1,996,863 — — — — — — 2,965,877 1,615,061 — — — — — 486,118 AAA AA A BBB BB B CCC CC C D AAA AA A BBB BB B CCC CC C D (A) CUSTODIAL CREDIT RISK - INVESTMENTS The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the Fund will not be able to recover the value of investments or collateral securities that are in the possession of an outside party.
The Fund does not have a formal investment policy which limits its exposure to custodial credit risk.

As of June 30, 2019 and 2018, the following investments were uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the Fund’s name.
Balance at June 30 Margin Cash 2019 2018 $ 7,938,591 $ 3,701,978 Not Rated 61,334,777 58,574,288 61,677,041 4,715,275 9,398,691 96,002,480 182,161 Total $ 94,418,651 $ 58,574,288 $ 936,172,206 $ 66,696,388 $ 866,928,450 $ 378,005,867 $ 17,424,755 As of June 30, 2018, there were no investments in U.S. government agencies that are only implicitly guaranteed by the U.S. government.

(C) CONCENTRATION OF CREDIT RISK or 2018.


There are no investments in any issuer that represent 5% or more of fiduciary net position as of June 30, 2019 36 | Financial | (B) CREDIT RISK Credit risk is the risk that the Fund will not recover its investments due to the inability of the counterparty to fulfill its obligation.

The Fund does not have a formal investment policy which limits its exposure to credit risk.
The following table presents the quality ratings of debt securities held by the Fund as of June 30, 2019 S&P Credit Rating Commercial Mortgage Backed Commingled Fixed Income Corporate Bonds Government Agencies Government Bonds Government Mortgage Backed Municipal Bonds AAA AA A BBB BB B CCC CC C D $ 7,523,807 $ — $ 22,996,770 $ 1,170,985 $ 247,087 $ 737,140 $ 2,064,718 12,312,557 784,151 2,001,162 — — 213,953 828 — — — — — — — — — — — 67,112,696 8,809,040 778,856,916 344,257,029 9,392,459 348,731,281 21,194,913 460,688,795 16,126,842 28,162,006 13,382,284 3,657,438 4,204,619 — — — — — — — — — — — — — — — — — — — — — — — — 3,056,204 1,996,863 — — — — — — Not Rated 49,732,850 37,173,323 57,345,055 8,863,251 126,898,131 82,172,481 689,700 Total $ 72,569,307 $ 37,173,323 $ 988,694,040 $ 73,751,932 $ 906,002,134 $ 427,166,650 $ 17,199,944 As of June 30, 2019, there are no investments in U.S. government agencies that are only implicitly guaranteed by the U.S. government.
For comparative purposes, the following table presents the quality ratings of debt securities held by the Fund as of June 30, 2018 S&P Credit Rating Commercial Mortgage Backed Commingled Fixed Income Corporate Bonds Government Agencies Government Bonds Government Mortgage Backed Municipal Bonds AAA AA A BBB BB B CCC CC C D $ 12,404,925 $ — $ 43,188,009 $ 982,600 $ 245,862 $ — $ 2,372,825 16,083,978 552,283 1,891,447 1,002,500 — 1,120,450 1,003 — 27,288 — — — — — — — — — 69,013,494 5,401,407 857,283,897 282,003,387 9,802,713 310,836,094 20,276,577 412,000,111 19,340,023 35,464,132 11,818,569 3,993,325 4,161,937 — — — — — — — — — — — — — — — — — — — — — — — — 2,965,877 1,615,061 — — — — 486,118 — Not Rated 61,334,777 58,574,288 61,677,041 4,715,275 9,398,691 96,002,480 182,161 Total $ 94,418,651 $ 58,574,288 $ 936,172,206 $ 66,696,388 $ 866,928,450 $ 378,005,867 $ 17,424,755 As of June 30, 2018, there were no investments in U.S. government agencies that are only implicitly guaranteed by the U.S. government.
(C) CONCENTRATION OF CREDIT RISK There are no investments in any issuer that represent 5% or more of fiduciary net position as of June 30, 2019 or 2018.
| Financial | 37 Commercial Mortgage Backed $ 72,569,307 37,173,323 988,694,040 73,751,932 906,002,133 427,166,650 17,199,944 Commingled Fixed Income Funds Corporate Bonds Government Agencies Government Bonds Government Mortgage Backed Municipal Bonds Total $ 2,522,557,331 $ 2,418,220,605 $ 2,894,762,428 115.12% $ 2,961,156,149 100.00% 0.11 0.01 3.05 0.17 2.46 0.75 0.05 $ 94,418,651 58,574,288 936,172,206 66,696,388 866,928,450 378,005,867 17,424,755 0.14 0.02 2.89 0.15 2.35 0.66 0.05 (D) INTEREST RATE RISK Interest rate risk is the risk that the fair value of the Fund’s investments will decrease as a result of an increase in interest rates.
The following table presents the weighted average maturity of debt securities held by the Fund as of June 30, 2019 and 2018 Currency Base Market Value Percentage Base Market Value Percentage Foreign Equities (continued): June 30, 2019 June 30, 2018 $ 704,730 0.02% $ 0.02% Investment Type Fair Value Effective Duration (Years) Fair Value Effective Duration (Years) June 30, 2019 June 30, 2018 Polish Zloty Qatari Riyal Russian Ruble Singapore Dollar South African Rand South Korean Won Swedish Krona Swiss Franc Thai Baht Turkish Lira U.S. Dollar U.A.E.
Dirham Total Argentine Peso Australian Dollar Brazilian Real British Pound Canadian Dollar Danish Krone Euro Japanese Yen Mexican Peso New Zealand Dollar Norwegian Krone Russian Ruble (NEW) South African Rand U.S. Dollar Total British Pound Euro Singapore Dollar South African Rand Total Euro Total Euro Japanese Yen U.S. Dollar Total 542,300 107,757 85,488 25,534,214 20,229,409 71,025,874 52,717,801 103,762,416 15,095,732 6,529,898 384,619,315 237,145 151,876 8,317,647 2,269,207 245,862 2,989,641 — — 5,555,017 1,968,643 0.00 0.00 0.86 0.68 2.40 1.78 3.50 0.51 0.22 12.99 0.01 0.26 14.22 3.88 0.42 — 5.11 — 9.50 3.37 77,741 73,119 35,904,939 20,197,567 40,926,285 55,260,795 134,095,518 16,694,819 606,418 434,941,437 164,468 759,549 348,048 9,617,520 1,178,238 247,087 3,141,530 — — 436,395 147,515 — — — — — — $ $ $ $ $ 0.00 0.00 1.24 0.70 1.41 1.91 4.63 0.58 0.02 15.03 0.01 0.67 18.40 2.25 0.47 — 6.01 — 0.84 0.28 — — — — 18,301,734 35.02 14,540,048 24.86 133,436 0.26% 17,807,122 34.07% 144,255 0.28 21,265,381 36.37 52,262,429 100.00% $ 58,478,628 100.00% 10,293,509 76.66% $ 9,670,776 83.13% 3,133,336 23.34 1,447,614 12.44 237,340 277,722 2.04 2.39 —% $ 28,662,570 100.00% —% $ 28,662,570 100.00% $ 2,926,617 28.88% 3,955,779 3,250,308 39.04 32.08 $ 10,293,509 76.66% $ 10,132,704 100.00% Foreign Public REITs: June 30, 2019 June 30, 2018 Foreign Infrastructure: June 30, 2019 June 30, 2018 13,426,845 100.00% $ 11,633,452 100.00% Foreign Real Estate: June 30, 2019 June 30, 2018 The Fund does not have a formal investment policy that limits investment maturities as a means of managing its exposure to potential fair value losses arising from future changes in interest rates.
Foreign Fixed Income: June 30, 2019 June 30, 2018 $ 1.45% $ 1,175,306 2.01% (E) FOREIGN CURRENCY RISK Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a deposit.

The Fund does not have a formal investment policy which limits its exposure to foreign currency risk.
The following table presents the foreign currency risk by type of investment as of June 30, 2019 and 2018 Currency Foreign Equities: Australian Dollar Brazilian Real British Pound Canadian Dollar Chilean Peso Colombian Peso Czech Koruna Danish Krone Euro Hong Kong Dollar Hungarian Forint Indian Rupee Indonesian Rupiah Israeli Shekel Japanese Yen Malaysian Ringgit Mexican Peso New Taiwan Dollar New Zealand Dollar Nigerian Naira Norwegian Krone Pakistani Rupee Philippine Peso 38 Base Market Value Percentage Base Market Value Percentage June 30, 2019 June 30, 2018 $ 32,238,260 1.11% $ — 1.16 0.01 0.03 1,439,723 11,712,763 85,246,668 1,763,720 196,146 45,278,070 209,060 734,473 0.05 0.40 2.88 0.06 0.01 1.53 0.01 0.02 1,716,750 13,739,052 71,684,105 5,846,504 135,663 33,664,372 189,065 977,590 | Financial | Currency Foreign Equities (continued): Polish Zloty Qatari Riyal Russian Ruble Singapore Dollar South African Rand South Korean Won Swedish Krona Swiss Franc Thai Baht Turkish Lira U.S. Dollar U.A.E.
Dirham Total Foreign Fixed Income: Argentine Peso Australian Dollar Brazilian Real British Pound Canadian Dollar Danish Krone Euro Japanese Yen Mexican Peso New Zealand Dollar Norwegian Krone Russian Ruble (NEW) South African Rand U.S. Dollar Total Foreign Public REITs: British Pound Euro Singapore Dollar South African Rand Total Foreign Infrastructure: Euro Total Base Market Value Percentage Base Market Value Percentage June 30, 2019 704,730 0.02% $ June 30, 2018 542,300 0.02% $ $ 2,894,762,428 115.12% $ 2,961,156,149 100.00% June 30, 2019 759,549 $ June 30, 2018 1.45% $ 1,175,306 2.01% 348,048 9,617,520 1,178,238 247,087 — 3,141,530 — 0.67 18.40 2.25 0.47 — 6.01 — 151,876 8,317,647 2,269,207 245,862 — 2,989,641 — 0.26 14.22 3.88 0.42 — 5.11 — 18,301,734 35.02 14,540,048 24.86 436,395 147,515 0.84 0.28 133,436 0.26% 5,555,017 1,968,643 9.50 3.37 144,255 0.28 21,265,381 36.37 17,807,122 34.07% 52,262,429 100.00% $ 58,478,628 100.00% June 30, 2019 10,293,509 76.66% $ June 30, 2018 9,670,776 83.13% 3,133,336 23.34 1,447,614 12.44 — — — — 237,340 277,722 2.04 2.39 13,426,845 100.00% $ 11,633,452 100.00% June 30, 2019 — June 30, 2018 —% $ 28,662,570 100.00% — —% $ 28,662,570 100.00% $ $ $ $ $ Foreign Real Estate: June 30, 2019 June 30, 2018 2,926,617 $ — — — — 3,955,779 3,250,308 28.88% 39.04 32.08 Euro Japanese Yen U.S. Dollar Total $ 10,293,509 76.66% $ 10,132,704 100.00% | Financial | 39 (F) SECURITIES LENDING As permitted by state statutes and under the provisions of a securities lending authorization agreement, the Fund lends securities to broker-dealers and banks for collateral that will be returned for the same securities in the future.
Deutsche Bank AG manages the Fund’s securities lending program and receives cash or government securities as collateral.

Deutsche Bank AG does not have the ability to pledge or sell collateral securities unless the borrower defaults.

Borrowers are required to deliver collateral for each loan equal to not less than 102% of the market value of the loaned securities.

As of June 30, 2019 and 2018, the collateral provided was 102.11% and 102.33% of the market value of the loaned securities, respectively.
The Fund did not impose any restrictions during the fiscal year on the amount of loans made on its behalf by Deutsche Bank AG.

There were no failures by any borrowers to return loaned securities or pay distributions thereon during the fiscal year.

Moreover, there were no losses during the fiscal year resulting from a default of the borrowers or Deutsche Bank AG.

The Fund and the borrowers maintain the right to terminate all securities lending transactions on demand.
The cash collateral received on each loan was invested in indemnified repurchase agreements or maintained in segregated accounts in the name of the Chicago Teachers’ Pension Fund.

The average duration of this investment pool as of June 30, 2019 and 2018 was 30.8 days and 43.7 days, respectively.

Because the loans are terminable on demand, their duration did not generally match the duration of the investments made with cash collateral.
As of June 30, 2019 and 2018, the Fund had no credit risk exposure to borrowers.

The collateral held (at cost) and the fair market values of underlying securities on loan for the Fund as of June 30, 2019, were $559,602,193 and $548,019,165, respectively.

For comparative purposes, the collateral held (at cost) and the fair market values of underlying securities on loan for the Fund as of June 30, 2018, were $946,404,347 and $924,851,487, respectively.
The following table represents the fair market value balances relating to the securities lending transactions as of June 30, 2019 and 2018: Category U.S. Agency U.S. Equity U.S. Government Corporate Bond International Equity Total Fair Market Value of Underlying Securities Lent as of June 30 2019 2018 $ 4,091,187 $ 9,149,002 289,815,908 178,992,256 54,734,215 20,385,599 412,172,529 401,117,975 75,305,699 27,106,282 $ 548,019,165 $ 924,851,487 The fair market value of collateral of the securities lending program at June 30, 2019 was $560,663,605, compared to $947,417,427 at June 30, 2018.
The investments were in repurchase agreements.

All of these securities had a duration of less than one year.

There is no custodial credit risk or interest rate risk associated with the collateral pool.
The credit ratings of the securities lending collateral pool held at June 30, 2019 and 2018 as rated by S&P are as follows: S&P Credit Rating Collateral Amount as of June 30 2019 2018 A-1+ A-1 A-2 Not Rated Total $ $ 25,000,000 $ 370,000,000 85,000,000 80,663,605 560,663,605 $ 5,000,000 651,500,000 47,500,000 243,417,427 947,417,427 40 | Financial | (6) DERIVATIVES The Fund accounts for its derivative instruments in accordance with GASB Statement No.
53, Accounting and Financial Reporting for Derivative Instruments.

A derivative instrument is an instrument or contract whose value is derived from that of other financial instruments such as stocks, bonds and commodities, interest rates or a market index.

The Fund’s derivatives are considered investment derivative instruments.
The following table summarizes the derivatives held within the Fund’s investment portfolio as of June 30, 2019 and 2018: Derivative Type Notional Amounts Fair Value 2019 2018 2019 2018 A.

Foreign currency contracts purchased $ Foreign currency contracts sold — $ — — $ (129,312,399) $ (115,001,952) — 129,411,222 114,316,681 B.
Futures: C. Options: Purchased Written Rights and Warrants D. E. Swaps: Long equity Long fixed income Short fixed income 6,572,320 14,293,265 420,377,201 588,403,583 152,189 7,397,899 (236,789,116) (206,956,999) (1,815,514) — — — — — 335,869 (964,117) 175,645 — — — — — Credit default swaps Interest rate swaps (5,736,927) (1,738,609) 740,442 34,320 Total $ 190,160,405 $ 395,739,849 $ 384,310 $ (1,115,872) (274,637) 1,475,606 (278,150) 374,284 (394,289) 370,874 (A) FORWARD CURRENCY FORWARD CONTRACTS Forward currency contracts are two-sided contracts in the form of either forward purchases or forward sales.
The Fund’s use of these securities is limited to small positions in the Fund’s portfolio to hedge fluctuations in foreign currency.
The fair values of forward currency contracts outstanding as of June 30, 2019 and 2018 were as follows: Foreign currency exchange sales Currency Fair Value 2019 2018 $ (271,382) $ (3,017,756) Chinese Yuan Renminbi Australian Dollar Brazilian Real British Pound Canadian Dollar Colombian Peso Euro Hungarian Forint Hong Kong Dollar Indian Rupee Indonesian Rupiah Israeli Shekel Japanese Yen Mexican Peso New Taiwan Dollar (71,853) (103,071) (945,536) (1,208,743) (1,325,326) (5,276,988) (8,195,311) (16,487,694) (15,286,466) (347,533) (791,751) (79,301) (156,034) (3,576,999) (7,535,169) (8,896) — — — — — (682,835) (9,510,708) (7,199,728) (5,814,906) (51,334) (1,394,120) (6) DERIVATIVES The Fund accounts for its derivative instruments in accordance with GASB Statement No.
53, Accounting and Financial Reporting for Derivative Instruments.

A derivative instrument is an instrument or contract whose value is derived from that of other financial instruments such as stocks, bonds and commodities, interest rates or a market index.

The Fund’s derivatives are considered investment derivative instruments.
The following table summarizes the derivatives held within the Fund’s investment portfolio as of June 30, 2019 and 2018: Derivative Type Notional Amounts Fair Value 2019 2018 2019 2018 A.

Foreign currency contracts purchased $ Foreign currency contracts sold — $ — — $ (129,312,399) $ (115,001,952) — 129,411,222 114,316,681 B.
Futures: Long equity Long fixed income Short fixed income 6,572,320 14,293,265 420,377,201 588,403,583 152,189 7,397,899 (236,789,116) (206,956,999) (1,815,514) C. Options: Purchased Written D. E. Rights and Warrants Swaps: Credit default swaps Interest rate swaps — — — — — — — — — — (274,637) 1,475,606 (278,150) 374,284 (394,289) 370,874 335,869 (964,117) 175,645 (5,736,927) (1,738,609) 740,442 34,320 Total $ 190,160,405 $ 395,739,849 $ 384,310 $ (1,115,872) (A) FORWARD CURRENCY FORWARD CONTRACTS Forward currency contracts are two-sided contracts in the form of either forward purchases or forward sales.
The Fund’s use of these securities is limited to small positions in the Fund’s portfolio to hedge fluctuations in foreign currency.
The fair values of forward currency contracts outstanding as of June 30, 2019 and 2018 were as follows: Foreign currency exchange sales Currency Australian Dollar Brazilian Real British Pound Canadian Dollar Chinese Yuan Renminbi Colombian Peso Euro Hungarian Forint Hong Kong Dollar Indian Rupee Indonesian Rupiah Israeli Shekel Japanese Yen Mexican Peso New Taiwan Dollar Fair Value 2019 2018 $ (271,382) $ (3,017,756) (71,853) (103,071) (945,536) (1,208,743) (1,325,326) (5,276,988) (8,195,311) (79,301) — (16,487,694) (15,286,466) (156,034) — (347,533) (791,751) (3,576,999) (7,535,169) (8,896) — — — (682,835) (9,510,708) (7,199,728) (5,814,906) (51,334) (1,394,120) | Financial | 41 Currency Fair Value (B) OPTIONS New Zealand Dollar Phillipine Peso Pound Sterling South African Rand Swedish Krona Swiss Franc U.S. Dollar Total Foreign currency exchange purchases Argentine Peso Australian Dollar Brazilian Real British Pound Canadian Dollar Chinese Yuan Reniminbi Danish Krone Euro Hong Kong Dollar Indian Rupee Indonesian Rupiah Israeli Shekel Japanese Yen Mexican Peso New Taiwan Dollar New Zealand Dollar Norwegian Krone Philippines Peso Polish Zloty Pound Sterling Singapore Dollar South African Rand Swedish Krona Swiss Franc Turkish Lira U.S. Dollar Total $ $ (385,317) — (12,250,129) (5,886,055) (692,537) (155,164) — (802,739) — (9,342) (92,597) — (72,072,026) (62,629,007) (129,312,399) $(115,001,952) 420,251 $ 638,712 5,736,482 5,939,422 5,226,425 4,529,122 — $ 129,411,222 $ 114,316,681 42 | Financial | Options represent a financial derivative that represents a contract sold by one party to another party.
The contract offers the buyer the right, but not the obligation, to buy or sell a security or other financial assets at an agreed-upon price during a certain period of time or a specific date.

The Fund’s use of options investment vehicle is limited to small positions in the Fund’s portfolio due to the sophistication and risky nature of options.
(C) FUTURES CONTRACTS Financial futures are agreements to purchase or sell a specific amount of an asset at a specified delivery or maturity date for an agreed-upon price.

The Fund’s managers use financial futures to improve yield, to adjust the duration of the fixed income portfolio, and to replicate an index.

(D) STOCK RIGHTS AND WARRANTS A stock right is the right to the holder as a current shareholder in a company to buy additional shares at a discount over the current market price.
Warrants are instruments which when purchased are priced above the current market, and allow the holder to purchase shares in a company at a specified future point in time.

As a holder of warrants, the Fund bears the risk that the share price will drop below the cost of the warrant.

(E) SWAPS Swaps are agreements to exchange currency or assets.

The Fund invests in swaps to manage exposure to credit, currency, inflation, and interest rate risks.
Credit default swap and synthetic default swap agreements involve one party making a stream of payments (the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, The following table summarizes the changes in fair value, which were recognized as investment income in the Fund’s statement of changes in fiduciary net position at June 30, 2019 and 2018: obligation, or index.
(F) CHANGES IN FAIR VALUE Derivative Type Foreign Currency Contracts Rights and Warrants Options Swaps Total (G) CREDIT RISK Changes in Fair Value 2019 2018 (482,689) $ (1,259,650) 149,083 139,376 192,175 171,696 (4,168,634) (5,501,562) (4,362,863) $ (6,397,341) $ $ Credit risk is the risk that the Fund will not recover its investments due to the inability of the counterparty to fulfill its obligation.
It is the Fund’s policy to enter into netting arrangements whenever it has more than one derivative instrument transaction with a counterparty.

Under the terms of these arrangements, should one party become insolvent or otherwise default on its obligations, close-out netting provisions permit the nondefaulting party to accelerate and terminate all outstanding transactions and net the transactions’ fair values so that a single sum will be owed by, or owed to, the nondefaulting party.
(B) OPTIONS Options represent a financial derivative that represents a contract sold by one party to another party.

The contract offers the buyer the right, but not the obligation, to buy or sell a security or other financial assets at an agreed-upon price during a certain period of time or a specific date.

The Fund’s use of options investment vehicle is limited to small positions in the Fund’s portfolio due to the sophistication and risky nature of options.
(C) FUTURES CONTRACTS Financial futures are agreements to purchase or sell a specific amount of an asset at a specified delivery or maturity date for an agreed-upon price.

The Fund’s managers use financial futures to improve yield, to adjust the duration of the fixed income portfolio, and to replicate an index.

(D) STOCK RIGHTS AND WARRANTS A stock right is the right to the holder as a current shareholder in a company to buy additional shares at a discount over the current market price.
Warrants are instruments which when purchased are priced above the current market, and allow the holder to purchase shares in a company at a specified future point in time.

As a holder of warrants, the Fund bears the risk that the share price will drop below the cost of the warrant.

(E) SWAPS Swaps are agreements to exchange currency or assets.

The Fund invests in swaps to manage exposure to credit, currency, inflation, and interest rate risks.
Credit default swap and synthetic default swap agreements involve one party making a stream of payments (the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation, or index.
(F) CHANGES IN FAIR VALUE The following table summarizes the changes in fair value, which were recognized as investment income in the Fund’s statement of changes in fiduciary net position at June 30, 2019 and 2018: Derivative Type Foreign Currency Contracts Options Rights and Warrants Swaps Total (G) CREDIT RISK Changes in Fair Value 2019 2018 (482,689) $ (1,259,650) 149,083 139,376 192,175 171,696 (4,168,634) (5,501,562) (4,362,863) $ (6,397,341) $ $ Credit risk is the risk that the Fund will not recover its investments due to the inability of the counterparty to fulfill its obligation.
It is the Fund’s policy to enter into netting arrangements whenever it has more than one derivative instrument transaction with a counterparty.

Under the terms of these arrangements, should one party become insolvent or otherwise default on its obligations, close-out netting provisions permit the nondefaulting party to accelerate and terminate all outstanding transactions and net the transactions’ fair values so that a single sum will be owed by, or owed to, the nondefaulting party.
| Financial | 43 (H) INTEREST RATE RISK (A) MEMBER CONTRIBUTIONS The Fund manages its exposure to fair value losses from interest rate risk for the derivatives portfolio using the effective duration contribution method on the portfolio as a whole.

Duration is a weighted average of the maturity of all the income streams from the portfolio of the fixed income instruments.
The following is the effective duration of the Fund’s fixed income derivatives at June 30, 2019 and 2018: Fair Value Effective Duration (Years) Fair Value Effective Duration (Years) Derivative Type 2019 2018 Futures fixed income (long and short, net) Options Total $ $ 5,582,386 (628,248) 4,954,137 2.13 (0.08) $ $ 1,197,456 (20,005) 1,177,451 1.30 (0.17) (7) CONTRIBUTIONS AND RESERVES On an annual basis, an actuarial valuation is performed in order to determine the amount of required contributions on behalf of the Fund.
The ILCS (Public Act 89-15) provides for an actuarially determined funding plan intended to maintain the assets of the Fund at a level equal to 90% of the liabilities of the Fund.

The Chicago Board of Education (Employer) is required by law to make contributions to the Fund only to the extent that the Fund’s actuarially determined funding level drops below 90% by the end of the fiscal year.
The Employer is then required to make contributions to the Fund in order to ensure the actuarial value of assets is 90% of the actuarial value of liabilities by 2059.

In years where the funding rate exceeds 90%, no Employer contribution is required.

In fiscal years 2019 and 2018, the Employer and the State were required to make contributions of $808.6 million and $784.4 million, respectively.
These figures represent the annual required contributions per Article 17 and are not representative of the actuarially determined contributions.

Accordingly, the Employer and State paid $584.2 million and $762.4 million in fiscal years 2019 and 2018, respectively, with remaining amounts being recorded as receivables as of those dates.
Public Act 99-0521, enacted June, 2016, provided that a separate tax be levied by the Chicago Board of Education for the purposes of making an Employer contribution to the Fund at a rate not to exceed 0.383%.

Subsequently, Public Act 100-0465, enacted August, 2017, allowed that rate to be increased to 0.567%.

As a result, Employer contribution receivables of $186.6 million and $253.0 million were outstanding as of June 30, 2019 and 2018, respectively.
These amounts were received via property tax levy proceeds by August of the following fiscal years, satisfying the outstanding Employer required contributions for fiscal years 2019 and 2018.

As of June 30, 2018, the Employer owed $289.2 million, including a total of $36.2 million in required contributions related to fiscal years 2014 through 2016 and the State of Illinois owed $11.7 million.
The Fund's Board of Trustees and the Chicago Board of Education executed an intergovernmental agreement early in fiscal year 2019 which resolved the total outstanding $36.2 million receivable and $10.4 million payable related to prior fiscal years.

As part of this settlement, CTPF received $14.3 million in satisfaction of the net amount due of $25.8 million.

In the fiscal year ended June 30, 2019, P.A.


100-0465 required the State of Illinois to contribute the normal cost portion of the annual required contribution, including the health insurance subsidy.

As a result, the Fund allocated the $65.0 million health insurance subsidy from the normal cost plus an additional $1.3 million from prior year health insurance amounts authorized but not expended to pay health insurance benefits for retirees.
This resulted in a total subsidy amount of $59 million to fund health insurance benefits in fiscal year 2019.

During the fiscal year ended June 30, 2018, the Fund did not receive state funding for the health insurance plan.

As a result, the Fund allocated approximately $66.9 million of the Employer contribution to pay health benefits to Fund retirees.
Although the statutory contribution requirements were met in fiscal years 2019 and 2018, the statutory funding method generates a contribution requirement that is less than a reasonable actuarially determined contribution.

The ability of the Fund to reach 90% funding by 2059 is heavily dependent on the State and the Board of Education contributing the statutorily required contributions each year until 2059.
Member contributions, established by the ILCS, are 9% of the total regular salary rate, of which 1% applies to survivor and child pension benefits.

For employees hired prior to January 1, 2017, CPS contributes 7% of the 9% required member contributions.

For employees hired after January 1, 2017, there is no employer pick-up.

The non- CPS employers also pick up a portion of the required employee contribution.
Fund employees also participate as members in the Fund and are included in the number of total current members.

Contributions made by the Fund for Fund employees totaled $527,053 and $476,146 for the years ended June 30, 2019 and 2018, respectively, which is 100% of the employee contributions required to be made by the Fund.

(A) NONEMPLOYER CONTRIBUTIONS As noted earlier in Note 7, the State of Illinois makes an annual contribution to the Fund to supplement any Employer contribution.
Federal funds, which are included in the Employer minimum funding requirement, are actuarially-based amounts contributed to the Fund for the accruing pension cost of teachers whose salaries are paid from special trusts or federal funds.
(8) NET PENSION LIABILITY OF PARTICIPATING EMPLOYER The components of the net pension liability at June 30, 2019 and 2018 were as follows: Plan fiduciary net position as a percentage of the total pension liability 43.86% 45.24% 2019 2018 25,166,179,329 $ 24,547,482,873 11,038,837,459 11,104,765,514 14,127,341,870 $ 13,442,717,359 $ $ Total pension liability Plan fiduciary net position Employer's net pension liability ACTUARIAL ASSUMPTIONS The total pension liability was determined by actuarial valuations as of June 30, 2019 and 2018, using the following actuarial assumptions, applied to all periods included in the measurement: Pension Plan 2019 2018 Actuarial Cost Method Entry Age Normal Entry Age Normal Cost-of-Living Adjustment 3% compound for Tier I members; the lesser of 3% or 1/2 of CPI-U, simple, for Tier II Participants 3% compound for Tier I members; the lesser of 3% or 1/2 of CPI-U, simple, for Tier II Participants Inflation General inflation rate, 2.50% Wage inflation rate, 3.00% General inflation rate, 2.50% Wage inflation rate, 3.00% Investment Rate of Return 7.00%, net of investment expenses 7.00%, net of investment expenses Salary Increases 3.00% to 12.85%, varying by age 3.00% to 12.85%, varying by age For healthy participants, mortality rates were based on the RP-2014 White Collar Healthy Annuitant mortality table, sex distinct.
For disabled participants, mortality rates were based on the RP-2014 Disabled Annuitant mortality table, sex distinct.

The actuarial assumptions to be used for the June 30, 2019, funding actuarial valuation were adopted by the Board of Trustees during the September 19, 2019, Board meeting, and were based on a review of the fiscal year 2018 assumptions adjusted for actual experience.
In fiscal year 2019, the actuary did not recommend any changes to the assumptions that were used in the fiscal year 2018 funding valuation.

The actuarial assumptions to be used for the June 30, 2018, funding actuarial valuation were adopted by the Board of Trustees during the September 20, 2018, Board meeting, and were based on the recommendations from an experience review for the five-year period from July 1, 2012 through June 30, 2017.
44 | Financial | (A) MEMBER CONTRIBUTIONS Member contributions, established by the ILCS, are 9% of the total regular salary rate, of which 1% applies to survivor and child pension benefits.

For employees hired prior to January 1, 2017, CPS contributes 7% of the 9% required member contributions.

For employees hired after January 1, 2017, there is no employer pick-up.

The non- CPS employers also pick up a portion of the required employee contribution.
Fund employees also participate as members in the Fund and are included in the number of total current members.

Contributions made by the Fund for Fund employees totaled $527,053 and $476,146 for the years ended June 30, 2019 and 2018, respectively, which is 100% of the employee contributions required to be made by the Fund.

(A) NONEMPLOYER CONTRIBUTIONS As noted earlier in Note 7, the State of Illinois makes an annual contribution to the Fund to supplement any Employer contribution.
Federal funds, which are included in the Employer minimum funding requirement, are actuarially-based amounts contributed to the Fund for the accruing pension cost of teachers whose salaries are paid from special trusts or federal funds.
(8) NET PENSION LIABILITY OF PARTICIPATING EMPLOYER The components of the net pension liability at June 30, 2019 and 2018 were as follows: Total pension liability Plan fiduciary net position Employer's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ $ 2019 2018 25,166,179,329 $ 24,547,482,873 11,038,837,459 11,104,765,514 14,127,341,870 43.86% $ 13,442,717,359 45.24% ACTUARIAL ASSUMPTIONS The total pension liability was determined by actuarial valuations as of June 30, 2019 and 2018, using the following actuarial assumptions, applied to all periods included in the measurement: Pension Plan 2019 2018 Actuarial Cost Method Entry Age Normal Entry Age Normal Cost-of-Living Adjustment 3% compound for Tier I members; the lesser of 3% or 1/2 of CPI-U, simple, for Tier II Participants 3% compound for Tier I members; the lesser of 3% or 1/2 of CPI-U, simple, for Tier II Participants Inflation General inflation rate, 2.50% Wage inflation rate, 3.00% General inflation rate, 2.50% Wage inflation rate, 3.00% Investment Rate of Return 7.00%, net of investment expenses 7.00%, net of investment expenses Salary Increases 3.00% to 12.85%, varying by age 3.00% to 12.85%, varying by age For healthy participants, mortality rates were based on the RP-2014 White Collar Healthy Annuitant mortality table, sex distinct.
For disabled participants, mortality rates were based on the RP-2014 Disabled Annuitant mortality table, sex distinct.

The actuarial assumptions to be used for the June 30, 2019, funding actuarial valuation were adopted by the Board of Trustees during the September 19, 2019, Board meeting, and were based on a review of the fiscal year 2018 assumptions adjusted for actual experience.
In fiscal year 2019, the actuary did not recommend any changes to the assumptions that were used in the fiscal year 2018 funding valuation.

The actuarial assumptions to be used for the June 30, 2018, funding actuarial valuation were adopted by the Board of Trustees during the September 20, 2018, Board meeting, and were based on the recommendations from an experience review for the five-year period from July 1, 2012 through June 30, 2017.
| Financial | 45 The long-term expected rate of return on pension plan investments was determined under a building-block method by using the current risk free rate and historical risk premium for each major asset class to develop the best- estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) for each major asset class.
Best estimates of geometrically determined real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 and 2018, are summarized in the following table: Asset Class Equities Fixed Income Infrastructure Private Equity Real Estate Long-Term Expected Real Rate of Return 2019 5.30% 2.10% 4.67% 7.05% 6.66% 2018 5.30% 2.10% 4.67% 7.05% 6.66% SINGLE DISCOUNT RATE respectively The discount rate used to measure the total pension liability was 6.72% and 6.81%, for fiscal years 2019 and 2018, For fiscal year 2019, a Single Discount Rate of 6.72% was used to measure the total pension liability.
This Single Discount Rate was based on an expected rate of return on pension plan investments of 7.00%, cash flows (employee contributions, employer contributions, benefits and administrative expenses) based on the results of the funding actuarial valuation using an expected rate of return on pension plan investments of 7.00%, and a municipal bond rate of 3.13% as reported in Fidelity Index’s "20-Year Municipal GO AA Index" as of June 28, 2019.
The projection of cash flows used to determine this Single Discount Rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to statutory contribution rates under the Fund's funding policy.

Based on these assumptions, the pension plan's fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2077.
As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2077, and the municipal bond rate was applied to all benefit payments after that date.

For fiscal year 2018, a Single Discount Rate of 6.81% was used to measure the total pension liability.
This Single Discount Rate was based on an expected rate of return on pension plan investments of 7.00%, cash flows (employee contributions, employer contributions, benefits and administrative expenses) based on the results of the funding actuarial valuation using an expected rate of return on pension plan investments of 7.00%, and a municipal bond rate of 3.62% as reported in Fidelity Index’s "20-Year Municipal GO AA Index" as of June 29, 2018.
The projection of cash flows used to determine this Single Discount Rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to statutory contribution rates under the Fund's funding policy.

Based on these assumptions, the pension plan's fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2077.
As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2077, and the municipal bond rate was applied to all benefit payments after that date.

The impact of the change in the Single Discount Rate from 6.81% to 6.72% was an increase in the total pension liability of approximately $260 million.

The change in the discount rate was driven by the changes in municipal bond rate from 3.62% to 3.13%.
SENSITIVITY OF THE NET PENSION LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the net pension liability as of June 30, 2019 and 2018, calculated using a Single Discount Rate of 6.72% for fiscal year 2019 and 6.81% for fiscal year 2018.
The table below also presents what the net pension liability would be if it were calculated using a Single Discount Rate for fiscal years 2019 and 2018 that is one percentage point lower (5.72% for 2019 and 5.81% for 2018) or one percentage point higher (7.72% for 2019 and 7.81% for 2018) than the current rate: Net Pension Liability 1% Decrease (5.72%) Current Discount Rate (6.72%) 1% Increase (7.72%) June 30, 2019 $17,352,786,147 $14,127,341,870 $11,465,802,657 Net Pension Liability 1% Decrease (5.81%) Current Discount Rate (6.81%) 1% Increase (7.81%) June 30, 2018 $16,585,702,417 $13,442,717,359 $10,849,573,702 As of June 30, 2019 and 2018, the Fund was not required to maintain any legally required reserves.
46 | Financial | SINGLE DISCOUNT RATE The discount rate used to measure the total pension liability was 6.72% and 6.81%, for fiscal years 2019 and 2018, respectively For fiscal year 2019, a Single Discount Rate of 6.72% was used to measure the total pension liability.
This Single Discount Rate was based on an expected rate of return on pension plan investments of 7.00%, cash flows (employee contributions, employer contributions, benefits and administrative expenses) based on the results of the funding actuarial valuation using an expected rate of return on pension plan investments of 7.00%, and a municipal bond rate of 3.13% as reported in Fidelity Index’s "20-Year Municipal GO AA Index" as of June 28, 2019.
The projection of cash flows used to determine this Single Discount Rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to statutory contribution rates under the Fund's funding policy.

Based on these assumptions, the pension plan's fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2077.
As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2077, and the municipal bond rate was applied to all benefit payments after that date.

For fiscal year 2018, a Single Discount Rate of 6.81% was used to measure the total pension liability.
This Single Discount Rate was based on an expected rate of return on pension plan investments of 7.00%, cash flows (employee contributions, employer contributions, benefits and administrative expenses) based on the results of the funding actuarial valuation using an expected rate of return on pension plan investments of 7.00%, and a municipal bond rate of 3.62% as reported in Fidelity Index’s "20-Year Municipal GO AA Index" as of June 29, 2018.
The projection of cash flows used to determine this Single Discount Rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to statutory contribution rates under the Fund's funding policy.

Based on these assumptions, the pension plan's fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2077.
As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2077, and the municipal bond rate was applied to all benefit payments after that date.

The impact of the change in the Single Discount Rate from 6.81% to 6.72% was an increase in the total pension liability of approximately $260 million.

The change in the discount rate was driven by the changes in municipal bond rate from 3.62% to 3.13%.
SENSITIVITY OF THE NET PENSION LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the net pension liability as of June 30, 2019 and 2018, calculated using a Single Discount Rate of 6.72% for fiscal year 2019 and 6.81% for fiscal year 2018.
The table below also presents what the net pension liability would be if it were calculated using a Single Discount Rate for fiscal years 2019 and 2018 that is one percentage point lower (5.72% for 2019 and 5.81% for 2018) or one percentage point higher (7.72% for 2019 and 7.81% for 2018) than the current rate: Net Pension Liability 1% Decrease (5.72%) Current Discount Rate (6.72%) 1% Increase (7.72%) June 30, 2019 $17,352,786,147 $14,127,341,870 $11,465,802,657 Net Pension Liability 1% Decrease (5.81%) Current Discount Rate (6.81%) 1% Increase (7.81%) June 30, 2018 $16,585,702,417 $13,442,717,359 $10,849,573,702 As of June 30, 2019 and 2018, the Fund was not required to maintain any legally required reserves.
| Financial | 47 (9) FAIR VALUE MEASUREMENT The Fund categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.

The hierarchy is based on the valuation inputs used to measure the fair value of the assets.

Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
The Fund has the following recurring fair value measurements as of June 30, 2019: Investments by Fair Value Level June 30, 2019 Investments Measured at the Net Asset Value Fair Value Measurement Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments Not Measured At Fair Value Investments by Fair Value Level June 30, 2019 Fair Value Measurement Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments Not Measured At Fair Value Commercial Paper $ 1,580,874 $ 1,580,874 $ — $ — $ Currency Equity 8,222,429 — 360,521 — 7,861,908 Total Commingled $ 727,136,131 (NAV) Commingled Equity Fixed Income Infrastructure Real Estate Infrastructure Private Equity Real Estate $ 70,021,543 37,173,323 92,237,539 527,703,726 118,712,966 379,931,583 192,114,105 Commingled Funds 284,727,627 284,727,627 5,986,409,659 5,986,409,659 — — — — 24,092,842 18,476,478 5,616,364 $ 6,295,230,128 $ 6,289,613,764 $ 5,616,364 $ — $ 991,678,773 73,751,932 — 991,678,773 690,030 Government Bonds 869,251,233 771,011,107 Index Linked Gov't Bonds 28,730,542 24,634,864 510,396,316 17,199,944 — — 73,061,902 98,240,126 4,095,678 510,396,316 17,199,944 — — — — — — $ 2,491,008,740 $ 796,336,001 $ 1,694,672,739 $ — $ (628,247) (628,247) — (4,996,484) — (4,996,484) 176,458 176,458 — $ (5,448,273) $ (451,789) $ (4,996,484) $ 157,753,245 157,753,245 — — — — — $ — $ 8,938,543,840 $ 7,244,832,095 $ 1,695,653,140 $ — $ 7,861,908 Not Applicable* $ 560,663,605 Common Stock Preferred Stock Total Equity Fixed income Corporate Bonds Government Agency Bonds Mortgage Backed Securities Municipal Bonds Total Fixed Income Investment Derivative Instruments Options Swaps Rights and Warrants Total Derivatives Real State Investment Trust - REIT Total Investments by Fair Value Level Collateral from Securities Lending — — — — — — — — — — — — — — — — Total Investments by Net
 Asset Value $ 1,417,894,785 Total Investments $ 10,917,102,230 * Consists of cash, interest income, and tri-party repos, which are not subject to leveling.
INVESTMENTS AT FAIR VALUE Commercial paper, equity, and fixed income securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets issued by pricing vendors.

Commercial paper, currency, equity, and fixed income securities classified in Level 2 of the fair value hierarchy are valued using matrix pricing techniques maintained by the various pricing vendors.
Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

Equity and fixed income securities classified in Level 3 are securities whose stated market price is unobservable by the market place.

Many of these securities are priced by the issuers of industry groups.

Fair value is defined as the quoted market value on the last trading day of the period.

These prices are obtained from various pricing sources by the Funds custodian bank.
Real Estate Investment Trusts (REITs) and rights and warrants securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets issued by pricing vendors.

Short-term investments, consisting of commingled fund cash equivalents in the Bank of New York Mellon's EB Temporary Investment Fund, are not subject to fair value leveling and have been excluded from this table.
As of June 30, 2019 and 2018, short-term investment holdings were $349,669,849 and $315,908,559, respectively.
48 | Financial | Fair Value Measurement Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments Not Measured At Fair Value Investments by Fair Value Level June 30, 2019 Investments Measured at the Net Asset Value (NAV) Commingled Equity Fixed Income Infrastructure Real Estate $ 70,021,543 37,173,323 92,237,539 527,703,726 Total Commingled $ 727,136,131 Infrastructure Private Equity Real Estate 118,712,966 379,931,583 192,114,105 Total Investments by Net Asset Value $ 1,417,894,785 Total Investments $ 10,917,102,230 * Consists of cash, interest income, and tri-party repos, which are not subject to leveling.
INVESTMENTS AT FAIR VALUE Commercial paper, equity, and fixed income securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets issued by pricing vendors.

Commercial paper, currency, equity, and fixed income securities classified in Level 2 of the fair value hierarchy are valued using matrix pricing techniques maintained by the various pricing vendors.
Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

Equity and fixed income securities classified in Level 3 are securities whose stated market price is unobservable by the market place.

Many of these securities are priced by the issuers of industry groups.

Fair value is defined as the quoted market value on the last trading day of the period.

These prices are obtained from various pricing sources by the Funds custodian bank.
Real Estate Investment Trusts (REITs) and rights and warrants securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets issued by pricing vendors.

Short-term investments, consisting of commingled fund cash equivalents in the Bank of New York Mellon's EB Temporary Investment Fund, are not subject to fair value leveling and have been excluded from this table.
As of June 30, 2019 and 2018, short-term investment holdings were $349,669,849 and $315,908,559, respectively.

| Financial | 49 INVESTMENTS AT NET ASSET VALUE | AS OF JUNE 30, 2019 FAIR VALUE MEASUREMENT | AS OF JUNE 30, 2018 The Fund holds shares of interests in investment companies where the fair value of the investments are measured on a recurring basis using net asset value per share.
At the year ended June 30, 2019, the fair value, unfunded commitments, and redemption values of those investments is as follows: Investments Measured at Net Asset Value (NAV) Fair Value Unfunded Commitments Redemption Frequency (If Currently Eligible) Redemption Notice Period Commingled Equity Fixed Income Infrastructure Real Estate $ 70,021,543 $ 37,173,323 92,237,539 527,703,726 — — — — N/A N/A N/A N/A Total Commingled $ 727,136,131 Infrastructure Private Equity Real Estate 118,712,966 379,931,583 192,114,105 41,654,332 442,809,948 179,783,729 As Needed As Needed As Needed Total Investments by Net Asset Value $ 1,417,894,785 N/A N/A N/A N/A 7 - 10 days 7 - 10 days 7 - 10 days Commingled funds (equity, fixed income, infrastructure, and real estate), infrastructure, private equity, and real estate funds, as well as short-term bill and notes, are valued at net asset value and, unlike more traditional investments, generally do not have readily attainable market values and take the form of limited partnerships.
The Fund values these investments at fair value, on a recurring basis, based on the partnership’s audited financial statements.

If the June 30 statements are available, those values are used preferentially.

However, some partnerships have fiscal years ending at other than June 30.
If June 30 valuations are not available, the value is adjusted from the most recently available valuation, taking into account subsequent calls and distributions, adjustments for unrealized appreciation/deprecation, and other income and fees.

Short-term bills and notes are invested in BNY Mellon's EB Temporary Investment Fund which consists primarily of instruments issued by the U.S. Government, Federal agencies, sponsored agencies or corporations, and/or various credit instruments.
The maximum average maturity for the EB Temporary Investment Fund will be 60 days and the maximum weighted average life will be 120 days.

The Fund’s investment strategy is to meet or exceed its performance objectives within CTPF’s tolerance for risk.

It invests in diversified strategies through various vehicles so that no single strategy dictates performance, thereby lowering the volatility of the portfolio.
Fixed income investments are diverse and add value across interest rate duration, sector allocation, country and currency strategies.

Adequate diversification among fixed income classes is maintained.

All infrastructure investments are currently within a fund structure and adhere to the partnership agreement.

The overall financial objective of the Fund's infrastructure portfolios is to meet the performance standard on a net of fee basis over longer time periods.
Private equity investments are made primarily through closed-end private equity funds.

Adequate diversification by private equity subclass (venture capital, buyout, mezzanine, distressed debt, special situation, and non-U.S.) is maintained.

Private real estate investments are made through both closed-end and open- ended real estate funds.

Adequate diversification by real estate subtypes (core, non-core/enhanced return, non- core/high return) is maintained.
50 | Financial | For comparative purposes, the following table presents the recurring fair value measurements as of June 30, 2018: Investments by Fair Value Level June 30, 2018 Fair Value Measurement Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments Not Measured At Fair Value Commercial Paper $ 50,743,847 $ 16,962,767 $ 33,781,080 $ — $ 13,333,730 — 133,341 13,200,389 Currency Equity Commingled Funds Common Stock Preferred Stock Fixed Income Corporate Bonds 312,106,432 6,048,764,433 20,344,044 312,106,432 6,048,763,223 — — 15,726,145 4,617,899 1,210 Total Equity $ 6,381,214,909 $ 6,376,595,800 $ 4,617,899 $ 1,210 $ 937,895,912 — 937,895,912 Government Agency Bonds 66,696,387 678,240 66,018,147 Government Bonds 840,817,959 783,567,108 57,250,851 Index Linked Gov't Bonds 26,110,491 20,453,905 5,656,586 Mortgage Backed Securities 472,425,107 Municipal Bonds 17,424,754 — — 472,425,107 17,424,754 Total Fixed Income $ 2,361,370,610 $ 804,699,253 $ 1,556,671,357 $ — $ (20,005) (1,704,289) 370,873 (20,005) 370,848 — (1,704,289) — 25 — Total Derivatives $ (1,353,421) $ 350,843 $ (1,704,264) $ — $ 144,771,014 144,771,014 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ 8,950,080,689 $ 7,343,379,677 $ 1,593,499,413 $ 1,210 $ 13,200,389 Investment Derivative Instruments Options Swaps Rights and Warrants Real State Investment Trust - REIT Total Investments by Fair Value Level Collateral from Securities Lending Investments Measured at the Net Asset Value (NAV) Commingled Equity Fixed Income Infrastructure Real Estate Infrastructure Private Equity Real Estate Not Applicable* $ 947,417,427 $ 63,614,322 58,574,289 98,529,258 589,294,692 128,834,783 300,228,413 157,226,915 Total Commingled $ 810,012,561 Total Investments by Net Asset Value $ 1,396,302,672 Total Investments $ 11,293,800,788 * Consists of cash, interest income, and tri-party repos, which are not subject to leveling.
FAIR VALUE MEASUREMENT | AS OF JUNE 30, 2018 For comparative purposes, the following table presents the recurring fair value measurements as of June 30, 2018: Investments by Fair Value Level June 30, 2018 Fair Value Measurement Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments Not Measured At Fair Value Commercial Paper $ 50,743,847 $ 16,962,767 $ 33,781,080 $ — $ — Currency Equity Commingled Funds Common Stock Preferred Stock 13,333,730 — 133,341 312,106,432 6,048,764,433 20,344,044 312,106,432 6,048,763,223 — — 15,726,145 4,617,899 — — 1,210 — Total Equity $ 6,381,214,909 $ 6,376,595,800 $ 4,617,899 $ 1,210 $ Fixed Income Corporate Bonds 937,895,912 — 937,895,912 Government Agency Bonds 66,696,387 678,240 66,018,147 Government Bonds 840,817,959 783,567,108 57,250,851 Index Linked Gov't Bonds 26,110,491 20,453,905 5,656,586 Mortgage Backed Securities 472,425,107 Municipal Bonds 17,424,754 — — 472,425,107 17,424,754 — — — — — — Total Fixed Income $ 2,361,370,610 $ 804,699,253 $ 1,556,671,357 $ — $ Investment Derivative Instruments Options Swaps Rights and Warrants (20,005) (1,704,289) 370,873 (20,005) — — (1,704,289) 370,848 25 Total Derivatives $ (1,353,421) $ 350,843 $ (1,704,264) $ 144,771,014 144,771,014 — — — — — $ — 13,200,389 — — — — — — — — — — — — — — — — Real State Investment Trust - REIT Total Investments by Fair Value Level Collateral from Securities Lending Investments Measured at the Net Asset Value (NAV) Commingled Equity Fixed Income Infrastructure Real Estate $ 8,950,080,689 $ 7,343,379,677 $ 1,593,499,413 $ 1,210 $ 13,200,389 Not Applicable* $ 947,417,427 $ 63,614,322 58,574,289 98,529,258 589,294,692 Total Commingled $ 810,012,561 Infrastructure Private Equity Real Estate 128,834,783 300,228,413 157,226,915 Total Investments by Net Asset Value $ 1,396,302,672 Total Investments $ 11,293,800,788 * Consists of cash, interest income, and tri-party repos, which are not subject to
 leveling.
| Financial | 51 INVESTMENTS AT NET ASSET VALUE | AS OF JUNE 30, 2018 The Fund holds shares of interests in investment companies where the fair values of investments are measured on a recurring basis using net asset value per share.
At the year ended June 30, 2018, the fair value, unfunded commitments, and redemption values of those investments is as follows: Investments Measured at Net Asset Value (NAV) Fair Value Unfunded Commitments Redemption Frequency (If Currently Eligible) Redemption Notice Period Commingled Equity Fixed Income Infrastructure Real Estate Total Commingled Infrastructure Private Equity Real Estate $ $ 63,614,322 $ 58,574,289 98,529,258 589,294,692 810,012,561 128,834,783 300,228,413 157,226,915 — — — — N/A N/A N/A N/A N/A N/A N/A N/A 34,051,289 As Needed 238,432,864 As Needed 151,930,521 As Needed 7 - 10 days 7 - 10 days 7 - 10 days Total Investments by Net Asset Value $ 1,396,302,672 Commingled funds (equity, fixed income, infrastructure, and real estate), infrastructure, private equity, and real estate funds, as well as short-term bills and notes, are valued at net asset value and, unlike more traditional investments, generally do not have readily attainable market values and take the form of limited partnerships.
The Fund values these investments at fair value, on a recurring basis, based on the partnership’s audited financial statements.

If the June 30 statements are available, those values are used preferentially.

However, some partnerships have fiscal years ending at other than June 30.
If June 30 valuations are not available, the value is adjusted from the most recently available valuation, taking into account subsequent calls and distributions, adjusted for unrealized appreciation/deprecation, and other income and fees.

Short-term bills and notes are invested in BNY Mellon's EB Temporary Investment Fund which consists primarily of instruments issued by the U.S. Government, Federal agencies, sponsored agencies or corporations, and/or various credit instruments.
The maximum average maturity for the EB Temporary Investment Fund will be 60 days and the maximum weighted average life will be 120 days.

The Fund’s investment strategy is to meet or exceed its performance objectives within CTPF’s tolerance for risk.

It invests in diversified strategies through various vehicles so that no single strategy dictates performance, thereby lowering the volatility of the portfolio.
Fixed income investments are diverse and add value across interest rate duration, sector allocation, country and currency strategies.

Adequate diversification among fixed income classes is maintained.

All infrastructure investments are currently within a fund structure and adhere to the partnership agreement.

The overall financial objective of the Fund's infrastructure portfolios is to meet the performance standard on a net of fee basis over longer time periods.
Private equity investments are made primarily through closed-end private equity funds.

Adequate diversification by private equity subclass (venture capital, buyout, mezzanine, distressed debt, special situation, and non-U.S.) is maintained.

Private real estate investments are made through both closed-end and open- ended real estate funds.

Adequate diversification by real estate subtypes (core, non-core/enhanced return, non- core/high return) is maintained.
DERIVATIVES Options, futures, and rights and warrants derivatives securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active market issued by pricing vendors.

Swaps, rights, and warrants derivative securities classified in Level 2 of the fair value hierarchy are valued using matrix pricing techniques maintained by the various pricing vendors.
52 | Financial | (10) INSURANCE COVERAGE The Fund is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The Fund has minimized the risk of loss through private insurance carriers with deductibles for coverage ranging up to $1,000 per occurrence.

The amount of settlements has not exceeded insurance coverage in any of the previous three fiscal years.
(11) LITIGATION There are several pending lawsuits in which the Fund is involved.

Management believes that the potential claims against the Fund would not materially affect the financial position of the Fund.

(12) OPERATING LEASES The Fund’s 203 N. LaSalle office lease provides that the lessee pay its proportionate share of the operating costs, plus a base rental amount.
Included in this lease were provisions for 32 monthly periods of “free rent.” In conformity with accounting requirements, the Fund will recognize the office rent expense on a straight-line basis over the 16-year lease term.

As an incentive, the lessor provided the Fund an allowance of $1,971,610 which was used for leasehold improvements, fixed asset purchases, or monthly rental payments.

Beginning in fiscal year 2016, the Fund expanded office space by 3,456 square feet.
The minimum future rental lease payments through June 30, 2020, are as follows: Year Ended June 30 Amount 2020 $ Total minimum future rental payments $ 683,335 683,335 The Fund relocated offices to 425 S. Financial Place in November 2019.

However the Fund still retains its lease at 203 N. LaSalle pending transfer to another entity in the near future.

The Fund continues to make lease payments for the 203 N. LaSalle location until February 2020.
Starting March 2020 the 425 S. Financial Place landlord is anticipated will reimburse CTPF by making payments to the 203 N. LaSalle landlord on CTPF's behalf.

Lease payments to the 425 S. Financial Place landlord will not commence to be paid by CTPF until June 2020.

The Fund’s office lease provides that the lessee pay basic rent, tenant proportionate share of taxes, additional rent, storage space rent and all other sums that tenant my owe to landlord or required under the lease.
Included in revised tenant lease for the relocation to 425 S. Financial Place, Chicago lease was a provision for a credit tenant leasehold improvements to the new location of $3,596,340.

In conformity with accounting requirements, the Fund will recognize the office rent expense on a straight-line basis over the 15-year lease term.
The minimum future rental lease payments through June 30, 2035, are as follows: Year Ended June 30 Amount 2020 2021 2022 2023 2024 2025 - 2029 2030 - 2034 2035 $ $ $ $ $ $ $ $ 59,010 725,951 744,092 762,551 781,647 4,108,418 4,648,187 1,000,609 Total minimum future rental payments $ 12,830,466 The total rent expense was $653,562 and $640,177 in fiscal years 2019 and 2018, respectively.
(10) INSURANCE COVERAGE The Fund is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The Fund has minimized the risk of loss through private insurance carriers with deductibles for coverage ranging up to $1,000 per occurrence.

The amount of settlements has not exceeded insurance coverage in any of the previous three fiscal years.
(11) LITIGATION There are several pending lawsuits in which the Fund is involved.

Management believes that the potential claims against the Fund would not materially affect the financial position of the Fund.

(12) OPERATING LEASES The Fund’s 203 N. LaSalle office lease provides that the lessee pay its proportionate share of the operating costs, plus a base rental amount.
Included in this lease were provisions for 32 monthly periods of “free rent.” In conformity with accounting requirements, the Fund will recognize the office rent expense on a straight-line basis over the 16-year lease term.

As an incentive, the lessor provided the Fund an allowance of $1,971,610 which was used for leasehold improvements, fixed asset purchases, or monthly rental payments.

Beginning in fiscal year 2016, the Fund expanded office space by 3,456 square feet.
The minimum future rental lease payments through June 30, 2020, are as follows: Year Ended June 30 2020 $ Total minimum future rental payments $ Amount 683,335 683,335 The Fund relocated offices to 425 S. Financial Place in November 2019.

However the Fund still retains its lease at 203 N. LaSalle pending transfer to another entity in the near future.

The Fund continues to make lease payments for the 203 N. LaSalle location until February 2020.
Starting March 2020 the 425 S. Financial Place landlord is anticipated will reimburse CTPF by making payments to the 203 N. LaSalle landlord on CTPF's behalf.

Lease payments to the 425 S. Financial Place landlord will not commence to be paid by CTPF until June 2020.

The Fund’s office lease provides that the lessee pay basic rent, tenant proportionate share of taxes, additional rent, storage space rent and all other sums that tenant my owe to landlord or required under the lease.
Included in revised tenant lease for the relocation to 425 S. Financial Place, Chicago lease was a provision for a credit tenant leasehold improvements to the new location of $3,596,340.

In conformity with accounting requirements, the Fund will recognize the office rent expense on a straight-line basis over the 15-year lease term.
The minimum future rental lease payments through June 30, 2035, are as follows: Year Ended June 30 2020 2021 2022 2023 2024 2025 - 2029 2030 - 2034 2035 Amount 59,010 725,951 744,092 762,551 781,647 4,108,418 4,648,187 1,000,609 $ $ $ $ $ $ $ $ Total minimum future rental payments $ 12,830,466 The total rent expense was $653,562 and $640,177 in fiscal years 2019 and 2018, respectively.
| Financial | 53 (13) SUBSEQUENT EVENTS Subsequent to year-end, the Fund’s investment portfolio has incurred a significant decline in fair value, consistent with the general decline in financial markets.

However, because the values of individual investments fluctuate with market conditions, and due to market volatility, the amount of losses that will be recognized in subsequent periods, if any, cannot be determined.
(14) FUTURE ACCOUNTING PRONOUNCEMENTS In June 2017, the Governmental Accounting Standards Board issued GASB Statement No.

87, Leases.

The objective of GASB Statement 87 (Statement) is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases.
This Statement increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.

It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset.
The provisions of this Statement will be effective for the Fund for the year ended June 30, 2021.

Management has not yet completed its assessment of this Statement; however, it is not expected to have a material effect on the overall financial statement presentation.
SCHEDULE 1 Total pension liability Service cost Interest Differences between expected and actual experience Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability- beginning Total pension liability- ending (a) Plan fiduciary net position Contributions - Employer and non-contributing entity Benefit payments, including refunds of employee contributions Net change in plan fiduciary net position Plan fiduciary net position - beginning Transfer of remaining OPEB assets** Plan fiduciary net position - ending (b) Employer's net pension liability - ending (a)-(b) REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF CHANGES IN EMPLOYER'S NET PENSION LIABILITY PENSION PLAN ____________________________________________________________________________________________ 2019 2018 2017 2016 2015 2014 $ 310,238,766 $ 303,910,267 $ 269,100,663 $ 325,992,943 $ 318,734,274 $ 332,188,481 1,631,986,193 1,609,052,853 1,603,833,232 1,576,876,771 1,547,663,416 1,509,307,860 (88,601,053) 54,943,524 48,391,475 (106,563,600) (138,512,940) (14,177,102) Changes of assumptions 260,688,932 870,265,669 1,554,506,801 — — — (1,495,616,382) (1,466,280,439) (1,424,938,184) (1,384,826,398) (1,331,567,406) (1,306,341,856) $ 618,696,456 $ 1,371,891,874 $ 2,050,893,987 $ 411,479,716 $ 396,317,344 $ 520,977,383 24,547,482,873 23,175,590,999 21,124,697,012 20,713,217,296 20,316,899,952 19,795,922,569 $25,166,179,329 $24,547,482,873 $23,175,590,999 $ 21,124,697,012 $ 20,713,217,296 $20,316,899,952 $ 808,570,000 * $ 784,402,000 * $ 746,840,000 * $ 700,070,000 $ 643,667,000 $ 585,416,141 Contributions - employee 190,565,220 183,679,205 187,538,787 191,882,430 191,233,298 187,846,065 Net investment income 513,576,400 896,704,544 1,233,003,939 (27,987,163) 381,688,430 1,685,079,840 (1,495,616,382) (1,466,280,439) (1,424,938,184) (1,384,826,398) (1,331,567,406) Net transfer for OPEB (59,089,369) * (66,867,696) * (49,000,701) * (66,104,598) — Administrative expense (25,621,894)
 (21,521,303) (13,781,343) (12,867,490) (11,705,562) (11,705,562) Other 1,687,970 1,475,276 214,119 1,463,050 943,946 943,946 (130) — $ (65,928,055) $ 311,591,587 $ 679,876,617 $ (598,370,169) $ (125,740,294) $ 2,447,580,300 11,104,765,514 10,793,173,927 10,113,297,310 10,689,954,320 10,815,694,614 10,815,694,614 — — — 21,713,159 — — $11,038,837,459 $11,104,765,514 $10,793,173,927 $ 10,113,297,310 $ 10,689,954,320 $13,263,274,914 $14,127,341,870 $13,442,717,359 $12,382,417,072 $ 11,011,399,702 $ 10,023,262,976 $ 7,053,625,038 The information above is required beginning fiscal year 2014.
Information for the next 4 years will be presented in future fiscal years.

* Prior to 2016, $65 million allocation by CTPF from the total pension contribution amount by CPS to pay OPEB was being treated as a direct OPEB contribution.

Beginning in 2016, that $65 million allocation is being displayed within this schedule first as a pension contribution and then as part of the subsequent transfer to OPEB.
** Prior to 2016, residual assets within the Health Insurance Fund were treated as restricted solely to pay OPEB.

In 2016, a change was made with respect to treatment of residual assets within the Health Insurance Fund.
54 | Financial | REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF CHANGES IN EMPLOYER'S NET PENSION LIABILITY PENSION PLAN ____________________________________________________________________________________________ SCHEDULE 1 Total pension liability Service cost Interest Differences between expected and actual experience 2019 2018 2017 2016 2015 2014 $ 310,238,766 $ 303,910,267 $ 269,100,663 $ 325,992,943 $ 318,734,274 $ 332,188,481 1,631,986,193 1,609,052,853 1,603,833,232 1,576,876,771 1,547,663,416 1,509,307,860 (88,601,053) 54,943,524 48,391,475 (106,563,600) (138,512,940) (14,177,102) Changes of assumptions 260,688,932 870,265,669 1,554,506,801 — — — Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability- beginning Total pension liability- ending (a) Plan fiduciary net position Contributions - Employer and non-contributing entity (1,495,616,382) (1,466,280,439) (1,424,938,184) (1,384,826,398) (1,331,567,406) (1,306,341,856) $ 618,696,456 $ 1,371,891,874 $ 2,050,893,987 $ 411,479,716 $ 396,317,344 $ 520,977,383 24,547,482,873 23,175,590,999 21,124,697,012 20,713,217,296 20,316,899,952 19,795,922,569 $25,166,179,329 $24,547,482,873 $23,175,590,999 $ 21,124,697,012 $ 20,713,217,296 $20,316,899,952 $ 808,570,000 * $ 784,402,000 * $ 746,840,000 * $ 700,070,000 $ 643,667,000 $ 585,416,141 Contributions - employee 190,565,220 183,679,205 187,538,787 191,882,430 191,233,298 187,846,065 Net investment income 513,576,400 896,704,544 1,233,003,939 (27,987,163) 381,688,430 1,685,079,840 Benefit payments, including refunds of employee contributions (1,495,616,382) (1,466,280,439) (1,424,938,184) (1,384,826,398) (1,331,567,406) Net transfer for OPEB (59,089,369) * (66,867,696) * (49,000,701) * (66,104,598) — (130) — Administrative expense (25,621,894) (21,521,303) (13,781,343) (12,867,490) (11,705,562) (11,705,562) Other 1,687,970 1,475,276 214,119 1,463,050 943,946 943,946 Net change in plan fiduciary net position Plan fiduciary net position
 - beginning Transfer of remaining OPEB assets** Plan fiduciary net position - ending (b) Employer's net pension liability - ending (a)-(b) $ (65,928,055) $ 311,591,587 $ 679,876,617 $ (598,370,169) $ (125,740,294) $ 2,447,580,300 11,104,765,514 10,793,173,927 10,113,297,310 10,689,954,320 10,815,694,614 10,815,694,614 — — — 21,713,159 — — $11,038,837,459 $11,104,765,514 $10,793,173,927 $ 10,113,297,310 $ 10,689,954,320 $13,263,274,914 $14,127,341,870 $13,442,717,359 $12,382,417,072 $ 11,011,399,702 $ 10,023,262,976 $ 7,053,625,038 The information above is required beginning fiscal year 2014.
Information for the next 4 years will be presented in future fiscal years.

* Prior to 2016, $65 million allocation by CTPF from the total pension contribution amount by CPS to pay OPEB was being treated as a direct OPEB contribution.

Beginning in 2016, that $65 million allocation is being displayed within this schedule first as a pension contribution and then as part of the subsequent transfer to OPEB.
** Prior to 2016, residual assets within the Health Insurance Fund were treated as restricted solely to pay OPEB.

In 2016, a change was made with respect to treatment of residual assets within the Health Insurance Fund.
| Financial | 55 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF THE EMPLOYER'S NET PENSION LIABILITY PENSION PLAN _______________________________________________________________________________________________ SCHEDULE 2 2019 2018 2017 2016 2015 2014 $ 25,166,179,329 $ 24,547,482,872 $ 24,547,482,872 $ 23,175,590,999 $ 21,124,697,012 $ 20,713,217,296 $ 11,038,837,459 $ 11,104,765,514 $ 11,104,765,514 $ 10,793,173,927 $ 10,113,297,310 $ 10,689,954,320 $ 14,127,341,870 $ 13,442,717,358 $ 13,442,717,358 $ 12,382,417,072 $ 11,011,399,702 $ 10,023,262,976 43.86% 45.24% 45.24% 46.57% 47.87% 51.61% Total pension liability Plan fiduciary net position Employer's net pension liability Plan fiduciary net position as a percentage of the total pension liability Covered payroll $ 2,179,054,844 $ 2,094,830,446 $ 2,030,175,116 $ 2,281,268,890 $ 2,273,551,432 $ 2,233,280,995 Employer's net position liability as a percentage of covered payroll 648.32% 641.71% 662.15% 542.79% 484.33% 448.81% The information above is required beginning fiscal year 2014.
Information for the next 4 years will be presented in future fiscal years.
SCHEDULES OF THE EMPLOYER’S CONTRIBUTIONS PENSION PLAN ____________________________________________________________________________________________ SCHEDULE 3 Year Ended June 30 Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered Payroll Contribution as a Percentage of Covered Payroll 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $ 355,846,125 $ 290,759,950 $ 65,086,175 $ 2,107,934,080 430,091,545 510,101,466 585,444,539 719,781,746 728,488,520 749,796,517 754,764,093 855,752,559 1,032,170,031 133,140,994 138,729,011 142,654,000 597,319,141 643,667,000 296,950,551 2,090,131,858 371,372,455 2,224,903,121 442,790,539 2,239,347,051 122,462,605 2,233,280,995 84,821,520 2,273,551,432 700,070,000 * 49,726,517 2,281,268,890 745,386,000 * 784,402,000 * 808,570,000 * 9,378,093 2,030,175,116 71,350,559 2,094,830,446 223,600,031 2,179,054,844 13.79% 6.37% 6.24% 6.37% 26.75% 28.31% 30.69% 36.72% 37.44% 37.11% * Prior to 2016, $65 million allocation by CTPF from the total pension contribution amount by CPS to pay OPEB was being treated as a direct OPEB contribution.
In 2016, that $65 million allocation is being shown within this schedule first as a pension contribution and then as part of the subsequent transfer to OPEB.
56 | Financial | REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF EMPLOYER'S CONTRACTUALLY REQUIRED CONTRIBUTION PENSION PLAN __________________________________________________________________________________________ SCHEDULE 4 Year Ended June 30 Contractually Required Contribution Contribution in Relation to the Contractually Required Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $ $ 323,237,000 209,141,000 214,178,000 218,585,000 624,603,000 708,667,000 700,070,000 745,386,000 784,402,000 808,570,000 $ 290,759,950 133,140,994 138,729,011 142,654,000 597,319,141 643,667,000 700,070,000 745,386,000 * 784,402,000 808,570,000 32,477,050 76,000,006 75,448,989 75,931,000 27,283,859 65,000,000 — — — — $ 2,107,934,080 2,090,131,858 2,224,903,121 2,239,347,051 2,233,280,995 2,273,551,432 2,281,268,890 2,030,175,116 2,094,830,446 2,179,054,844 13.79% 6.37% 6.24% 6.37% 26.75% 28.31% 30.69% 36.72% 37.44% 37.11% * The fiscal year 2017 actual payment of $484,225,078 was received by June 30, 2017.
The remaining $261,160,922 consisted of receivables of $249,990,422 and $11,170,500 from the Board of Education and the State of Illinois, respectively.

The Board of Education's remaining contributions of $249,990,422 were received in August, 2017 due to the timing of payments received as a result of the property tax levy.

The State of Illinois satisfied the outstanding fiscal year 2017 receivable of $11,170,500 during fiscal year 2018.
SCHEDULE OF MONEY-WEIGHTED RATE OF RETURN PENSION PLAN ____________________________________________________________________________________________ SCHEDULE 5 Year Ended June 30 2014 2015 2016 2017 2018 2019 Annual Money-Weighted Rate of Return, Net of Investment Expense 18.01% 3.20% 0.20% 13.12% 8.93% 5.04% * The information above is required beginning fiscal year 2014.

Information for the next 4 years will be presented in future fiscal years.
| Financial | 57 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) ACTUARIAL METHODS AND ASSUMPTIONS PENSION PLAN Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported.

Contributions for fiscal years ended June 30, 2019 and 2018 were determined based on the actuarial valuations as of June 30, 2017 and 2016.

The most recent valuation is as of June 30, 2019.


The following table represents the actuarial methods and assumptions per the most recent funding valuations for the Pension Plan which are used to determine the actuarially determined contributions.
2019 2018 2017 2016 Pension Plan Pension Plan Pension Plan Pension Plan Valuation Date June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 Contribution determined for Fiscal Year 2021 Fiscal Year 2020 Fiscal Year 2019 Fiscal Year 2018 Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit Projected Unit Credit Amortization method Level percent of payroll Level percent of payroll Level percent of payroll Level percent of payroll Amortization approach Closed Closed Closed Closed Amortization period 30 years (25 years remaining) 30 years (25 years remaining) 30 years (26 years remaining) 30 years (27 years remaining) Asset valuation method 4-year smoothed market 4-year smoothed market 4-year smoothed market 4-year smoothed market Actuarial assumptions: Investment rate of return Projected salary increases 7.00%, net of investment expense 3.00% to 12.85%, varying by age 7.00%, net of investment expense 3.00% to 12.85%, varying by age 7.25%, net of investment expense 4.00% to 15.50%, varying by age 7.75%, net of investment expense 4.25% to 15.75%, varying by age Inflation rate General inflation, 2.50% Wage inflation, 3.00% General inflation, 2.50% Wage inflation, 3.00% General inflation, 2.50% Wage inflation, 3.25% General inflation, 2.75% Wage inflation, 3.50% Post-retirement benefit increase Post-retirement benefit increase 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 & Later 3% compound (Tier I); lesser of CPI-U or 3% simple (Tier II) 3% compound (Tier I); lesser of CPI-U or 3% simple (Tier II) 3% compound (Tier I); lesser of CPI-U or 3% simple (Tier II) 3% compound (Tier I); lesser of CPI-U or 3% simple (Tier II) 58 | Financial | The following assumption changes were implemented during the fiscal year ended June 30, 2019: Changes in assumptions for fiscal year 2019 resulted from the following: The discount rate used as of June 30, 2019 was decreased to 6.72% from 6.81%.
The decrease in the single discount rate, as of June 30, 2019, was due to the decrease in the long-term municipal bond rate from 3.62% to 3.13%.

The decrease in the single discount rate as of June 30, 2019 resulted in an increase in the total pension liability of approximately $260 million.

Changes in assumptions for fiscal year 2018 resulted from the following: The discount rate used as of June 30, 2018 was decreased to 6.81% from 7.07%.
Changes in Assumptions: As of June 30, 2017, healthy participant mortality rates were based on the RP-2000 Healthy Mortality Table for Males or Females, as appropriate, set back 2 years and adjusted for mortality improvements generationally from 2004 based on Scale AA.

For disabled participants, mortality rates were based on the RP-2000 Disabled Mortality Table, set back 3 years.
These tables were updated and, as of June 30, 2018, mortality rates were based on the RP-2014 White Collar Healthy Annuitant mortality table, sex distinct, for healthy participants and the RP-2014 Disabled Annuitant mortality table, sex distinct, for disabled participants.

Changes in assumptions for fiscal year 2017 resulted from a change in the discount rate assumption.

The discount rate used to calculate the total pension liability as of June 30, 2017 was 7.07%.
The rate decreased from 7.75% as of June 30, 2016.
| Financial | 59 OTHER SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF ADMINISTRATIVE AND MISCELLANEOUS EXPENSES FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ SCHEDULE 6 Depreciation Disaster Recovery Education and Training Equipment Memberships and Subscriptions Personnel Bad Debt Professional Services Property Supplemental Supplies Utilities Miscellaneous Total 2019 2018 $ 693,952 $ 99,349 189,790 250,186 38,613 10,651,451 9,418,703 3,364,759 1,112,494 124,962 72,677 70,614 12,180 184,133 64,540 206,312 247,307 35,617 9,800,127 6,987,600 3,227,178 1,100,830 18,825 83,752 67,196 31,927 $ 26,099,731 $ 22,055,344 SCHEDULE OF MANAGER FEES FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ SCHEDULE 7 Manager Fees Consultant Fees Banking and Foreign Exchange Fees Total See accompanying independent auditors’ report.
2019 2018 38,728,671 $ 37,195,885 1,575,850 193,658 1,461,997 145,573 40,498,179 $ 38,803,455 $ $ 60 | Financial | OTHER SUPPLEMENTARY INFORMATION (UNAUDITED) OTHER SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF ADMINISTRATIVE AND MISCELLANEOUS EXPENSES FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ SCHEDULE OF CONSULTANT PAYMENTS Memberships and Subscriptions SCHEDULE 6 Depreciation Disaster Recovery Education and Training Professional Services Equipment Personnel Bad Debt Property Supplemental Supplies Utilities Miscellaneous Total SCHEDULE 7 Manager Fees Consultant Fees Total Banking and Foreign Exchange Fees See accompanying independent auditors’ report.
2019 2018 $ 693,952 $ 99,349 189,790 250,186 38,613 10,651,451 9,418,703 3,364,759 1,112,494 124,962 72,677 70,614 12,180 184,133 64,540 206,312 247,307 35,617 9,800,127 6,987,600 3,227,178 1,100,830 18,825 83,752 67,196 31,927 $ 26,099,731 $ 22,055,344 2019 2018 38,728,671 $ 37,195,885 1,575,850 193,658 1,461,997 145,573 40,498,179 $ 38,803,455 $ $ SCHEDULE OF MANAGER FEES FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ SCHEDULE 8 Agile Progress, LLC Alper Services, LLC Baker & McKenzie, LLP Baker Tilly Virchow Krause, LLP Bogfire, Inc. Bradley Consulting Group, Inc. Callan Associates, Inc. CBIZ ComGraphics, Inc. Cohen Rosenson & Zuckerman, LLC Crowe LLP Data Consultants Corp. Election-America Election Service Corporation Emcor Services Team Mechanical Emerald Data Solutions, Inc. Foster Pepper, PLLC Gabriel, Roeder, Smith & Co. Goldstine, Skrodzki, Russian Governmental Consulting Solutions, Inc. Grant Thornton Imaging Office Systems, Inc. Impact Networking, LLC Jacobs, Burns Orlove & Hernandez Laner Muchin, LTD KPMG Limited Meltwater News US Inc. Michelle Holleman Miller LLC-ICE Mitchell & Titus, LLP North Shore Printers, Inc. Partners By Design Inc. Plante & Moran, PLLC Fuse Segal Company Sikich, LLP Solomon Cloud Solutions Steptoe & Johnson, LLP Sword & Shield Enterprise Security Vision Mai, LLC Zhan Governmental Solutions LLC Total See accompanying independent auditor's report.
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 2019 Category 2018 — — — 59,380 — 354,206 — 25,686 210,926 31,500 34,452 — 4,750 137,238 4,454 20,000 431,410 120,888 15,015 — 79,281 42,631 90,879 525,931 — 3,455 10,000 62,020 92,988 — 53,207 69,348 248,220 44,022 66,616 7,680 6,660 8,119 53,350 81,000 65,000 $ Audit IT 16,000 11,100 9,711 — — 339,795 630,000 Category IT Operations Legal Operations IT Investment Operations Operations Legal Services IT Legislative Consulting Operations IT Operations Legal Actuary Legal Audit IT IT Legal Operations Operations Operations Investment Consultants Operations Operations Audit Operations Operations Operations Operations Legal Services IT Lobbyist Lobbyist 178,075 Operations 17,000 IT 44,635 Operations 487,410 152,654 45,000 354,330 14,678 27,469 405,833 39,092 — Legal Actuary Lobbyist Audit IT IT Legal Legal Operations 34,385 Operations — 71,164 Audit Operations 184,375 156,465 112,008 28,097 6,755 55,070 77,632 Audit Operations Operations Operations Legal IT Lobbyist 3,060,312 $ 3,498,733 | Financial | 61 INVESTMENTS This section includes a synopsis of the Fund’s investment authority, summary tables of investment data, and a digest of the current year’s investment activity and performance.
62 62 | Investments | August 26, 2019 To the Board of Trustees and the Executive Director, Asset Servicing Michael J. Beggy Vice President Asset Servicing Michael J. Beggy Vice President August 26, 2019 BNY Mellon as custodian of the assets of The Public School Teachers’ Pension and Retirement Fund of Chicago (the “client”) has agreed to perform certain obligations under the Master Custody Agreement dated November 25, 2014.
In order to perform its obligations, BNY Mellon has established an “Account” which holds client property in safekeeping of To the Board of Trustees and the Executive Director, the Custodian (or other custodian banks or clearing operations).

BNY Mellon has provided recordkeeping of certain property of the client and completed the annual accounting certification for the year July 1, 2018 through June 30, 2019.
BNY Mellon as custodian of the assets of The Public School Teachers’ Pension and Retirement Fund of Chicago (the “client”) has agreed to perform certain obligations under the Master Custody Agreement dated November 25, 2014.
In In addition, in accordance with the terms of the Master Custody Agreement, BNY Mellon also provides the following order to perform its obligations, BNY Mellon has established an “Account” which holds client property in safekeeping of services as Custodian (the terms of Master Custody Agreement dictate which services require a specific direction from the Custodian (or other custodian banks or clearing operations).
BNY Mellon has provided recordkeeping of certain Authorized Person of the client prior to the provision of such service): property of the client and completed the annual accounting certification for the year July 1, 2018 through June 30, 2019.

August 26, 2019 Michael J. Beggy Vice President Asset Servicing  Hold any Securities in registered form in the name of the Custodian or one of its nominees.
In addition, in accordance with the terms of the Master Custody Agreement, BNY Mellon also provides the following  Settle purchases and sales of Securities and process other transactions, including free receipts and deliveries.
services as Custodian (the terms of Master Custody Agreement dictate which services require a specific direction from To the Board of Trustees and the Executive Director,  Take actions necessary to settle transactions in connection with futures or options contracts, short selling Authorized Person of the client prior to the provision of such service): programs, foreign exchange or foreign exchange contracts, swaps and other derivative investments.
BNY Mellon as custodian of the assets of The Public School Teachers’ Pension and Retirement Fund of Chicago (the  Deliver Securities in the Account if an Authorized Person advises the Custodian that the Board has entered into a  Hold any Securities in registered form in the name of the Custodian or one of its nominees.

“client”) has agreed to perform certain obligations under the Master Custody Agreement dated November 25, 2014.
In separate securities lending agreement, provided that the Board executes the agreements as Custodian may require.

 Settle purchases and sales of Securities and process other transactions, including free receipts and deliveries.
order to perform its obligations, BNY Mellon has established an “Account” which holds client property in safekeeping of  Invest available cash in any collective investment fund selected by the Board or deposit available cash in interest  Take actions necessary to settle transactions in connection with futures or options contracts, short selling the Custodian (or other custodian banks or clearing operations).
BNY Mellon has provided recordkeeping of certain bearing accounts in the banking department of the Custodian or an affiliated banking organization.

programs, foreign exchange or foreign exchange contracts, swaps and other derivative investments.

property of the client and completed the annual accounting certification for the year July 1, 2018 through June 30, 2019.

 Utilize Subcustodians and Depositories in connection with its performance of the Agreement.
 Deliver Securities in the Account if an Authorized Person advises the Custodian that the Board has entered into a  Receive and collect income and other payments due to the Account.

separate securities lending agreement, provided that the Board executes the agreements as Custodian may require.

In addition, in accordance with the terms of the Master Custody Agreement, BNY Mellon also provides the following  Make distributions or transfers out of an Account pursuant to Authorized Instructions.
 Invest available cash in any collective investment fund selected by the Board or deposit available cash in interest services as Custodian (the terms of Master Custody Agreement dictate which services require a specific direction from  Carry out any exchanges of Securities or other corporate actions not requiring discretionary decisions.

bearing accounts in the banking department of the Custodian or an affiliated banking organization.
Authorized Person of the client prior to the provision of such service):  Credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest,  Utilize Subcustodians and Depositories in connection with its performance of the Agreement.

 Hold any Securities in registered form in the name of the Custodian or one of its nominees.

 Receive and collect income and other payments due to the Account.
 Facilitate access by the Board or its designee to ballots or online systems to assist in the voting of proxies received  Settle purchases and sales of Securities and process other transactions, including free receipts and deliveries.

 Make distributions or transfers out of an Account pursuant to Authorized Instructions.
 Take actions necessary to settle transactions in connection with futures or options contracts, short selling  Carry out any exchanges of Securities or other corporate actions not requiring discretionary decisions.

 Report the value of the Account as agreed upon by the client and custodian.

programs, foreign exchange or foreign exchange contracts, swaps and other derivative investments.
 Credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest,  Deliver Securities in the Account if an Authorized Person advises the Custodian that the Board has entered into a dividends or other distributions payable on Securities.

separate securities lending agreement, provided that the Board executes the agreements as Custodian may require.
 Facilitate access by the Board or its designee to ballots or online systems to assist in the voting of proxies received Sincerely,  Invest available cash in any collective investment fund selected by the Board or deposit available cash in interest for eligible positions of Securities held in the Account.

bearing accounts in the banking department of the Custodian or an affiliated banking organization.

 Report the value of the Account as agreed upon by the client and custodian.
 Utilize Subcustodians and Depositories in connection with its performance of the Agreement.

 Receive and collect income and other payments due to the Account.

 Make distributions or transfers out of an Account pursuant to Authorized Instructions.

 Carry out any exchanges of Securities or other corporate actions not requiring discretionary decisions.
 Credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, for eligible positions of Securities held in the Account.

dividends or other distributions payable on Securities.

Sincerely, Michael J. Beggy Service Director dividends or other distributions payable on Securities.
 Facilitate access by the Board or its designee to ballots or online systems to assist in the voting of proxies received Michael J. Beggy Service Director for eligible positions of Securities held in the Account.

 Report the value of the Account as agreed upon by the client and custodian.
Asset Servicing Room 410 ~ One Mellon Center ~ Pittsburgh, PA 15258-0001 Sincerely, Michael J. Beggy Service Director The Bank of New York Mellon Asset Servicing Room 410 ~ One Mellon Center ~ Pittsburgh, PA 15258-0001 The Bank of New York Mellon Asset Servicing Room 410 ~ One Mellon Center ~ Pittsburgh, PA 15258-0001 The Bank of New York Mellon | Investments | 63 Callan Associates Inc. 120 North LaSalle Street Callan Associates Inc. Suite 2400 120 North LaSalle Street Chicago, IL 60602 Suite 2400 Chicago, IL 60602 Public School Teachers’ Pension and Retirement Fund of Chicago August 20, 2019 3 Main 312.346.3536 Fax 312.346.1356 Main 312.346.3536 Fax 312.346.1356 Fund’s ongoing efforts to enhance investment and its continued due diligence activities.
Callan is working www.callan.com www.callan.com on the continued enhancement of the Fund’s investment strategy.

August 20th, 2019 August 20th, 2019 All performance returns for the Public School Teachers’ Pension & Retirement Fund of Chicago presented in this report have been calculated by Callan LLC using a time weighted rate of return calculation for accounts with daily pricing and using a modified BAI calculation for accounts without daily Board of Trustees Board of Trustees pricing.
Chicago Teachers’ Pension Fund Chicago Teachers’ Pension Fund 203 North LaSalle, Suite 2600 203 North LaSalle, Suite 2600 Chicago, IL 60601-1210 Chicago, IL 60601-1210 Sincerely, Dear Trustees: Dear Trustees: Callan LLC is pleased to present the Chicago Teachers’ Pension Fund (“Fund”) results for fiscal year Callan LLC is pleased to present the Chicago Teachers’ Pension Fund (“Fund”) results for fiscal year ended June 30, 2019.
During the fiscal year ended June 30, 2019, markets continued their positive ended June 30, 2019.

During the fiscal year ended June 30, 2019, markets continued their positive performance with many asset classes showing positive returns.

Domestic equities continued positive performance with many asset classes showing positive returns.
Domestic equities continued positive Brianne Weymouth, CAIA Angel Haddad performance, with the broad market returning 9.0%, with large capitalization companies leading versus performance, with the broad market returning 9.0%, with large capitalization companies leading versus smaller companies.

Growth sectors continued to fuel performance at the expense of value sectors.

smaller companies.

Growth sectors continued to fuel performance at the expense of value sectors.
International markets underperformed domestic markets with a return of 1.3% due to changing International markets underperformed domestic markets with a return of 1.3% due to changing fundamentals overseas as well as the stronger dollar.

Emerging markets performed in-line with fundamentals overseas as well as the stronger dollar.

Emerging markets performed in-line with developing markets.

Domestic fixed income ended the fiscal year strongly positive, up 7.9%.

Real estate developing markets.


Domestic fixed income ended the fiscal year strongly positive, up 7.9%.

Real estate and infrastructure continued to add appreciation and stable income to investors as well.

and infrastructure continued to add appreciation and stable income to investors as well.
As of June 30, 2019, the Fund’s market value totaled $10.7 billion, a decrease from assets as of June 30, As of June 30, 2019, the Fund’s market value totaled $10.7 billion, a decrease from assets as of June 30, 2018.

During the past twelve month period: 2018.

During the past twelve month period: • Domestic equity markets advanced over the trailing 12 months.

The Russell 3000 Index, an • Domestic equity markets advanced over the trailing 12 months.
The Russell 3000 Index, an index of domestic stocks covering all capitalizations, increased 9.0%.

index of domestic stocks covering all capitalizations, increased 9.0%.
• Developed international equity markets continued their gains from last year and increased 1.3% in the trailing 12 months, as measured by the MSCI World ex-USA (Europe, Australasia, Far • Developed international equity markets continued their gains from last year and increased 1.3% in the trailing 12 months, as measured by the MSCI World ex-USA (Europe, Australasia, Far East, North America) Index.

Similarly, emerging markets posted a gain of 1.6%, as measured by East, North America) Index.
Similarly, emerging markets posted a gain of 1.6%, as measured by the MSCI Emerging Markets Index.

the MSCI Emerging Markets Index.

• • • • The domestic fixed income market produced a return of 7.9% during the year, as measured by The domestic fixed income market produced a return of 7.9% during the year, as measured by the Bloomberg Aggregate Bond Index.

the Bloomberg Aggregate Bond Index.


Private real estate as measured by the NCREIF Fund Index Open End Diversified Core Equity Private real estate as measured by the NCREIF Fund Index Open End Diversified Core Equity 2 Public School Teachers’ Pension and Retirement Fund of Chicago August 20, 2019 returned 5.5% on a net of fees basis.

returned 5.5% on a net of fees basis.


Within this environment the Fund returned 5.3% net-of-fees (5.5% gross-of-fees) during the 12 month Within this environment the Fund returned 5.3% net-of-fees (5.5% gross-of-fees) during the 12 month period ended June 30, 2019, underperforming its benchmark by 1.1%.

Over the trailing three-year period period ended June 30, 2019, underperforming its benchmark by 1.1%.
Over the trailing three-year period the Fund underperformed its benchmark by 19 basis points net-of-fees with an annualized return of 9.0%, and by 2 basis points over the trailing five-year period with an annualized net-of-fee return of 6.1%.

Since inception, the Fund has returned 8.24% net-of-fees outperforming its benchmark by 25 basis points annually.

The Fund’s domestic equity managers gained 7.5% on a net-of fee basis during the fiscal year, underperforming the benchmark return of 9.0%.
The Fund’s international equity managers registered a positive return of 0.3% net-of-fees over the same period and outperformed the passive benchmark by 7 basis points.

The Fund’s active management in public equities detracted from performance for the Fund for the fiscal year ending June 30, 2019.

The fixed income composite returned 8.3% net-of-fees compared to the benchmark return of 7.9% over the trailing 12 months.
The Fund’s private real estate managers posted returns of 5.7% on a net of fee basis compared to the private real estate benchmark return of 5.5%.

During the fiscal year, the infrastructure portfolio gained 10.1% on a net of fee basis compared to the infrastructure benchmark of 14.3%.

Private equity 64 contributed 11.3% to the Fund over the trailing fiscal year.
| Investments | Manager changes over the past year are summarized below: New Manager Basis Investment Group Heitman Longpoint Long Wharf Astra Partners Farol Turning Rock Wellington Management Co. State Street Global Advisors IFM Infrastructure Partners DPI Partners Terminated Manager Fremont Realty Group Newport/DV Urban Asset Class Real Estate Real Estate Real Estate Real Estate Private Equity Private Equity Private Equity Fixed Income Fixed Income Infrastructure Private Equity Asset Class Real Estate Real Estate Inception Date July 2018 February 2019 September 2018 June 2019 October 2018 October 2018 October 2018 January 2019 April 2019 May 2019 May 2019 Termination Date December 2018 December 2018 The Public School Teachers’ Pension & Retirement Fund of Chicago maintains an appropriately diversified strategy, designed to maximize return with an acceptable risk level.
Callan supports the Public School Teachers’ Pension and Retirement Fund of Chicago August 20, 2019 2 the Fund underperformed its benchmark by 19 basis points net-of-fees with an annualized return of 9.0%, and by 2 basis points over the trailing five-year period with an annualized net-of-fee return of 6.1%.

Since inception, the Fund has returned 8.24% net-of-fees outperforming its benchmark by 25 basis points annually.
The Fund’s domestic equity managers gained 7.5% on a net-of fee basis during the fiscal year, Public School Teachers’ Pension and Retirement Fund of Chicago August 20, 2019 underperforming the benchmark return of 9.0%.

The Fund’s international equity managers registered a 3 positive return of 0.3% net-of-fees over the same period and outperformed the passive benchmark by 7 basis points.
The Fund’s active management in public equities detracted from performance for the Fund for the fiscal year ending June 30, 2019.

The fixed income composite returned 8.3% net-of-fees compared to the benchmark return of 7.9% over the trailing 12 months.

Fund’s ongoing efforts to enhance investment and its continued due diligence activities.

Callan is working on the continued enhancement of the Fund’s investment strategy.
The Fund’s private real estate managers posted returns of 5.7% on a net of fee basis compared to the private real estate benchmark return of 5.5%.

During the fiscal year, the infrastructure portfolio gained All performance returns for the Public School Teachers’ Pension & Retirement Fund of Chicago 10.1% on a net of fee basis compared to the infrastructure benchmark of 14.3%.
Private equity presented in this report have been calculated by Callan LLC using a time weighted rate of return contributed 11.3% to the Fund over the trailing fiscal year.

calculation for accounts with daily pricing and using a modified BAI calculation for accounts without daily pricing.
Manager changes over the past year are summarized below: Sincerely, New Manager Basis Investment Group Heitman Longpoint Long Wharf Astra Partners Brianne Weymouth, CAIA Farol Turning Rock Wellington Management Co. State Street Global Advisors IFM Infrastructure Partners DPI Partners Terminated Manager Fremont Realty Group Newport/DV Urban Asset Class Real Estate Real Estate Real Estate Real Estate Private Equity Private Equity Private Equity Fixed Income Fixed Income Infrastructure Private Equity Asset Class Real Estate Real Estate Angel Haddad Inception Date July 2018 February 2019 September 2018 June 2019 October 2018 October 2018 October 2018 January 2019 April 2019 May 2019 May 2019 Termination Date Public School Teachers’ Pension and December 2018 Retirement Fund of Chicago August 20, 2019 December 2018 3 The Public School Teachers’ Pension & Retirement Fund of Chicago maintains an appropriately diversified strategy, designed to maximize return with an acceptable risk level.
Callan supports the Fund’s ongoing efforts to enhance investment and its continued due diligence activities.

Callan is working on the continued enhancement of the Fund’s investment strategy.

All performance returns for the Public School Teachers’ Pension & Retirement Fund of Chicago presented in this report have been calculated by Callan LLC using a time weighted rate of return calculation for accounts with daily pricing and using a modified BAI calculation for accounts without daily pricing.
Sincerely, Brianne Weymouth, CAIA Angel Haddad | Investments | 65 INVESTMENT MANAGERS AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Adams Street Partners, LLC Lazard Asset Management, LLC African Development Partners, LP Leading Edge Investment Advisors, LLC Ariel Capital Management, LLC Astra Partners I, LP LM Capital Group, LLC Long Wharf Capital, LLC Attucks Asset Management, LLC Longpoint Realty Partners, LP Basis Management Group, LLC Blackstone Group Macquarie Group Mesirow Financial, Inc. BMO Global Asset Management Morgan Stanley Investment Management, Inc. Brookfield Asset Management Capri Capital Partners, LLC Muller and Monroe Asset Management, LLC New Mainstream Capital, LP Channing Capital Management, LLC Newport Capital Partners Holdings, LLC CityView Clarion Partners, LLC Conestoga Capital Dimensional Fund Advisors, LTD Earnest Partners, LLC EQT Services (UK) Limited Europa Capital Partners, LLP Farol Asset Management, LP Fortress Investment Group, LLC Oak Street Real Estate Capital, LLC Palladium Equity Partners, LLC Pantheon Ventures, LLP Pharos Capital Group, LLC Phocas Financial Prudential Investment Management, Inc. Pugh Capital Management, Inc. RhumbLine Advisers, LP RLJ Equity Partners Franklin Templeton Real Estate Advisors, LLC State Street Global Advisors (SSGA) Fremont Realty Capital, LP Strategic Global Advisors, LLC Garcia, Hamilton & Associates, LP Syncom Venture Partners, LLC GreenOak Real Estate Advisors, LP Taplin, Canida and Habacht, Inc. HarbourVest Partners, LLC The Northern Trust Company Heitman, LLC Hispania Capital Partners, LLC Hudson Realty Capital, LLC ICV Capital Partners, LLC Turning Rock Partners, LP UBS Realty Investors, LLC Urban America Advisors, LP Walton Street Capital, LLC IFM Global Infrastructure (US), LP Wellington Management Company, LLP Industry Capital Advisors, LLC Western Asset Management Company J.P. Morgan Fleming Asset Management, Inc. William Blair & Company, LLC Kohlberg, Kravis,
 Roberts & Company, LP Zevenbergen Capital Investments, LLC LaSalle Investment Management, Inc. ` ` 66 | Investments | TOTAL ANNUAL FUND RATE OF RETURN* FOR THE FISCAL YEARS ENDED JUNE 30, 2010 THROUGH 2019 ____________________________________________________________________________________________ * Time-weighted rate of return.
| Investments | 67 SCHEDULE OF INVESTMENT RESULTS ____________________________________________________________________________________________ 2015 2016 2017 2018 2019 3 Year 5 Year 10 Year As of June 30 Annualized Returns Total Fund Large Cap 3.5 % 7.6 % 0.5 % 13.6 % 9.0 % 1.1 % 18.9 % 15.8 % 5.5 % 9.3 % 9.3% 6.3% 10.0% 14.6% 10.3% 14.6% Russell 1000 Index 7.4 % 2.9 % 18.1 % 14.5 % 10.0 % 14.2% 10.5% 14.8% S&P 500 7.4 % 4.0 % 17.9 % 14.4 % 10.4 % 14.2% 10.7% 14.7% Small Cap Equity 6.8 % (7.7)% 21.2 % 15.4 % (3.0)% 10.7% 6.0% 13.2% Russell 2000 Index 6.5 % (6.7)% 24.6 % 17.6 % (3.3)% 12.3% 7.1% 13.5% International Equity (1.8)% (8.4)% 19.8 % International Equity Benchmark (4.9)% (10.2)% 20.5 % 8.5% 7.8% 0.7 % 0.3 % 9.4% 3.3% 8.7% 9.2% 2.0% 6.5% Fixed Income 1.5 % 6.3 % 0.9% (0.3%) 8.4 % 2.9% 3.3% 4.8% Bloomberg Aggregate Index 1.9 % 6.0 % (0.3%) (0.4)% 7.9 % 2.3% 3.0% 3.9% REITs 2.6 % 12.1 % 0.4% 12.6 % — — — — — — — — — — — — 14.6 % 14.0 % 6.7 % 8.4 % 6.3 % 7.1% 10.1% 9.1% 14.4 % 11.8 % 6.9 % 7.6 % 5.5 % 6.6% 8.8% 8.9% Custom REIT Index* Real Estate (Private) NFI ODCE Value Weight Net Only Private Equity** 11.3 % 5.1 % 15.8 % 14.6 % 11.7 % 14.0% 11.6% 12.5% N/A — — — — — — — — Infrastructure*** (5.3)% 9.6 % 6.8 % 17.8 % 10.2 % 11.5% 7.2% 7.5% Absolute Benchmark 8.0 % 8.0 % 8.0 % 3.0 % 14.3 % 8.3% 8.2% 8.1% Hedge Funds 3.2 % (8.9)% T-Bills+5% 5.0 % 5.2 % — — — — — — — — — — — — * Custom REIT Index is calculated based on a weighted average of the NAREIT domestic and NAREIT global indices to accurately reflect the changes in CTPF strategy.
** Returns for Private Equity are based on the custodial statements.

*** New Infrastructure benchmark (FTSE Core Developed Infrastructure 50/50/Index) adopted September 21, 2017.

Note: Returns are calculated based upon a time-weighted rate of return.
68 | Investments | INVESTMENT PORTFOLIO SUMMARY DOLLARS IN MILLIONS ____________________________________________________________________________________________ June 30, 2018 Fair Value Purchases Sales (Fair Value) Fair Value Adjustments June 30, 2019 Fair Value Percent of Total Fixed Income $ 2,418.2 $ 204.3 $ (193.1) $ 93.2 $ 2,522.6 23.5% Equity 6,445.2 193.2 (157.4) (115.6) 6,365.4 59.4% Public REITs Real Estate Infrastructure Private Equity Cash & Cash Equivalent 144.8 746.5 227.4 300.2 447.4 — 4.0 — 8.9 — 0.3 — — 13.0 (31.0) (16.5) 70.8 219.1 (272.2) (34.8) 157.8 719.8 210.9 379.9 359.5 1.5% 6.7% 2.0% 3.5% 3.4% Total Portfolio $ 10,729.7 $ 629.5 $ (622.4) $ (20.9) $ 10,715.9 100.0% | Investments | 69 ASSET ALLOCATION SUMMARY IN MILLIONS OF DOLLARS* ___________________________________________________________________________________________ * Note: Percentage indicates actual category weight as a percentage of the entire portfolio.
70 | Investments | HISTORICAL ASSET ALLOCATION BY PERCENTAGE OF TOTAL PORTFOLIO ____________________________________________________________________________________________ 2014 2015 2016 2017 2018 2019 Actual Policy Actual Policy Actual Policy Actual Policy Actual Policy Actual Policy Equity: Domestic International Public REITs Private Equity Total Equity Fixed Income Real Estate Infrastructure Hedge Funds Cash & Equiv.
— 5.0 66.0 23.0 9.0 2.0 — — 32.8 30.0 1.3 2.8 66.9 19.9 7.3 2.4 — 3.5 30.5 30.5 — 5.0 66.0 23.0 9.0 2.0 — — 29.0 31.1 1.3 2.8 64.2 22.5 7.0 2.1 — 4.2 30.5 30.5 — 5.0 66.0 23.0 9.0 2.0 — — 29.1 30.3 1.5 3.5 64.4 23.5 6.7 2.0 — 3.4 30.5 30.5 — 5.0 66.0 23.0 9.0 2.0 — — Total Portfolio 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 HISTORICAL ASSET ALLOCATION BY MARKET VALUE IN MILLIONS OF DOLLARS ____________________________________________________________________________________________ | Investments | 71 DOMESTIC EQUITY SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Economic Sector Holdings Economic Sector Number of Shares Market Value Percent of Total Consumer Discretionary 7,097,810 $ Consumer Staples Energy Financial Services Health Care Materials & Processing Miscellaneous Producer Durables Technology Utilities Grand Total 2,846,621 3,939,658 9,741,806 6,191,299 2,479,988 5,539,066 5,193,530 7,829,017 3,082,842 532,179,198 168,380,704 147,016,340 562,881,064 436,476,631 104,626,019 7,832,701 320,932,135 691,478,835 144,112,905 17.1% 5.4% 4.7% 18.1% 14.0% 3.3% 0.3% 10.3% 22.2% 4.6% S&P 500 Index 10.2% 7.3% 5.0% 16.2% 14.2% 2.8% 0.0% 9.4% 21.5% 13.4% 53,941,637 $ 3,115,916,532 100.0% 100.0% Top 10 Domestic Equity Holdings Description Microsoft Corp. Amazon, Inc. Apple, Inc. Facebook, Inc.
Alphabet, Inc. - Class C Chevron Corp.
Alphabet, Inc. - Class A Visa, Inc. Berkshire Hathaway, Inc. Johnson & Johnson Number of Shares 774,640 45,754 433,263 291,690 32,821 254,383 28,549 165,750 132,499 203,352 Market Value $ 103,770,774 86,641,147 85,751,413 56,296,170 35,476,547 31,655,421 30,912,857 28,765,913 28,562,949 28,322,867 Percent of Total 3.3% 2.8% 2.8% 1.8% 1.2% 1.0% 1.0% 0.9% 0.9% 0.9% Total Top 10 Domestic Equity Grand Total 2,362,701 53,941,637 $ $ 516,156,058 3,115,916,532 16.6% 100.0% A complete list of the portfolio holdings is available at the pension fund office.
72 | Investments | INTERNATIONAL EQUITY SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Market Value Percent of Total MSCI ACWI Ex-U.S. Index Country South Africa Other Total Africa Brazil Canada Chile Colombia Mexico Other Total Americas Australia China Hong Kong India Japan Singapore South Korea Taiwan Other Total Asia/Pacific Basin Belgium France Germany Ireland Netherlands Norway Spain Sweden Switzerland United Kingdom Other Total Europe Grand Total Number of Shares 2,822,926 $ $ $ $ 1,234,266,537 18,451,594 3,673,074 3,329,642 1,577,198 2,947,229 3,187,810 1,697,747 2,465,811 2,100,069 41,056,593 43,807,155 286,470,057 206,754,822 102,813,475 150,256,413 42,747,606 46,641,739 50,179,770 164,049,711 523,930,146 153,572,639 106,079,169 299,522,179 $ $ A complete list of the portfolio holdings is available at the pension fund office.
| Investments | 73 TOP 10 INTERNATIONAL EQUITY HOLDINGS AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Description Number of Shares Market Value Percent of Total DFA International Small Cap 8,335,557 $ 149,873,321 Lazard Emerging Markets Equity Portfolio RELX, PLC Safran S.A. Novartis A.G. SAP SE Earnest Partners China Fund 7,605,996 2,280,541 374,795 572,802 377,604 18,778 Taiwan Semiconductor Mfg.
Co., Ltd. 3,053,617 Diageo, PLC Roche Holding A.G. 776,757 117,984 134,854,306 55,352,294 54,995,312 52,373,661 51,924,573 44,548,251 35,247,174 34,023,502 33,232,106 4.6% 4.2% 1.7% 1.7% 1.6% 1.6% 1.4% 1.1% 1.0% 1.0% Total Top 10 International Equity Grand Total 23,514,431 299,522,179 $ $ 646,424,500 3,249,511,598 19.9% 100.0% A complete list of the portfolio holdings is available at the pension fund office.
74 | Investments | FIXED INCOME SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Fixed Income Holdings Asset Category Par Value Market Value Percent of Total Barclays Aggregate Bond Index Treasury $ 765,400,798 $ 795,645,971 Mortgage Backed Securities 411,964,155 427,166,650 Corporate Bonds 901,014,695 987,851,619 Government Agency 578,714,562 184,108,095 Non Gov't Backed CMOs/Asset Backed Commercial Mortgage-Backed 43,113,740 43,640,478 70,912,474 72,569,307 Municipal Bonds 14,138,000 17,199,944 31.5 % 16.9 % 39.2 % 7.3 % 1.7 % 2.9 % 0.7 % 39.5% 27.2% 25.0% 5.8% 0.5% 2.0% 0.0% 0.0% Other Grand Total (1,939) (5,624,733) (0.2)% $ 2,785,256,485 $ 2,522,557,331 100.0 % 100.0% A complete listing of the portfolio holdings is available at the pension fund office.
| Investments | 75 PUBLIC REITS SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Public REITs Summary Property Type Number of Shares Market Value Percent of Total NAREIT Property Index Retail REITs 568,548 $ 1,061,544 569,965 273,226 621,112 2,357,256 Industrial & Office REITs Residential (Apartment) REITs Health Care Facilities Hotel & Lodging REITs Other Grand Total Top 10 Public REITs Holdings 12,082,519 24,599,782 24,411,195 9,030,204 12,172,216 75,457,329 7.7% 15.6% 15.5% 5.7% 7.7% 47.8% 14.2% 17.0% —% 10.3% 4.4% 54.2% 5,451,651 $ 157,753,245 100.0% 100.0% Holding Number of Shares Market Value Percent of Total American Tower Corp. Essex Property Trust, Inc.
Host Hotels & Resorts, Inc. Crown Castle International Corp. Simon Property Group, Inc. Gaming and Leisure Properties, Inc. Equinix, Inc. Camden Property Trust SEGRO, PLC EPR Properties Total Top 10 Public REITs Holdings Grand Total 48,580 27,778 363,807 39,196 28,447 114,398 8,295 39,146 420,640 51,977 1,142,264 5,451,651 $ $ $ 9,932,181 8,109,232 6,628,564 5,109,199 4,544,693 4,459,234 4,183,086 4,086,451 3,909,115 3,876,964 6.3% 5.1% 4.2% 3.2% 2.9% 2.8% 2.7% 2.6% 2.5% 2.5% 54,838,719 157,753,245 34.8% 100.0% A complete listing of the portfolio holdings is available at the pension fund office.
76 | Investments | PRIVATE EQUITY SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Private Equity Holdings Fund Total Capital Called Market Value Percent of Total Adams Street Partners (Multiple Funds) $ 170,573,107 $ 170,573,107 44.9% Astra Partners I, LP 1,898,656 1,898,656 Brinson Partners (Multiple Funds) 4,764,558 4,783,919 EQT Fund II, LP Farol Fund II, LP 3,383,245 3,852,840 10,700,777 10,700,777 HarbourVest Partners (Multiple Funds) 36,315,031 36,315,031 Hispania Capital Partners 2,332,489 2,332,489 ICV Partners (Multiple Funds) 13,298,620 13,298,620 KKR Americas Fund 10,872,981 10,872,981 0.5% 1.2% 1.0% 2.8% 9.6% 0.6% 3.5% 2.9% Mesirow Capital Partners (Multiple Funds) 54,640,980 54,640,980 14.4% Muller & Monroe Private Equity Fund of Funds 2,050,249 2,050,249 NMS Capital Fund 2,851,751 2,851,751 Palladium Equity Partners (Multiple Funds) 11,151,460 11,151,460 Pantheon Ventures (Multiple Funds) 21,500,886 21,908,441 Pharos Capital Partners (Multiple Funds) 19,808,728 19,808,728 RLJ Equity Partners Fund II, LP 3,472,603 3,472,603 Syndicated Communications Venture Partners V, LP 204,004 204,004 Turning Rock Fund I, LP 9,214,947 9,214,947 0.5% 0.8% 2.9% 5.8% 5.2% 0.9% 0.1% 2.4% Grand Total $ 379,035,072 $ 379,931,583 100.0% A complete listing of the portfolio holdings is available at the pension fund office.
| Investments | 77 INFRASTRUCTURE SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Infrastructure Holdings Fund Number of Shares Market Value Percent of Total JP Morgan Infrastructure Investments Fund 92,237,539 Total Commingled Funds 92,237,539 $ $ 92,237,539 92,237,539 43.7% 43.7% Fund Total Capital Called Market Value Percent of Total Brookfield Infrastructure Fund III, LP $ 36,845,170 $ 36,845,189 Macquarie Infrastructure Partners II US 43,456,018 43,456,018 Macquarie European Infrastructure Fund III 33,730,030 38,411,759 17.5% 20.6% 18.2% 56.3% 118,712,966 210,950,505 100.0% Total Closed-End Funds $ 114,031,218 Grand Total $ $ A complete list of the portfolio holdings is available at the pension fund office.
78 | Investments | REAL ESTATE SUMMARY AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Real Estate Holdings Fund Number of Shares Market Value Percent of Total JP Morgan Strategic Property Fund 44,934 $ 159,684,050 LaSalle Property Fund PRISA I Real Estate Fund PRISA II Real Estate Fund UBS Trumbull Property Fund Total Commingled Funds 111,014,557 2,298 607 79,879,767 111,014,557 153,190,737 23,934,615 79,879,767 190,942,163 $ 527,703,726 22.2% 15.4% 21.3% 3.3% 11.1% 73.3% Fund Total Capital Called Market Value Percent of Total Big Real Estate Fund I, LP $ 12,860,805 $ Blackstone RE Debt Strategies High Grade, LP Capri Select Income II, LLC Clarion Lion Industrial Trust Emerging Manager Real Estate Fund of Funds, LP Europa Fund III, LP 30,095,656 48,438 59,678,519 9,346,419 1,182,253 Fortress Japan Opportunity Domestic Fund C-I, LP 210,012,525 Fortress Japan Opportunity Fund II Dollar A, LP GreenOak US III, LP Heitman Value Partners IV, LP Hudson Realty Capital Fund V, LP Industry Capital Berkeley Partners Long Wharf Real Estate Partners VI, LP Longpoint Realty Fund I, LP MB Asia RE Fund (TE), LP Newport Capital Partners II, LP Oak Street Real Estate Capital IV, LP Southwest Multifamily Partners, LP Walton Street Capital (Multiple Funds) Total Closed-End Funds Grand Total 3,378,826 4,665,219 6,696,241 26,605 108,267 2,401,372 2,948,128 393,977 16,637,752 8,041,652 11,420,894 20,069,732 $ 400,013,280 $ $ A complete list of the portfolio holdings is available at the pension fund office.
| Investments | 79 MANAGER ANALYSIS AS OF JUNE 30, 2019 ____________________________________________________________________________________________ Asset Category Market Value as of June 30, 2019 Percent of Total FY 2019 Manager Fees Percent of Market Value Domestic Equity $ 3,115,916,532 29.1% $ 5,281,695 International Equity 3,249,511,598 30.3% 13,180,990 Public REITs Fixed Income Real Estate Infrastructure Private Equity Cash and Equivalent 157,753,245 1.5% — 2,522,557,331 23.5% 2,307,774 719,817,831 210,950,505 379,931,583 359,473,153 6.7% 2.0% 3.5% 3.4% 8,099,869 2,901,816 6,469,023 — Total $ 10,715,911,778 100.0% $ 38,241,167 A complete list of the portfolio holdings is available at the pension fund office.
0.2% 0.4% — 0.1% 1.1% 1.4% 1.7% — 0.4% 80 | Investments | BROKER COMMISSION REPORT DOMESTIC AGENCY TRADES FOR THE YEAR ENDED JUNE 30, 2019 ____________________________________________________________________________________________ $ Broker Loop Capital Markets, LLC Cabrera Capital Markets, LLC The Williams Capital Group, LP North South Capital, LLC Telsey Advisory Group, LLC Penserra Securities, LLC/Cheevers & Co., Inc. Andes Capital Group, LLC Barclays Capital, Inc. Raymond James & Associates, Inc. JP Morgan Securities, LLC Cowen & Co., LLC Goldman Sachs Execution & Clearing, LP RBC Capital Markets, LLC Cheevers & Co., Inc. Morgan Stanley & Co., LLC Bank of America/Merrill Lynch Deutsche Bank Securities, Inc./Alex Brown Investment Technology Group, Inc./ ITG, Inc. Castleoak Securities, LP CL King & Associates, Inc. Vandham Securities Corp. Instinet, LLC Robert W. Baird & Co., Inc. Citigroup Global Markets, Inc./Salomon Bros. Stephens Yamner & Co., Inc. Sandler, O'Neil & Partners, LP JMP Securities, LLC Keybanc Capital Markets, Inc. Liquidnet, Inc. Drexel Hamilton, LLC Seaport Global Securities, LLC CIS Brokerage, Inc. Sanford C. Bernstein & Co., LLC Credit Suisse First Boston William Blair & Co., LLC Jefferies, LLC Craig-Hallum Capital Group, LLC Int'l FCStone Partners, LP/G.
X. Clarke & Co., LP Suntrust Robinson Humphrey, Inc. Piper Jeffray & Co. Oppenheimer & Co., Inc. Wall Street Access GLP Cantor Fitzgerald & Co. Divine Capital Markets, LLC Other (24 Brokers) Number of Shares Traded Commission Amount Grand Total 34,997,324 $ 690,195 $ $ Commission per Share | Investments | 81 BROKER COMMISSION REPORT MWDBE DOMESTIC AGENCY TRADES FOR THE YEAR ENDED JUNE 30, 2019 ____________________________________________________________________________________________ Broker Number of Shares Traded Commission Amount Commission per Share Loop Capital Markets, LLC 5,122,116 $ 128,140 $ Cabrera Capital Markets, LLC The Williams Capital Group, LP North South Capital, LLC Telsey Advisory Group, LLC Penserra Securities, LLC/Cheevers & Co., Inc. Andes Capital Group, LLC Castleoak Securities, LP CL King & Associates, Inc. Vandham Securities Corp. Drexel Hamilton, LLC Divine Capital Markets, LLC Mischler Financial Group, Inc. Guzman & Co. Sturdivant & Co., Inc Capital Institutional Services, Inc. (CAPIS) The Fig Group, LLC Total Directed Domestic Commission Grand Total 2,420,697 6,023,605 1,310,145 1,542,457
Total $ $ 463,861 690,195 $ $ 0.03 0.03 0.01 0.04 0.03 0.02 0.03 0.01 0.03 0.04 0.03 0.02 0.03 0.01 0.03 0.01 0.03 0.02 0.02 82 | Investments | BROKER COMMISSION REPORT INTERNATIONAL AGENCY TRADES FOR THE YEAR ENDED JUNE 30, 2019 ____________________________________________________________________________________________ $ Broker Loop Capital Markets, LLC Penserra Securities, LLC/Cheevers & Co., Inc. Mischler Financial Group, Inc. UBS Securities, LLC/UBS Warburg, LLC Liquidnet, Inc. Credit Suisse First Boston Bank of America/Merrill Lynch JP Morgan Securities, LLC Citigroup Global Markets Inc./Salomon Bros. Investment Technology Group, Inc./ ITG, Inc. Jefferies, LLC Deutsche Bank Securities, Inc./Alex Brown Instinet, LLC Morgan Stanley & Co., LLC Credit Lyonnais Securities Ltd/CLSA Goldman Sachs Execution & Clearing, LP Berenberg Bank Daiwa Securities Group, Inc. Macquarie Capital (USA), Inc. Mizuho Financial Group The Fig Group, LLC BTIG, LLC Sanford C. Bernstein & Co., LLC Exane, Inc. BNP Paribus Brokerage Services, Inc. Societe Generale Securities Corporation Cowen And Company, LLC HSBC Bank/Midland (LDN) Barclays Capital, Inc. Cabrera Capital Markets, LLC Bloomberg, LP Weeden & Co., LP RBC Capital Markets, LLC North South Capital, LLC Helvea SA Kepler Cheuvreux SMBC Nikko Capital Markets, Ltd Skandinaviska Enskilda Banken AB (SEB) Capital Institutional Services, Inc. (CAPIS) Mitsubishi Securities (USA) Investec Henderson Crosthwaite Securities Nomura Securities International, Inc. Banc of America Securities, LLC Carnegie Investment Bank AB/Carnegie, Inc.
The Williams Capital Group, LP Jones Trading Institutional Services, LLC Other (70 Brokers) Number of Shares Traded Commission Amount $ Commission per Share Grand Total 247,017,214 $ 2,146,693 $ 0.01 | Investments | 83 BROKER COMMISSION REPORT MWDBE INTERNATIONAL AGENCY TRADES FOR THE YEAR ENDED JUNE 30, 2019 ____________________________________________________________________________________________ Broker Number of Shares Traded Commission Amount Commission per Share Loop Capital Markets, LLC 21,550,700 $ 272,107 $ Penserra Securities LLC/Cheevers & Co., Inc. 11,235,100 Mischler Financial Group, Inc.
The Fig Group, LLC Cabrera Capital Markets, LLC North South Capital, LLC Capital Institutional Services, Inc. (CAPIS) The Williams Capital Group, LP Castleoak Securities, LP Tribal Capital Markets, LLC Vandham Securities Corp. Divine Capital Markets, LLC Andes Capital Group, LLC 5,006,709 4,033,013 5,448,222 1,691,453 478,027 251,339 566,998 21,792 34,110 28,110 880 174,209 143,816 25,719 14,654 10,442 9,247 6,752 3,086 911 663 572 22 Total Directed Domestic Commission Grand Total 50,346,453 247,017,214 $ $ 662,200 2,146,693 $ $ 0.01 0.02 0.03 0.01 0.00 0.01 0.02 0.03 0.01 0.04 0.02 0.02 0.03 0.01 0.01 84 | Investments | SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 ____________________________________________________________________________________________ Cash and Cash Equivalents - Beginning of Period $ 580,897,074 $ 818,028,637 2019 2018 Add Receipts: Member Contributions Public Revenues Interest and Dividends Miscellaneous Net Investment Sales Total Cash Receipts Less Disbursements: Pension Benefits Refunds 2.2 Legislative Refunds Refunds of Insurance Premiums Investment and Administrative Expenses Total Cash Disbursements Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - End of Period 188,577,363 189,743,551 782,226,739 783,529,139 296,826,122 268,421,943 1,687,970 — 251,253,008 112,702,276 $ 1,520,571,202 $ 1,354,396,909 1,470,812,926 1,441,077,156 23,492,174 27,318,770 562,230 742,315 61,626,322 61,907,220 63,504,990 60,483,011 $ $ 1,619,998,642 $ 1,591,528,472 (99,427,440) (237,131,563) 481,469,634 $ 580,897,074 | Investments | 85 Investment Authority Illinois Pension Code SECTION 5/17-146.
TO MAKE INVESTMENTS To make investments.

To invest the monies of the Fund, subject to the requirements and restrictions set forth in this Article and in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114 and 1-115.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act.
Those requirements shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

The Board of Trustees shall have the authority to enter into any agreements and to execute any documents that it determines to be necessary to complete any investment transaction.

All investments shall be clearly held and accounted for to indicate ownership by the Fund.
The Board of Trustees may direct the registration of securities or the holding of interests in real property in the name of the Fund or in the name of a nominee created for the express purpose of registering securities or holding interests in real property by a national or state bank or trust company authorized to conduct a trust business in the State of Illinois.
The Board of Trustees may hold title to interests in real property in the name of the Fund or in the name of a title holding corporation created for the express purpose of holding title to interests in real property.

Investments shall be carried at cost or at a value determined in accordance with generally accepted accounting principles and accounting procedures approved by the Board of Trustees.
The value of investments held by the Fund in one or more commingled investment accounts shall be determined in accordance with generally accepted accounting principles.
The Board of Trustees of any Fund established under this Article may not transfer its investment authority, nor transfer the assets of the Fund to any other person or entity for the purpose of consolidating or merging its assets and management with any other pension fund or public investment authority, unless the Board of Trustees resolution authorizing such transfer is submitted for approval to the contributors and pensioners of the Fund at elections held not less than 30 days after the adoption of such resolution by the Board of Trustees, and such resolution is approved by a majority of the votes cast on the question in both the contributors election and the pensioners election.
The election procedures and qualifications governing the election of trustees shall govern the submission of resolutions for approval under this paragraph, insofar as they may be made applicable.

SECTION 5/17-146.2.

TO LEND SECURITIES To lend securities.

The Board of Trustees may lend securities owned by the Fund to a borrower upon such written terms and conditions as may be mutually agreed.
The agreement shall provide that during the period of the loan the Fund (or the custodian of the Fund, or agent thereof, as applicable) shall retain the right to receive or collect from the borrower all dividends, interest and distributions to which the Fund would have otherwise been entitled.
The borrower shall deposit with the Fund collateral for the loan equal to the market value of the securities at the time the loan is made, and shall increase the amount of collateral if the Board of Trustees requests an additional amount because of subsequent increased market value of the securities.

The Board of Trustees may accept from the borrower cash collateral or collateral consisting of assets described in Section 1-113 of this Act.
To the extent that the Fund participates in a securities lending program established and maintained by (1) a national or State bank which is authorized to do business in the State of Illinois, or (2) an investment manager, the Board of Trustees may accept collateral consisting of an undivided interest in a pool of commingled collateral that has been established by the bank or investment manager for the purpose of pooling collateral received for the loans of securities owned by substantially all of the participants in such bank’s or investment manager’s securities lending program.
Nothing in Sections 1-109, 1-110 or 1-113 of this Act shall be construed to prohibit the Fund’s lending of securities in accordance with this Section.

86 | Investments | Investment Authority Illinois Pension Code SECTION 5/17-147.

CUSTODY OF FUND-BONDS-LEGAL PROCEEDINGS Custody of Fund-Bonds-Legal proceedings.

The city treasurer, ex-officio, shall be the custodian of the Fund, and shall secure and safely keep it, subject to the control and direction of the Board of Trustees.
He shall keep his books and accounts concerning the Fund in the manner prescribed by the Board of Trustees.

The books and accounts shall always be subject to the inspection of the Board of Trustees or any member thereof.

The city treasurer shall be liable on his official bond for the proper performance of his duties and the conservation of the Fund.
Payments from the Fund shall be made upon warrants signed by the president and the secretary of the Board of Education, the president of the Board of Trustees, and countersigned by the executive director or by such person as the Board of Trustees may designate from time to time by appropriate resolution.
Neither the treasurer nor any other officer having the custody of the Fund is entitled to retain any interest accruing thereon, but such interest shall accrue and inure to the benefit of such Fund, become a part thereof, subject to the purposes of this Article.

Any legal proceedings necessary for the enforcement of the provisions of this Article shall be brought by and in the name of the Board of Trustees of the Fund.
| Investments | 87 ACTUARIAL This section includes the actuarial reports and summarizes actuarial liability and unfunded actuarial liability.

Schedules of data summarizing information about members and beneficiaries, actuarial assumptions, and a glossary of terms are also included.
88 88 | Actuarial | | Actuarial | October 9, 2019 Board of Trustees October 9, 2019 Public School Teachers' Pension and Retirement Fund of Chicago 203 North LaSalle Street, Suite 2600 Chicago, Illinois 60601 Board of Trustees Public School Teachers' Pension and Retirement Fund of Chicago Re: Public School Teachers' Pension and Retirement Fund of Chicago Actuarial Valuation as of 203 North LaSalle Street, Suite 2600 Chicago, Illinois 60601 June 30, 2019 Dear Members of the Board: Re: Public School Teachers' Pension and Retirement Fund of Chicago Actuarial Valuation as of June 30, 2019 The results of the June 30, 2019, Annual Actuarial Valuation of the Public School Teachers' Pension and Retirement Fund of Chicago (commonly known as the Chicago Teachers’ Pension Fund, “CTPF” or “Fund”) Dear Members of the Board: are presented in this report.
The results of the June 30, 2019, Annual Actuarial Valuation of the Public School Teachers' Pension and This report was prepared at the request of the Board and is intended for use by the Fund and those Retirement Fund of Chicago (commonly known as the Chicago Teachers’ Pension Fund, “CTPF” or “Fund”) designated or approved by the Board.

This report may be provided to parties other than the Fund only in are presented in this report.

its entirety and only with the permission of the Board.
GRS is not responsible for unauthorized use of this report.

This report was prepared at the request of the Board and is intended for use by the Fund and those designated or approved by the Board.

This report may be provided to parties other than the Fund only in The purposes of the actuarial valuation are to measure the Fund’s funding progress, and to determine the its entirety and only with the permission of the Board.
GRS is not responsible for unauthorized use of this contribution requirements for the fiscal year beginning July 1, 2020, and ending June 30, 2021.

The report.

employer’s contribution requirement has been determined in accordance with Illinois State Statutes, in particular under 40 ILCS Sections 5/17-127, 5/17-127.2, and 5/17-129.
Information required by The purposes of the actuarial valuation are to measure the Fund’s funding progress, and to determine the Governmental Accounting Standards Board (“GASB”) Statement Nos.

67 and 68 is provided in a separate contribution requirements for the fiscal year beginning July 1, 2020, and ending June 30, 2021.

The report.

This report should not be relied on for any purpose other than the purposes described herein.
employer’s contribution requirement has been determined in accordance with Illinois State Statutes, in Determinations of financial results, associated with the benefits described in this report, for purposes particular under 40 ILCS Sections 5/17-127, 5/17-127.2, and 5/17-129.

Information required by other than those identified above may be significantly different.

Governmental Accounting Standards Board (“GASB”) Statement Nos.

67 and 68 is provided in a separate report.


This report should not be relied on for any purpose other than the purposes described herein.

The contribution requirement in this report is determined using the actuarial assumptions and methods Determinations of financial results, associated with the benefits described in this report, for purposes disclosed in Section G of this report.
This report includes risk metrics beginning on page 17, but does not other than those identified above may be significantly different.

include a more robust assessment of the risks if future experience deviates from the actuarial assumptions.

Additional assessment of risks was outside the scope of this assignment.

The contribution requirement in this report is determined using the actuarial assumptions and methods disclosed in Section G of this report.
This report includes risk metrics beginning on page 17, but does not Board of Trustees This actuarial valuation assumed the continuing ability of the plan sponsor to make the contributions include a more robust assessment of the risks if future experience deviates from the actuarial Public School Teachers' Pension and Retirement Fund of Chicago necessary to fund this plan.

A determination regarding whether or not the plan sponsor is actually able to assumptions.
Additional assessment of risks was outside the scope of this assignment.

Page 2 do so is outside our scope of expertise and was not performed.

This actuarial valuation assumed the continuing ability of the plan sponsor to make the contributions The findings in this report are based on data and other information through June 30, 2019.

The actuarial necessary to fund this plan.


A determination regarding whether or not the plan sponsor is actually able to valuation was based upon information furnished by CTPF staff, concerning Retirement Fund benefits, do so is outside our scope of expertise and was not performed.

financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries.

We checked for internal reasonability and year-to-year consistency, but did not audit the data.
We are not responsible for the accuracy or completeness of the information provided by CTPF staff.

This report was prepared using actuarial assumptions adopted by the Board as authorized under the Illinois Pension Code.

The actuarial assumptions used for the June 30, 2019 actuarial valuation are based on an experience study for the five-year period from July 1, 2012 through June 30, 2017, the 2018 investment return assumption review and the 2019 Actuarial Assumption Study, performed by GRS.
All actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation.

Additional information about the actuarial assumptions is included in Section G of this report entitled Actuarial Methods and Assumptions.

The benefit provisions for members hired on or after January 1, 2011, were changed under Public Act 96- 0889.

Public Act 100-0023 created a third tier of benefits for new members provided that adoption by a resolution or ordinance occurs.
Given this uncertainty, GRS has not valued the benefits provided under Public Act 100-0023.

Members hired on or after this date and the assumed new hires in the projections were valued under Public Act 96-0889 benefit provisions.

| Actuarial | Although the statutory contribution requirements were met, in our opinion the statutory funding method generates a contribution requirement that is less than a reasonable actuarially determined contribution (“ADC”).
Meeting the statutory requirement does not mean that the undersigned agree that adequate actuarial funding has been achieved.

We recommend the adherence to a funding policy, such as the Board policy used to calculate the ADC under GASB Statement Nos.

67 and 68, which funds the normal cost of the plan as well as an amortization payment that seeks to pay off 100 percent of the unfunded accrued liability over a closed period of 30 years, beginning July 1, 2013.
This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems.

To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the CTPF as of the actuarial valuation date.

All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.
Lance J. Weiss and Amy Williams are Members of the American Academy of Actuaries and meet the American Academy of Actuaries Qualification Standards to render the actuarial opinions contained herein.

The signing actuaries are independent of the plan sponsor.

89 Board of Trustees Public School Teachers' Pension and Retirement Fund of Chicago Page 2 The findings in this report are based on data and other information through June 30, 2019.
The actuarial valuation was based upon information furnished by CTPF staff, concerning Retirement Fund benefits, financial transactions, plan provisions and active members, terminated members, retirees and Board of Trustees beneficiaries.

We checked for internal reasonability and year-to-year consistency, but did not audit the Public School Teachers' Pension and Retirement Fund of Chicago data.

We are not responsible for the accuracy or completeness of the information provided by CTPF staff.
Page 2 This report was prepared using actuarial assumptions adopted by the Board as authorized under the The findings in this report are based on data and other information through June 30, 2019.

The actuarial Illinois Pension Code.
The actuarial assumptions used for the June 30, 2019 actuarial valuation are based Board of Trustees valuation was based upon information furnished by CTPF staff, concerning Retirement Fund benefits, on an experience study for the five-year period from July 1, 2012 through June 30, 2017, the 2018 Public School Teachers' Pension and Retirement Fund of Chicago financial transactions, plan provisions and active members, terminated members, retirees and investment return assumption review and the 2019 Actuarial Assumption Study, performed by GRS.
All Page 2 beneficiaries.

We checked for internal reasonability and year-to-year consistency, but did not audit the actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation.

data.

We are not responsible for the accuracy or completeness of the information provided by CTPF staff.
Additional information about the actuarial assumptions is included in Section G of this report entitled The findings in this report are based on data and other information through June 30, 2019.

The actuarial Actuarial Methods and Assumptions.


valuation was based upon information furnished by CTPF staff, concerning Retirement Fund benefits, This report was prepared using actuarial assumptions adopted by the Board as authorized under the financial transactions, plan provisions and active members, terminated members, retirees and Illinois Pension Code.
The actuarial assumptions used for the June 30, 2019 actuarial valuation are based The benefit provisions for members hired on or after January 1, 2011, were changed under Public Act 96- beneficiaries.

We checked for internal reasonability and year-to-year consistency, but did not audit the on an experience study for the five-year period from July 1, 2012 through June 30, 2017, the 2018 0889.

Public Act 100-0023 created a third tier of benefits for new members provided that adoption by a data.
We are not responsible for the accuracy or completeness of the information provided by CTPF staff.

investment return assumption review and the 2019 Actuarial Assumption Study, performed by GRS.

All resolution or ordinance occurs.

Given this uncertainty, GRS has not valued the benefits provided under actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation.

Public Act 100-0023.


Members hired on or after this date and the assumed new hires in the projections This report was prepared using actuarial assumptions adopted by the Board as authorized under the Additional information about the actuarial assumptions is included in Section G of this report entitled were valued under Public Act 96-0889 benefit provisions.

Illinois Pension Code.

The actuarial assumptions used for the June 30, 2019 actuarial valuation are based Actuarial Methods and Assumptions.
on an experience study for the five-year period from July 1, 2012 through June 30, 2017, the 2018 Although the statutory contribution requirements were met, in our opinion the statutory funding method investment return assumption review and the 2019 Actuarial Assumption Study, performed by GRS.
All The benefit provisions for members hired on or after January 1, 2011, were changed under Public Act 96- generates a contribution requirement that is less than a reasonable actuarially determined contribution actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation.

0889.

Public Act 100-0023 created a third tier of benefits for new members provided that adoption by a (“ADC”).
Meeting the statutory requirement does not mean that the undersigned agree that adequate Additional information about the actuarial assumptions is included in Section G of this report entitled resolution or ordinance occurs.

Given this uncertainty, GRS has not valued the benefits provided under actuarial funding has been achieved.

We recommend the adherence to a funding policy, such as the Actuarial Methods and Assumptions.

Public Act 100-0023.


Members hired on or after this date and the assumed new hires in the projections Board policy used to calculate the ADC under GASB Statement Nos.

67 and 68, which funds the normal were valued under Public Act 96-0889 benefit provisions.
cost of the plan as well as an amortization payment that seeks to pay off 100 percent of the unfunded The benefit provisions for members hired on or after January 1, 2011, were changed under Public Act 96- accrued liability over a closed period of 30 years, beginning July 1, 2013.

0889.
0889.

Public Act 100-0023 created a third tier of benefits for new members provided that adoption by a Although the statutory contribution requirements were met, in our opinion the statutory funding method resolution or ordinance occurs.
Given this uncertainty, GRS has not valued the benefits provided under generates a contribution requirement that is less than a reasonable actuarially determined contribution This report has been prepared by actuaries who have substantial experience valuing public employee Public Act 100-0023.

Members hired on or after this date and the assumed new hires in the projections (“ADC”).

Meeting the statutory requirement does not mean that the undersigned agree that adequate retirement systems.
To the best of our knowledge the information contained in this report is accurate were valued under Public Act 96-0889 benefit provisions.

actuarial funding has been achieved.

We recommend the adherence to a funding policy, such as the and fairly presents the actuarial position of the CTPF as of the actuarial valuation date.

All calculations Board policy used to calculate the ADC under GASB Statement Nos.
67 and 68, which funds the normal have been made in conformity with generally accepted actuarial principles and practices, with the Although the statutory contribution requirements were met, in our opinion the statutory funding method cost of the plan as well as an amortization payment that seeks to pay off 100 percent of the unfunded Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.
generates a contribution requirement that is less than a reasonable actuarially determined contribution accrued liability over a closed period of 30 years, beginning July 1, 2013.

(“ADC”).

Meeting the statutory requirement does not mean that the undersigned agree that adequate Lance J. Weiss and Amy Williams are Members of the American Academy of Actuaries and meet the actuarial funding has been achieved.
We recommend the adherence to a funding policy, such as the This report has been prepared by actuaries who have substantial experience valuing public employee Board of Trustees American Academy of Actuaries Qualification Standards to render the actuarial opinions contained herein.

Board policy used to calculate the ADC under GASB Statement Nos.

67 and 68, which funds the normal retirement systems.
To the best of our knowledge the information contained in this report is accurate Public School Teachers' Pension and Retirement Fund of Chicago cost of the plan as well as an amortization payment that seeks to pay off 100 percent of the unfunded and fairly presents the actuarial position of the CTPF as of the actuarial valuation date.

All calculations Page 3 The signing actuaries are independent of the plan sponsor.
accrued liability over a closed period of 30 years, beginning July 1, 2013. have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.
Gabriel, Roeder, Smith & Company will be pleased to review this actuarial valuation and report with the This report has been prepared by actuaries who have substantial experience valuing public employee Board of Trustees and to answer any questions pertaining to the actuarial valuation.

retirement systems.
retirement systems.

To the best of our knowledge the information contained in this report is accurate Lance J. Weiss and Amy Williams are Members of the American Academy of Actuaries and meet the and fairly presents the actuarial position of the CTPF as of the actuarial valuation date.

All calculations American Academy of Actuaries Qualification Standards to render the actuarial opinions contained herein.
Respectfully submitted, have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.

The signing actuaries are independent of the plan sponsor.
GABRIEL, ROEDER, SMITH & COMPANY Lance J. Weiss and Amy Williams are Members of the American Academy of Actuaries and meet the American Academy of Actuaries Qualification Standards to render the actuarial opinions contained herein.

The signing actuaries are independent of the plan sponsor.
Lance J. Weiss, EA, MAAA, FCA Senior Consultant and Team Leader Amy Williams, ASA, MAAA, FCA Senior Consultant 90 | Actuarial | SECTION A: EXECUTIVE SUMMARY ____________________________________________________________________________________________ Actuarial Valuation Date: Required Employer Contributions for Fiscal Year Ending: June 30, 2019 June 30, 2018 June 30, 2021 June 30, 2020 Percentage of Projected Capped Payroll for Upcoming Year 52.07% 51.80% Estimated Required Employer Contributions: Required Board of Education Contributions Additional Board of Education Contributions (0.58% of pay) Additional State Contributions (0.544% of pay) State Contributions Pursuant to P.A.
100-0465 (Normal Cost)a Total Required Employer Contributions Percentage of Projected Capped Payroll Actuarial Valuation Date: Actuarial Information for Fiscal Year Ending: Actuarially Determined Contributionb as of the Actuarial Valuation Date: Annual Amount Membership: Number of Active Membersc Members Receiving Payments Vested Former Members Eligible for Deferred Benefits Non-vested Former Members Eligible for Refunds Only Total Covered Payroll as of the Actuarial Valuation Date Projected Capped Payroll for Upcoming Year Projected Capped Payroll for Upcoming Year + 1 Annualized Benefit Payments Assets: Market Value of Assets (MVA) Actuarial Value of Assets (AVA) Approximate Return on Market Value of Assets Approximate Return on Actuarial Value of Assets Ratio - Actuarial Value of Assets to Market Value of Assets Actuarial Information as of the Actuarial Valuation Date: Total Normal Cost Amount (Including Admin.
Expenses) Employer's Normal Cost Amount (Including Admin.

Expenses) Subsidy)d Actuarial Accrued Liability (AAL) Unfunded Actuarial Accrued Liability (UAAL) Funded Ratio based on Actuarial Value of Assets UAAL as % of Covered Payroll Funded Ratio based on Market Value of Assets Employer's Normal Cost Amount (Including Admin.
Expenses and Health Insurance $ 605,852,000 $ 584,504,000 13,149,000 12,333,000 254,560,000 12,647,000 11,862,000 245,487,000 $ 885,894,000 $ 854,500,000 39.076% 39.187% June 30, 2019 June 30, 2018 June 30, 2020 June 30, 2019 $ 1,147,030,511 $ 1,097,170,031 29,295 28,317 9,926 20,621 88,159 28,958 28,549 9,398 20,282 87,187 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ a State Normal Cost contribution represents the projected employer Normal Cost for fiscal years 2020 and 2021, including $65 million for the health insurance subsidy.
b The policy adopted by the Board calculates the Actuarially Determined Contribution (ADC) as the Normal Cost plus a 30-year level percent of payroll closed-period (beginning June 30, 2013) amortization of the Unfunded Accrued Liability.

As of June 30, 2019, the remaining amortization period is 24 years.

The ADC is used for financial reporting purposes only.

c Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
d Used for calculation of the ADC.
SECTION A: EXECUTIVE SUMMARY ____________________________________________________________________________________________ Actuarial Valuation Date: Required Employer Contributions for Fiscal Year Ending: June 30, 2019 June 30, 2018 June 30, 2021 June 30, 2020 Estimated Required Employer Contributions: Required Board of Education Contributions Additional Board of Education Contributions (0.58% of pay) Additional State Contributions (0.544% of pay) State Contributions Pursuant to P.A.
100-0465 (Normal Cost)a Total Required Employer Contributions Percentage of Projected Capped Payroll Actuarial Valuation Date: Actuarial Information for Fiscal Year Ending: Actuarially Determined Contributionb as of the Actuarial Valuation Date: Annual Amount $ 605,852,000 $ 584,504,000 13,149,000 12,333,000 254,560,000 12,647,000 11,862,000 245,487,000 $ 885,894,000 $ 854,500,000 39.076% 39.187% June 30, 2019 June 30, 2018 June 30, 2020 June 30, 2019 $ 1,147,030,511 $ 1,097,170,031 Percentage of Projected Capped Payroll for Upcoming Year 52.07% 51.80% Membership: Number of Active Membersc Members Receiving Payments Vested Former Members Eligible for Deferred Benefits Non-vested Former Members Eligible for Refunds Only Total Covered Payroll as of the Actuarial Valuation Date Projected Capped Payroll for Upcoming Year Projected Capped Payroll for Upcoming Year + 1 Annualized Benefit Payments Assets: Market Value of Assets (MVA) Actuarial Value of Assets (AVA) Approximate Return on Market Value of Assets Approximate Return on Actuarial Value of Assets Ratio - Actuarial Value of Assets to Market Value of Assets Actuarial Information as of the Actuarial Valuation Date: Total Normal Cost Amount (Including Admin.
Expenses) Employer's Normal Cost Amount (Including Admin.

Expenses) Employer's Normal Cost Amount (Including Admin.
Expenses and Health Insurance Subsidy)d Actuarial Accrued Liability (AAL) Unfunded Actuarial Accrued Liability (UAAL) Funded Ratio based on Actuarial Value of Assets UAAL as % of Covered Payroll Funded Ratio based on Market Value of Assets 29,295 28,317 9,926 20,621 88,159 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ a State Normal Cost contribution represents the projected employer Normal Cost for fiscal years 2020 and 2021, including $65 million for the health insurance subsidy.
b The policy adopted by the Board calculates the Actuarially Determined Contribution (ADC) as the Normal Cost plus a 30-year level percent of payroll closed-period (beginning June 30, 2013) amortization of the Unfunded Accrued Liability.

As of June 30, 2019, the remaining amortization period is 24 years.

The ADC is used for financial reporting purposes only.

c Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
d Used for calculation of the ADC.

| Actuarial | 91 SECTION B: SUMMARY OF THE ACTUARIAL VALUATION ____________________________________________________________________________________________ Introduction The law governing the Public School Teachers' Pension and Retirement Fund of Chicago requires the Actuary, as the technical adviser to the Board of Trustees, to determine the amount of Board of Education contributions required for each fiscal year.
“The Board Shall determine the amount of Board of Education contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, in order to meet the minimum contribution requirements of subsections (a) and (b).

Annually, on or before February 28, the Board shall certify to the Board of Education the amount of the required Board of Education contribution for the coming fiscal year.
The certification shall include a copy of the actuarial recommendations upon which it is based.

(40 ILCS Section 5/17 - 129(c)).” Gabriel, Roeder, Smith & Company has been retained by the CTPF Board of Trustees to perform an actuarial valuation as of June 30, 2019.

In this report, we present the results of the actuarial valuation and the appropriation requirements under Public Act 96-0889, Public Act 90-0655, Public Act 91-0357, and Public Act 100-0465 for the fiscal year ending June 30, 2021.
Accounting information required by GASB Statement Nos.

67 and 68 is provided in a separate report.

The actuarial valuation was completed based upon membership and financial data provided by the administrative staff of the CTPF.

The cost method used to determine the benefit liabilities for statutory funding is the Projected Unit Credit Cost Method as required by statute.
For actuarial valuation purposes, as well as for projection purposes, the actuarial value of assets is based on a four-year smoothing method.

Assumptions and Methods The actuarial assumptions used for the June 30, 2019, actuarial valuation remain unchanged from the last actuarial valuation as of June 30, 2018.
The actuarial assumptions were adopted by the Board (including CPS’s requested modifications) during the September 20, 2018, Board meeting, and were based on the recommendations from the experience study for the five-year period from July 1, 2012 through June 30, 2017, the 2018 investment return assumption review performed by GRS, and the requested modifications of Chicago Public Schools (“CPS”).

The actuarial assumptions can be found in Section G of the report.
Report Highlights The employer’s contribution requirement for FY 2021 is $885.9 million.

The 2018 actuarial valuation had projected the statutory contribution would increase from $854.5 million for FY 2020 to $877.1 million for FY 2021.

The key reason for the $8.8 million increase in the employer’s contribution requirement of $885.9 million over the projected amount from the prior actuarial valuation of $877.1 million is unfavorable investment experience.
Over the past 10 years, CTPF experienced investment gains on a market value basis (compared to the actuarial assumption) in fiscal years 2010, 2011, 2013, 2014, 2017 and 2018.

However, CTPF incurred investment losses (or shortfalls in return compared to the actuarial assumption) in fiscal years 2012, 2015, 2016, and 2019.

The return on market value for the year ending June 30, 2019, was approximately 4.75% compared to a return of 8.54% in FY 2018.
The average market value investment return over the most recent 10 years has been approximately 9.54%.

Table 10 on page 38 provides historical investment returns (on an MVA and AVA basis) over the past 25 years.

The funded ratio decreased from 48.4% as of June 30, 2018, to 47.5% as of June 30, 2019, based on the market value of assets, and decreased from 47.9% as of June 30, 2018, to 47.4% as of June 30, 2019, based on the actuarial value of assets.
There are net deferred asset gains of $21.8 million which will be recognized in the actuarial value of assets over the next three years.

The funded ratio and unfunded actuarial accrued liability are useful for assessing the need for and amount of future contributions other than normal cost contributions.

They are not appropriate, however, for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan's benefit obligations.
92 | Actuarial | Experience During 2019 The Fund assets earned approximately 4.75% on a market value basis during FY 2019 which was less than the investment return assumption of 7.00% for FY 2019.

The Fund assets earned approximately 5.92% on an actuarial value of assets basis during FY 2019, due to recognition of net deferred investment losses under the asset smoothing method.
Since 5.92% is less than the assumed rate of investment return of 7.00% for FY 2019, there was an asset loss of $91.71 million on the actuarial value of assets.

There was also a net gain of $80.12 million from actuarial liabilities, which is comprised of a gain of approximately $17.26 million from demographic experience, and a gain of $62.86 million from lower than expected pay increases.

The total loss from liabilities for the Fund is calculated as follows (dollars in millions): 1.
Actuarial Accrued Liability ("AAL") - Prior Year (Pensions Only) 2.

Total Normal Cost - Prior Yeara 3.

Benefits and Administrative Expenses Paid in FY 2018b 4.

Interest on the above items, 1, 2, and 3 5.

Expected AAL 06/30/2018 (1+2+3+4) 6.

Impact of Change in Actuarial Assumptions and Methods 7.

Expected AAL 06/30/2018 After Assumption Changes (5+6) 8.

Actual AAL 06/30/2018 9.

Actuarial (Gain)/Loss on Liabilities (8-7) (Pensions Only) based on actual contributions.
bIncludes refund of insurance premiums.

Numbers may not add due to rounding.

1.

Actuarial (Gain)/Loss on Assets 2.

Actuarial (Gain)/Loss on Liabilities 3.

Total Actuarial (Gain)/Loss (1+2) aTotal Normal Cost from the previous actuarial valuation includes both employee and employer portion.

The employee portion is CTPF experienced an overall actuarial loss of $11.59 million.

The total net actuarial loss is the total of the loss from assets and the net gain from liabilities.
The total actuarial loss for the year is as follows (dollars in millions): $ $ $ $ 22,922.99 366.15 (1,521.72) 1,564.85 23,332.28 — 23,332.28 23,252.16 (80.12) 91.71 (80.12) 11.59 The experience of the population determines the liability gain or loss for the year.

There was a gain on salaries, due to lower salary increases than assumed.

From the last year to this year, there were small gains or losses on retirement, disability experience, active mortality and retiree mortality.
There was a gain due to termination experience, and there was a new entrant loss.

New entrant losses will occur each year but are offset by additional contributions to the assets.

Deviations from other assumptions generated an actuarial gain.

See Table 4 Section C, for detail of the gains and losses by source.

Asset Information The market value of the assets of the Fund that are available for benefits decreased from $11,104.8 million as of June 30, 2018, to $11,038.8 million as of June 30, 2019.
The actuarial value of assets as of June 30, 2019, is $11,021.8 million, which is $17.0 million lower than the market value of assets.

This difference is due to the continuing recognition of deferred investment gains and losses.

Twenty-five percent of these gains and losses are recognized each year.
There are net deferred asset gains of $21.8 million which will be recognized in the actuarial value of assets over the next three years (a $95.5 million gain in FY 2020, a $19.1 million loss in FY 2021 and a $54.7 million loss in FY 2022).
set out in Section E. The detailed determinations of asset values utilized in this valuation and the change in assets in the last year are Experience During 2019 The Fund assets earned approximately 4.75% on a market value basis during FY 2019 which was less than the investment return assumption of 7.00% for FY 2019.

The Fund assets earned approximately 5.92% on an actuarial value of assets basis during FY 2019, due to recognition of net deferred investment losses under the asset smoothing method.
Since 5.92% is less than the assumed rate of investment return of 7.00% for FY 2019, there was an asset loss of $91.71 million on the actuarial value of assets.

There was also a net gain of $80.12 million from actuarial liabilities, which is comprised of a gain of approximately $17.26 million from demographic experience, and a gain of $62.86 million from lower than expected pay increases.

The total loss from liabilities for the Fund is calculated as follows (dollars in millions): 1.
Actuarial Accrued Liability ("AAL") - Prior Year (Pensions Only) 2.

Total Normal Cost - Prior Yeara 3.

Benefits and Administrative Expenses Paid in FY 2018b 4.

Interest on the above items, 1, 2, and 3 5.

Expected AAL 06/30/2018 (1+2+3+4) 6.

Impact of Change in Actuarial Assumptions and Methods 7.

Expected AAL 06/30/2018 After Assumption Changes (5+6) 8.

Actual AAL 06/30/2018 9.


Actuarial (Gain)/Loss on Liabilities (8-7) (Pensions Only) $ $ 22,922.99 366.15 (1,521.72) 1,564.85 23,332.28 — 23,332.28 23,252.16 (80.12) aTotal Normal Cost from the previous actuarial valuation includes both employee and employer portion.

The employee portion is based on actual contributions.

bIncludes refund of insurance premiums.

Numbers may not add due to rounding.

CTPF experienced an overall actuarial loss of $11.59 million.
The total net actuarial loss is the total of the loss from assets and the net gain from liabilities.

The total actuarial loss for the year is as follows (dollars in millions): 1.

Actuarial (Gain)/Loss on Assets 2.

Actuarial (Gain)/Loss on Liabilities 3.

Total Actuarial (Gain)/Loss (1+2) $ $ 91.71 (80.12) 11.59 The experience of the population determines the liability gain or loss for the year.

There was a gain on salaries, due to lower salary increases than assumed.
From the last year to this year, there were small gains or losses on retirement, disability experience, active mortality and retiree mortality.

There was a gain due to termination experience, and there was a new entrant loss.

New entrant losses will occur each year but are offset by additional contributions to the assets.

Deviations from other assumptions generated an actuarial gain.

See Table 4 Section C, for detail of the gains and losses by source.
Asset Information The market value of the assets of the Fund that are available for benefits decreased from $11,104.8 million as of June 30, 2018, to $11,038.8 million as of June 30, 2019.

The actuarial value of assets as of June 30, 2019, is $11,021.8 million, which is $17.0 million lower than the market value of assets.

This difference is due to the continuing recognition of deferred investment gains and losses.

Twenty-five percent of these gains and losses are recognized each year.
There are net deferred asset gains of $21.8 million which will be recognized in the actuarial value of assets over the next three years (a $95.5 million gain in FY 2020, a $19.1 million loss in FY 2021 and a $54.7 million loss in FY 2022).

The detailed determinations of asset values utilized in this valuation and the change in assets in the last year are set out in Section E. | Actuarial | 93 Funding Status The funding status of CTPF is measured by the Funded Ratio.
The Funded Ratio is the ratio of the assets available for benefits compared to the actuarial accrued liability of the Fund.

Thus, it reflects the portion of benefits earned to date by CTPF members, which are covered by current Fund assets.

A funded ratio of 100% means that all of the benefits earned to date by CTPF members are covered by assets.

By monitoring changes in the funded ratio each year we can determine whether or not funding progress is being made.
Below is a comparison of funded ratios determined on a market value basis and an actuarial value basis over the last 10 years.

Appropriation Requirements under P.A.

90-0655, P.A.

91-0357, P.A.

96-0889, and P.A.

100-0465 The law governing the Fund under P.A.


96-0889 provides that: For fiscal years 2014 through 2059, the minimum contribution to the Fund to be made by the Board of Education in each fiscal year shall be an amount determined by the Fund to be sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2059.
In making these determinations, the required Board of Education contribution shall be calculated each year as a level percentage of the applicable employee payrolls over the years remaining to and including fiscal year 2059 and shall be determined under the Projected Unit Credit actuarial cost method.
Beginning in fiscal year 2060, the minimum Board of Education contribution for each fiscal year shall be the amount needed to maintain the total assets of the Fund at 90% of the total actuarial liabilities of the Fund.

The above calculation provides the basis for calculating the appropriation requirements under P.A.

96-0889.

Beginning in State fiscal year 1999, P.A.


90-0655 provides additional State contributions of 0.544% of the Fund’s total teacher payroll to the Fund to offset the portion of the cost of benefit increases enacted under P.A.

90-0582, except that no additional contributions are required if the Board has certified in the previous fiscal year that the Fund is at least 90% funded.

Pursuant to P.A.
Pursuant to P.A.

91-0357, beginning on and after July 1, 1999, the Board of Education shall make additional contributions of 0.58% of the Fund’s total teacher payroll to the Fund to offset the portion of the cost of benefit increases enacted under P.A.

90-0582, except that no additional contributions are required if the Board has certified in the previous fiscal year that the Fund is at least 90% funded.

94 | Actuarial | Pursuant to P.A.


100-0465, beginning with fiscal year 2018, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance reimbursement subsidy.

In addition, the Board of Education’s property tax levy capped rate was increased from 0.383% to 0.567 percent, with proceeds dedicated solely for CTPF.
According to Section 17-129(b)(vii) of the Illinois Pension Code, any contribution by the State to or for the benefit of the Fund, shall be a credit against any contribution required to be made by the Board of Education.

Employer Contribution Requirement for Fiscal Year 2021 The funded ratio as of the June 30, 2019, actuarial valuation on an actuarial value basis is 47.4 percent.

Therefore, additional contributions by the Board of Education and State will be required for fiscal year 2021.
The projected payroll for fiscal year 2021 is $2,267,106,915.
Based on the projected payroll for fiscal year 2021, and the additional State and Board of Education contribution rates of 0.544% and 0.58% of payroll, respectively, the additional State and Board of Education contributions for fiscal year 2021 are as follows: $ $ $ $ $ $ $ $ $ $ $ $ Development of Additional Contributions under Section 17-127 and 17-127.2 of the Illinois Pension Code Fiscal Year 2021 Fiscal Year 2020 Projected Total Capped Payroll 2,267,106,915 2,180,577,527 Additional State Contributions Under Section 17-127 of the Illinois Pension Code (% of Projected Capped Payroll) Additional Board of Education Contributions Under Section 17-127.2 of the Illinois Pension Code (% of Projected Capped Payroll) 12,333,000 11,862,000 0.544% 0.544% 13,149,000 $ 12,647,000 0.580% 0.580% Pursuant to P.A.
100-0465, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance reimbursement subsidy.

The following table provides the development of the State contribution requirement under P.A.
100-0465: Development of Normal Cost State Contributions under Section 17-127(d)(1) of the Illinois Pension Code Fiscal Year 2021 Fiscal Year 2020* Total Normal Cost Projected Administrative Expenses Total Normal Cost Including Administrative Expenses Expected Employee Contributions Employer Normal Cost Health Insurance Subsidy 364,412,000 29,188,000 393,600,000 204,040,000 189,560,000 65,000,000 355,394,000 27,600,000 382,994,000 198,275,000 184,719,000 65,000,000 State Contributions Under Section 17-127(d)(1) of the Illinois Pension Code 254,560,000 $ 249,719,000 *Fiscal year 2020 numbers are presented for illustrative and comparative purposes only.
They are only used to develop the Actuarially Determined Contribution (ADC).

Pursuant to P.A.

96-0889, the Board of Education contribution requirement in each fiscal year shall be an amount determined by the Fund to be sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2059.
In making these determinations, the required Board of Education contribution shall be calculated each year as a level percentage of the applicable employee payrolls over the years remaining to and including fiscal year 2059 and shall be determined under the Projected Unit Credit actuarial cost method.
Based on the funding projections provided in Section D of this report, the Board of Education’s required contribution for fiscal year 2021 is equal to $605,852,000, (net of Additional State and Board of Education Contributions).

Pursuant to P.A.

100-0465, beginning with fiscal year 2018, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance reimbursement subsidy.
In addition, the Board of Education’s property tax levy capped rate was increased from 0.383% to 0.567 percent, with proceeds dedicated solely for CTPF.

According to Section 17-129(b)(vii) of the Illinois Pension Code, any contribution by the State to or for the benefit of the Fund, shall be a credit against any contribution required to be made by the Board of Education.
Employer Contribution Requirement for Fiscal Year 2021 The funded ratio as of the June 30, 2019, actuarial valuation on an actuarial value basis is 47.4 percent.

Therefore, additional contributions by the Board of Education and State will be required for fiscal year 2021.

The projected payroll for fiscal year 2021 is $2,267,106,915.
Based on the projected payroll for fiscal year 2021, and the additional State and Board of Education contribution rates of 0.544% and 0.58% of payroll, respectively, the additional State and Board of Education contributions for fiscal year 2021 are as follows: Development of Additional Contributions under Section 17-127 and 17-127.2 of the Illinois Pension Code Projected Total Capped Payroll Additional State Contributions Under Section 17-127 of the Illinois Pension Code (% of Projected Capped Payroll) Additional Board of Education Contributions Under Section 17-127.2 of the Illinois Pension Code (% of Projected Capped Payroll) Fiscal Year 2021 Fiscal Year 2020 2,267,106,915 12,333,000 0.544% $ $ 2,180,577,527 11,862,000 0.544% 13,149,000 $ 12,647,000 0.580% 0.580% $ $ $ Pursuant to P.A.
100-0465, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the retiree health insurance reimbursement subsidy.

The following table provides the development of the State contribution requirement under P.A.
100-0465: Development of Normal Cost State Contributions under Section 17-127(d)(1) of the Illinois Pension Code Total Normal Cost Projected Administrative Expenses Total Normal Cost Including Administrative Expenses Expected Employee Contributions Employer Normal Cost Health Insurance Subsidy State Contributions Under Section 17-127(d)(1) of the Illinois Pension Code Fiscal Year 2021 Fiscal Year 2020* $ $ $ $ 364,412,000 29,188,000 393,600,000 204,040,000 189,560,000 65,000,000 $ $ $ 355,394,000 27,600,000 382,994,000 198,275,000 184,719,000 65,000,000 254,560,000 $ 249,719,000 *Fiscal year 2020 numbers are presented for illustrative and comparative purposes only.
They are only used to develop the Actuarially Determined Contribution (ADC).

Pursuant to P.A.

96-0889, the Board of Education contribution requirement in each fiscal year shall be an amount determined by the Fund to be sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2059.
In making these determinations, the required Board of Education contribution shall be calculated each year as a level percentage of the applicable employee payrolls over the years remaining to and including fiscal year 2059 and shall be determined under the Projected Unit Credit actuarial cost method.
Based on the funding projections provided in Section D of this report, the Board of Education’s required contribution for fiscal year 2021 is equal to $605,852,000, (net of Additional State and Board of Education Contributions).
| Actuarial | 95 The fiscal year ending June 30, 2020, and June 30, 2021, certified contribution requirements and projected future year required contribution amounts are shown below: Method of Calculation for Appropriation Requirements Fiscal Year Ending June 30 Required Board of Education Contributions Additional Board of Education Contributions Additional State Contributions State Contributions Pursuant to P.A.
100-0465 Total Required Employer Contributions 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 $ 584,504,000 $ 12,647,000 $ 11,862,000 $ 245,487,000 $ The following graph details the projected employer contribution requirements by Source for fiscal years 2020 through 2059.
The actuarial valuation results are based on the Projected Unit Credit actuarial cost method, the data provided and actuarial assumptions used for the June 30, 2019 actuarial valuation.

In order to determine projected contribution amounts, the following additional assumptions were used: • Total employer contributions of $854,500,000 for fiscal year 2020.

• Administrative expenses of $26,099,731 for fiscal year 2019, as provided by the Fund.
Administrative expenses are assumed to increase 5.75% annually for the first 15 years and then increase in line with projected capped payroll after 15 years.

• New entrants whose average age is 32.22 and average pay is $48,984 (2019 dollars).

• The active member population is assumed to remain level at 29,437 (includes 142 expected new hires) for all years of the 40-year projection.
The projection is based on assuming that new active members are hired to replace the current members who leave active membership (through termination, retirement, death or disability).

As shown in Table 12 on page 42, the number of active members decreased by about 10% between 2008 and 2017, which is an average annualized decrease of about 1.0 percent.

The number of actives increased in 2018 by less than 1.0% and increased again in 2019 by 1.2 percent.
We will continue to review the assumption regarding the projected active member population annually.

• Projected benefits for members hired on or after January 1, 2011, are based on the new provisions established in P.A.

96-0889.

• Additional State contributions of 0.544% of pay are assumed to occur mid-year.

• State contributions of the employer’s normal cost (includes administrative expenses and $65 million health insurance subsidy) are assumed to occur mid-year.
• Additional Board of Education contributions of 0.58% of pay are assumed to occur end of year.

increase 3% per year.

• 55% of the Board of Education’s previous year’s special tax levy is assumed to occur March 1st each year.

This amount is equal to $180,612,283 in fiscal year 2020 and is assumed to • The remaining Board of Education required contribution is assumed to occur end of year.

The average increase in total uncapped payroll for the 40-year projection period is approximately 3.00% per year.
It is important to note that benefits for new hires are based on capped payroll which is ultimately projected to grow at 1.25% per year.

All results in this actuarial valuation assume that employer contributions will be made on capped pay.

Recommendations and Future Considerations Measuring the statutory contribution against a policy such as the Actuarially Determined Contribution (“ADC”) helps evaluate the funding adequacy of the current statutory funding method.
Therefore, the Board adopted a policy to calculate the ADC.

Under this policy, the ADC is calculated as the Normal Cost plus a 30-year level percent of payroll closed-period amortization of the Unfunded Accrued Liability as of June 30, 2013.

The remaining amortization period as of June 30, 2019, actuarial valuation is 24 years.

A key objective of the ADC is to accrue costs over the working lifetime of plan members to ensure that benefit obligations are satisfied and intergenerational equity is promoted.
Although the ADC is solely an accounting provision, in certain circumstances it could represent a reasonable annual funding target and therefore is used by some plan sponsors as their “de facto” funding requirement.

Note that the statutory funding policy differs significantly from the ADC approach, and results in “back-loading,” meaning that contributions are deferred into the future.

Back-loading could result in an underfunding of the fund.
96 | Actuarial | Method of Calculation for Appropriation Requirements The actuarial valuation results are based on the Projected Unit Credit actuarial cost method, the data provided and actuarial assumptions used for the June 30, 2019 actuarial valuation.

In order to determine projected contribution amounts, the following additional assumptions were used: • Total employer contributions of $854,500,000 for fiscal year 2020.
• Administrative expenses of $26,099,731 for fiscal year 2019, as provided by the Fund.

Administrative expenses are assumed to increase 5.75% annually for the first 15 years and then increase in line with projected capped payroll after 15 years.

• New entrants whose average age is 32.22 and average pay is $48,984 (2019 dollars).

• The active member population is assumed to remain level at 29,437 (includes 142 expected new hires) for all years of the 40-year projection.
The projection is based on assuming that new active members are hired to replace the current members who leave active membership (through termination, retirement, death or disability).

As shown in Table 12 on page 42, the number of active members decreased by about 10% between 2008 and 2017, which is an average annualized decrease of about 1.0 percent.

The number of actives increased in 2018 by less than 1.0% and increased again in 2019 by 1.2 percent.
We will continue to review the assumption regarding the projected active member population annually.

• Projected benefits for members hired on or after January 1, 2011, are based on the new provisions established in P.A.

96-0889.

• Additional State contributions of 0.544% of pay are assumed to occur mid-year.

• State contributions of the employer’s normal cost (includes administrative expenses and $65 million health insurance subsidy) are assumed to occur mid-year.
• Additional Board of Education contributions of 0.58% of pay are assumed to occur end of year.

• 55% of the Board of Education’s previous year’s special tax levy is assumed to occur March 1st each year.

This amount is equal to $180,612,283 in fiscal year 2020 and is assumed to increase 3% per year.

• The remaining Board of Education required contribution is assumed to occur end of year.

The average increase in total uncapped payroll for the 40-year projection period is approximately 3.00% per year.
It is important to note that benefits for new hires are based on capped payroll which is ultimately projected to grow at 1.25% per year.

All results in this actuarial valuation assume that employer contributions will be made on capped pay.

Recommendations and Future Considerations Measuring the statutory contribution against a policy such as the Actuarially Determined Contribution (“ADC”) helps evaluate the funding adequacy of the current statutory funding method.
Therefore, the Board adopted a policy to calculate the ADC.

Under this policy, the ADC is calculated as the Normal Cost plus a 30-year level percent of payroll closed-period amortization of the Unfunded Accrued Liability as of June 30, 2013.

The remaining amortization period as of June 30, 2019, actuarial valuation is 24 years.

A key objective of the ADC is to accrue costs over the working lifetime of plan members to ensure that benefit obligations are satisfied and intergenerational equity is promoted.
Although the ADC is solely an accounting provision, in certain circumstances it could represent a reasonable annual funding target and therefore is used by some plan sponsors as their “de facto” funding requirement.

Note that the statutory funding policy differs significantly from the ADC approach, and results in “back-loading,” meaning that contributions are deferred into the future.

Back-loading could result in an underfunding of the fund.
| Actuarial | 97 The ADC for fiscal years 2019 and 2020, as well as the statutory employer contribution for fiscal years 2019 and 2020, are shown below as a percentage of projected capped payroll.

The ADC for 2019 and statutory employer contribution for 2020 are based on the results of the June 30, 2018, actuarial valuation.

Actuarial Valuation Date: June 30, 2019 June 30, 2018 Actuarially Determined Contributions for Fiscal Year Ending: June 30, 2020 June 30, 2019 1.

Actuarial Accrued Liability 2.


Actuarial Value of Assets 3.

Unfunded Actuarial Accrued Liability [1 - 2] 4.

Employer Normal Cost (Including Administrative Expenses and Health Insurance Subsidy) 5.

Employer Normal Cost Adjusted for Contribution Timing 6.

Amount to Amortize the Unfunded Liability over a 30-year Closed-period, Beginning July 1, 2013, as a Level Percentage of Payroll 7.

Actuarially Determined Contribution Requirement [5 + 6] 8.

Projected Capped Payroll for Fiscal Year 9.


Actuarially Determined Contribution as a Percentage of Projected Capped Payroll $ 23,252,163,307 $ 22,922,992,558 $ 11,021,811,634 $ 10,969,085,523 $ 12,230,351,673 $ 11,953,907,035 $ $ $ $ $ 249,719,842 254,477,830 892,552,681 1,147,030,511 2,203,055,500 $ $ $ $ $ 240,527,902 245,621,046 851,548,985 1,097,170,031 2,118,062,176 52.07% 51.80% 10.

Total Required Employer Contribution Including Health Insurance Subsidy $ 854,500,000 $ 808,570,000 11.
Total Required Employer Contribution as a Percentage of Projected Capped Payroll [10 / 8] 12.
Total Required Employer Contribution as a Percentage of Actuarially Determined Contribution [10 / 7] 38.79% 38.17% 74.50% 73.70% The fiscal year 2020 Actuarially Determined Contribution is based on an amortization factor which reflects 24 years remaining in the amortization period, an interest rate of 7.00 percent, an annualized assumed rate of increase in total capped payroll of 2.20 percent (which is consistent with the projected increase in total payroll from the projections used to calculate the statutory contribution requirements).
The Employer Normal Cost and Amortization Payment are adjusted for expected contribution timing.

The following graph compares the projected benefits and expenses against employer contributions, employee contributions and investment income.

From 2020 to 2059, the percentage of investment income needed to pay ongoing benefits decreases from 77.8% to 24.8 percent.
This implies that a lower level of investment income is projected to be available for potential asset growth in the beginning of the projection period.

The statutory funding policy required for CTPF provides for level percent of pay funding that produces a funding target of 90% by 2059, assuming an open group projection.

The following graph shows the projected funded ratio.

A key observation is that the funded ratio does not grow markedly until after 2039.
That is, a majority of the funding occurs between 2040 and 2059.

This illustrates how significantly the current funding policy defers or back loads contributions into the future.

98 | Actuarial | *Future dollar amounts are based on assumed inflationary increases.

The following graph compares the projected benefits and expenses against employer contributions, employee contributions and investment income.
From 2020 to 2059, the percentage of investment income needed to pay ongoing benefits decreases from 77.8% to 24.8 percent.

This implies that a lower level of investment income is projected to be available for potential asset growth in the beginning of the projection period.

*Future dollar amounts are based on assumed inflationary increases.
| Actuarial | 99 Number of Projected Future Active Members The total required employer contribution is based on performing an open group projection through the year 2059.

The projection is based on assuming that new active members are hired to replace the current members who leave active membership (through termination, retirement, death or disability).
As shown in Table 12 on page 42, the number of active members decreased by about 10% between 2008 and 2017, which is an average annualized decrease of about 1.0 percent.

The number of actives increased in 2018 by less than 1.0% and increased again in 2019 by 1.2 percent.

Currently, the actuarial valuation assumes that the total number of active members in the future will be equal to the number active in the current actuarial valuation.
Although there is only two years of experience where the number of active members has increased, we believe that it is reasonable to maintain the current level future active member population assumption, but continue to annually monitor the number of active members in the coming years.
Given the decrease in the number of active members between 2008 and 2017, if future valuations show additional declines in the active population, the Board may want to consider an update to the population projection assumption to include a decreasing population in the near term before reaching an equilibrium number of active members long term.

We are concerned about potential cash flow problems for CTPF.
This is because the assets in the plan ($11,038.8 million on a market value basis) are not sufficient to cover current retiree liabilities ($16,996.7 million) and the ratio of market value of assets to retiree benefit payments and expenses is approximately 7.3.
This means that approximately seven to eight years of retiree benefit payments can be paid from current assets; the ability to make such payments beyond that period is heavily dependent upon future employer contributions and future investment return.

The calculations in this report were prepared based on the methods required by the statutory funding policy.
GRS does not endorse this funding policy because the statutory funding policy defers funding for these benefits into the future and places a higher burden on future generations of taxpayers.

We recommend the following changes: 1.

Implementing a funding policy that contributes normal cost plus closed period amortization as a level percentage of capped payroll amortization of the unfunded liability.
(A policy which recognizes the unfunded liability at the valuation date and not a projected liability in the year 2059.)

2.

Changing the actuarial cost method for calculating liabilities from the Projected Unit Credit to the Entry Age Normal method.
Change Funding Policy to a More Actuarially Sound Funding Method We recommend a funding policy that contributes normal cost plus closed period amortization as a level percentage of capped payroll for paying off the current unfunded accrued liability (i.e., the amortization period declines by one year with each actuarial valuation) such that the funded ratio is projected to be 100% funded in 30 years or sooner.
A 30-year closed amortization period (at the actuarial valuation as of June 30, 2013) methodology pays off the unfunded accrued liability in full by the end of the 30-year period in 2043.

The fiscal year 2020 contribution would be $1,147.03 million under this funding policy.

The current statutory contribution does not comply with this recommendation.
Underfunding the Fund creates the risk that ultimately benefit obligations cannot be met from the trust, and will require a greater amount of funding from other City and State resources.

In addition, continually underfunding the Fund also creates more of a funding need from contributions and less is available from investment return - thereby creating a more expensive plan.
Change the Actuarial Cost Method to the Entry Age Normal Method The current actuarial cost method is the Projected Unit Credit method, which is required by statute.

The Projected Unit Credit method recognizes costs such that the normal cost for an individual member increases as a percentage of payroll throughout his/her career.

The Entry Age Normal cost method is the most commonly used method in the public sector.

It is also the method required to be used for financial reporting under GASB Statement Nos.
67 and 68.

The Entry Age Normal method recognizes costs as a level percentage of payroll over a member’s career.

We recommend a change to the Entry Age Normal method.

We recognize that the State Statute governs the funding policy of the Fund.

The purpose of these comments is to highlight the difference between the statutory appropriation methodology and an actuarially sound funding policy and to highlight the risks and additional costs of continuing to underfund the Fund.
Future Considerations Changes (such as the addition of a new benefit tier and delaying the 90% funding target year from 2045 to 2059) have had the effect of reducing the statutory contribution amounts that would have otherwise been made.

However, recent changes in the investment return assumption and other demographic assumption changes to more closely align the actuarial assumptions with current market expectations have increased the contribution amounts that would otherwise have been made.
Assuming the statutory contributions are received (and the actuarial assumptions are met including a 7.00% investment rate of return, each year through 2059) CTPF is currently projected to have contributions sufficient to increase the funded ratio from the current level of 47.4% to 90.0% by 2059.
This is a severely underfunded plan and the ability of the plan to reach 90% funding by 2059 is heavily dependent on the State and the Board of Education contributing the statutory contributions each and every year until 2059.

Actuarial standards do not require the actuary to evaluate the ability of the plan sponsor or other contributing entity to make required contributions to the plan when due.
Such an evaluation was not within the scope of this project and is not within the actuary’s domain of expertise.

Consequently, we are not able to assess the ability of the State and/or the Board of Education to make contributions when due.

100 | Actuarial | Number of Projected Future Active Members The total required employer contribution is based on performing an open group projection through the year 2059.
The projection is based on assuming that new active members are hired to replace the current members who leave active membership (through termination, retirement, death or disability).

As shown in Table 12 on page 42, the number of active members decreased by about 10% between 2008 and 2017, which is an average annualized decrease of about 1.0 percent.

The number of actives increased in 2018 by less than 1.0% and increased again in 2019 by 1.2 percent.
Currently, the actuarial valuation assumes that the total number of active members in the future will be equal to the number active in the current actuarial valuation.

Although there is only two years of experience where the number of active members has increased, we believe that it is reasonable to maintain the current level future active member population assumption, but continue to annually monitor the number of active members in the coming years.
Given the decrease in the number of active members between 2008 and 2017, if future valuations show additional declines in the active population, the Board may want to consider an update to the population projection assumption to include a decreasing population in the near term before reaching an equilibrium number of active members long term.

| Actuarial | 101 Actuarial Standards of Practice (ASOP) No.
4 Disclosures General Implications of Contribution Allocation Procedure or Funding Policy on Future Expected Plan Contributions and Funded Status Given the plan’s contribution allocation procedure, if all actuarial assumptions are met (including the assumption of the plan earning 7.00% on the actuarial value of assets), it is expected that: 1.
The combined State and BOE contribution rate will be level as a percentage of payroll through 2059 (after all deferred asset gains and losses are fully recognized); 2.

The unfunded liability will increase in dollar amount through 2039 before it begins to decrease; 3.

The unfunded actuarial accrued liabilities will never be fully amortized; and 4.

The funded status of the plan will increase gradually towards a 90% funded ratio in 2059.
Limitations of Funded Status Measurements Unless otherwise indicated, a funded status measurement presented in this report is based upon the actuarial accrued liability and the actuarial value of assets.

Unless otherwise indicated, with regard to any funded status measurements presented in this report: 1.
The measurement is inappropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan’s benefit obligations, in other words of transferring the obligations to a unrelated third party in an arm’s length market value type transaction.

anticipated.

2.

The measurement is dependent upon the actuarial cost method which, in combination with the plan’s amortization policy, affects the timing and amounts of future contributions.
The amounts of future contributions will most certainly differ from those assumed in this report due to future actual experience differing from assumed experience based upon the actuarial assumptions.

The statutory contribution for fiscal year 2021 shown on page 8 should be considered as the minimum contribution that complies with the funding policy governed by State statute (Section 17-129(b)(vi) of the Illinois Pension Code).
The timely receipt of the statutory contribution is critical to support the financial health of the Fund.

Users of this report should be aware that contributions made at the statutorily determined amount do not necessarily guarantee 3.

A funded status measurement in this report of 100% is not synonymous with no required future contributions.
If the funded status were 100 percent, the plan would still require future normal cost contributions (i.e., contributions to cover the cost of the active membership accruing an additional year of service credit).

4.

The measurement would produce a different result if the market value of assets were used instead of the actuarial value of assets.
Limitation of Project Scope Actuarial standards do not require the actuary to evaluate the ability of the plan sponsor or other contributing entity to make required contributions to the plan when due.

Such an evaluation was not within the scope of this project and is not within the actuary’s domain of expertise.

Consequently, the actuary performed no such evaluation.
Risks Associated with Measuring the Accrued Liability and Total Required Employer Contribution The determination of the accrued liability and the total required employer contribution requires the use of actuarial assumptions regarding future economic and demographic experience.

Risk measures, as illustrated in this report, are intended to aid in the understanding of the effects of future experience differing from the actuarial assumptions used in the course of the actuarial valuation.
Risk measures may also help with illustrating the potential volatility in the accrued liability and the total required employer contribution that result from the differences between actual experience and the actuarial assumptions.
Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions due to changing conditions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period, or additional cost or contribution requirements based on the Fund’s funded status); and changes in plan provisions or applicable law.
The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements.

102 | Actuarial | Examples of risk that may reasonably be anticipated to significantly affect the Fund’s future financial condition include: 1.

Investment risk - actual investment returns may differ from the expected returns; 2.
Asset/Liability mismatch - changes in asset values may not match changes in liabilities, thereby altering the gap between the accrued liability and assets and consequently altering the funded status and contribution requirements; 3.

Contribution risk - actual contributions may differ from expected future contributions.
For example, actual contributions may not be made in accordance with the Fund’s funding policy or material changes may occur in the anticipated number of covered employees, covered payroll or other relevant contribution base; 4.

Salary and Payroll risk - actual salaries and total payroll may differ from expected, resulting in actual future accrued liability and contributions differing from expected; 5.
Longevity risk - members may live longer or shorter than expected and receive pensions for a period of time other than assumed; and 6.

Other demographic risks - members may terminate, retire or become disabled at times or with benefits other than assumed resulting in actual future accrued liability and contributions differing from expected.

The effects of certain trends in experience can generally be anticipated.
For example if the investment return since the most recent actuarial valuation is less (or more) than the assumed rate, the cost of the plan can be expected to increase (or decrease).

Likewise if longevity is improving (or worsening), increases (or decreases) in cost can be benefit security.

Plan Maturity Measures Risks facing a pension plan evolve over time.

A young plan with virtually no investments and paying few benefits may experience little investment risk.
An older plan with a large number of members in pay status and a significant trust may be much more exposed to investment risk.

Generally accepted plan maturity measures include the following: Ratio of the Market Value of Assets to Payroll Ratio of Actuarial Accrued Liability to Payroll Ratio of Actives to Retirees and Beneficiaries 2019 5.02 10.58 1.03 2018 5.26 10.85 1.01 Ratio of Net Cash Flow to Market Value of Assets (5.25)% (5.27)% Ratios exclude inactive members not receiving benefits.
Ratio of Market Value of Assets to Payroll The relationship between assets and payroll is a useful indicator of the potential volatility of contributions.

For example, if the market value of assets is 5.0 times the payroll, a return on assets 5% different than assumed would equal 25% of payroll.

A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in plan sponsor contributions as a percentage of payroll.
Ratio of Actuarial Accrued Liability to Payroll The relationship between actuarial accrued liability and payroll is a useful indicator of the potential volatility of contributions for a fully funded plan.

A funding policy that targets a funded ratio of 100% is expected to result in the ratio of assets to payroll and the ratio of liability to payroll converging over time.

Examples of risk that may reasonably be anticipated to significantly affect the Fund’s future financial condition include: 1.
Investment risk - actual investment returns may differ from the expected returns; 2.

Asset/Liability mismatch - changes in asset values may not match changes in liabilities, thereby altering the gap between the accrued liability and assets and consequently altering the funded status and contribution requirements; 3.

Contribution risk - actual contributions may differ from expected future contributions.
For example, actual contributions may not be made in accordance with the Fund’s funding policy or material changes may occur in the anticipated number of covered employees, covered payroll or other relevant contribution base; 4.

Salary and Payroll risk - actual salaries and total payroll may differ from expected, resulting in actual future accrued liability and contributions differing from expected; 5.
Longevity risk - members may live longer or shorter than expected and receive pensions for a period of time other than assumed; and 6.

Other demographic risks - members may terminate, retire or become disabled at times or with benefits other than assumed resulting in actual future accrued liability and contributions differing from expected.

The effects of certain trends in experience can generally be anticipated.
For example if the investment return since the most recent actuarial valuation is less (or more) than the assumed rate, the cost of the plan can be expected to increase (or decrease).

Likewise if longevity is improving (or worsening), increases (or decreases) in cost can be anticipated.
The statutory contribution for fiscal year 2021 shown on page 8 should be considered as the minimum contribution that complies with the funding policy governed by State statute (Section 17-129(b)(vi) of the Illinois Pension Code).

The timely receipt of the statutory contribution is critical to support the financial health of the Fund.

Users of this report should be aware that contributions made at the statutorily determined amount do not necessarily guarantee benefit security.
Plan Maturity Measures Risks facing a pension plan evolve over time.

A young plan with virtually no investments and paying few benefits may experience little investment risk.

An older plan with a large number of members in pay status and a significant trust may be much more exposed to investment risk.
Generally accepted plan maturity measures include the following: Ratio of the Market Value of Assets to Payroll Ratio of Actuarial Accrued Liability to Payroll Ratio of Actives to Retirees and Beneficiaries 2019 5.02 10.58 1.03 2018 5.26 10.85 1.01 Ratio of Net Cash Flow to Market Value of Assets (5.25)% (5.27)% Ratios exclude inactive members not receiving benefits.
Ratio of Market Value of Assets to Payroll The relationship between assets and payroll is a useful indicator of the potential volatility of contributions.

For example, if the market value of assets is 5.0 times the payroll, a return on assets 5% different than assumed would equal 25% of payroll.

A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in plan sponsor contributions as a percentage of payroll.
Ratio of Actuarial Accrued Liability to Payroll The relationship between actuarial accrued liability and payroll is a useful indicator of the potential volatility of contributions for a fully funded plan.

A funding policy that targets a funded ratio of 100% is expected to result in the ratio of assets to payroll and the ratio of liability to payroll converging over time.

| Actuarial | 103 The ratio of liability to payroll may also be used as a measure of sensitivity of the liability itself.
For example, if the actuarial accrued liability is 11 times the payroll, a change in liability 2% other than assumed would equal 22% of payroll.

A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in liability (and also plan sponsor contributions) as a percentage of payroll.
Ratio of Actives to Retirees and Beneficiaries A young plan with many active members and few retirees will have a high ratio of active to retirees.

A mature open plan may have close to the same number of actives to retirees resulting in a ratio near 1.0.

A super-mature or closed plan may have significantly more retirees than actives resulting in a ratio below 1.0.

Ratio of Net Cash Flow to Market Value of Assets A positive net cash flow means contributions exceed benefits and expenses.
A negative cash flow means existing funds are being used to make payments.

A certain amount of negative net cash flow is generally expected to occur when benefits are prefunded through a qualified trust.

Large negative net cash flows as a% of assets may indicate a super-mature plan or a need for additional contributions.

Additional Risk Assessment Additional risk assessment is outside the scope of the annual actuarial valuation.
Additional assessment may include scenario tests, sensitivity tests, stochastic modeling, stress tests and a comparison of the present value of accrued benefits at low-risk discount rates with the actuarial accrued liability.

At the Board’s request, we conducted additional risk assessment of investment and contribution risk through stress testing the investment return assumption and future active population growth.
SECTION C: ACTUARIAL DETERMINATIONS ____________________________________________________________________________________________ Table 1: Results of Actuarial Valuation as of June 30, 2019 1.

Number of Members a.

Active b. Inactive: i.

Eligible for deferred vested pension benefits ii.

Eligible for return of contributions only c. Current Benefit Recipients: a.

As of the Actuarial Valuation Date b.

Projected Capped Payroll for Fiscal Year 2019 c. Projected Capped Payroll for Fiscal Year 2020 3.
Annualized Benefit Payments Currently Being Made i.

Retirement annuities ii.

Survivor annuities iii.

Disability annuities d. Total 2.

Covered Payroll a.

Retirement annuities b.

Survivor annuities c. Disability annuities d. Total i.

Retirement annuities ii.

Survivor annuities iii.

Disability annuities b.

Total 4.

Actuarial Accrued Liability - Annuitants a.

Current Benefit Recipients: 5.

Actuarial Accrued Liability - Inactive Members a.

Eligible for Deferred Vested Pension Benefits b.


Eligible for Return of Contributions Only c. Total 29,295 9,926 20,621 24,631 3,217 469 88,159 2,196,918,127 2,203,055,500 2,267,106,915 1,373,459,588 77,424,498 18,158,456 1,469,042,542 16,102,437,924 692,161,536 202,115,317 16,996,714,777 449,280,620 86,869,126 536,149,746 $ $ $ $ $ $ $ Active count excludes 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
104 | Actuarial | SECTION C: ACTUARIAL DETERMINATIONS ____________________________________________________________________________________________ Table 1: Results of Actuarial Valuation as of June 30, 2019 1.

Number of Members a.

Active b. Inactive: i.

Eligible for deferred vested pension benefits ii.

Eligible for return of contributions only c. Current Benefit Recipients: i.

Retirement annuities ii.

Survivor annuities iii.

Disability annuities d. Total 2.

Covered Payroll a.
Covered Payroll a.

As of the Actuarial Valuation Date b.

Projected Capped Payroll for Fiscal Year 2019 c. Projected Capped Payroll for Fiscal Year 2020 3.

Annualized Benefit Payments Currently Being Made a.

Retirement annuities b.

Survivor annuities c. Disability annuities d. Total 4.

Actuarial Accrued Liability - Annuitants a.

Current Benefit Recipients: i.

Retirement annuities ii.

Survivor annuities iii.

Disability annuities b.

Total 5.

Actuarial Accrued Liability - Inactive Members a.


Eligible for Deferred Vested Pension Benefits b.


Eligible for Return of Contributions Only c. Total 29,295 9,926 20,621 24,631 3,217 469 88,159 2,196,918,127 2,203,055,500 2,267,106,915 1,373,459,588 77,424,498 18,158,456 1,469,042,542 16,102,437,924 692,161,536 202,115,317 16,996,714,777 449,280,620 86,869,126 536,149,746 $ $ $ $ $ $ $ Active count excludes 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
| Actuarial | 105 Table 1: Results of Actuarial Valuation (Continued) as of June 30, 2019 Table 2: Components of Actuarial Accrued Liability and Normal Cost by Tier 6.

Active Members a.

Retirement Benefits b.

Withdrawal c. Death Benefits d. Disability e. Administrative Expenses f. Total 7.

Total Actuarial Accrued Liability (4 + 5 + 6) 8.

Market Value of Assets (MVA) 9.

Unfunded Actuarial Accrued Liability Based on MVA (7 - 8) 10.

Funded Percentage Based on MVA (8 ÷ 7)a 11.


Actuarial Value of Assets (AVA) 12.

Unfunded Actuarial Accrued Liability Based on AVA (7 - 11) 13.

Funded Percentage Based on AVA (11.

÷ 7.

)a 14.

Total Normal Cost 15.

Expected Employee Contributions 16.

Annual Employer Normal Cost (% of Projected Capped Payroll for Fiscal Year 2019) 17.

Health Insurance Subsidy 18.


Annual Employer Normal Cost, including Health Insurance Reimbursement (16 + 17) (% of Projected Capped Payroll for Fiscal Year 2019)b Normal Cost Actuarial Accrued Liability $ 271,774,168 $ 4,852,667,787 Actuarial Valuation Results 1.

Count Tier 1 18,632 Tier 2a 10,663 Total 29,295 b.

Projected Capped Payroll for Fiscal Year 2019 c. Projected Capped Payroll for Fiscal Year 2020 1,611,924,815 1,583,323,050 591,130,684 683,783,865 1,611,924,815 $ 584,993,311 $ 4.
Normal Cost Amount Amount Amount a.
Retirement Benefits $ 256,620,461 15.92% $ 15,153,707 2.56 % $ 271,774,168 5,556,940,872 $ 162,357,912 $ 5,719,298,784 $ $ $ 4,787,616,390 $ 65,051,397 $ 617,643,241 65,535,687 86,145,554 % of Payroll 2.95% 0.25% 0.34% 1.25% 47,573,316 3,964,802 5,440,011 20,194,623 24,183,388 948,974 1,509,712 7,405,842 86,682,523 3,932,808 6,691,184 % of Payroll 4.09 % 0.16 % 0.26 % 1.25 % 2,196,918,127 2,203,055,500 2,267,106,915 4,852,667,787 704,325,764 69,468,495 92,836,738 % of Payroll 12.34% 3.26% 0.23% 0.32% 1.25% 71,756,704 4,913,776 6,949,723 27,600,466 2.
Covered Payroll a.

As of the Valuation Date 3.

Actuarial Accrued Liability a.

Retirement Benefits b.

Withdrawal c. Death Benefits d. Disability e. Total b.

Withdrawal c. Death Benefits d. Disability e. Administrative Expenses f. Total 5.

Expected Employer Contributions $ 145,073,233 9.00% $ 53,201,763 9.00 % $ 198,274,996 9.00% $ 333,793,213 20.71% $ 49,201,623 8.32 % $ 382,994,837 17.38% 6.
Annual Employer Normal Cost $ 188,719,981 11.71% $ (4,000,139) (0.68)% $ 184,719,842 8.38% aThe actuarial accrued liability, normal cost, projected capped payroll and expected employee contributions include the results for 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.

Active count excludes 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
Actuarial Accrued Liability and Normal Cost are determined under the Projected Unit Credit actuarial cost method.

Normal Cost rates as a percent of pay under the Projected Unit Credit actuarial cost method increase over a member’s career.
704,325,764 69,468,495 92,836,738 — 5,719,298,784 23,252,163,307 11,038,837,459 12,213,325,848 47.47% 11,021,811,634 12,230,351,673 47.40% $ $ $ $ $ $ 71,756,704 4,913,776 6,949,723 27,600,466 $ 382,994,837 $ $ $ $ $ 382,994,837 198,274,995 184,719,842 8.38% 65,000,000 249,719,842 11.34% a The funded status measure is appropriate for assessing the need for future contributions.
The funded status is not appropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan’s benefit obligations.

b Used for calculation of the ADC.

106 | Actuarial | Table 2: Components of Actuarial Accrued Liability and Normal Cost by Tier Actuarial Valuation Results 1.

Count Tier 1 18,632 Tier 2a 10,663 Total 29,295 2.

Covered Payroll a.

As of the Valuation Date b.


Projected Capped Payroll for Fiscal Year 2019 c. Projected Capped Payroll for Fiscal Year 2020 3.

Actuarial Accrued Liability a.

Retirement Benefits b.

Withdrawal c. Death Benefits d. Disability e. Total 4.

Normal Cost a.

Retirement Benefits b.
Withdrawal c. Death Benefits d. Disability e. Administrative Expenses f. Total $ $ $ 1,611,924,815 $ 584,993,311 $ 1,611,924,815 1,583,323,050 591,130,684 683,783,865 4,787,616,390 $ 65,051,397 $ 617,643,241 65,535,687 86,145,554 86,682,523 3,932,808 6,691,184 2,196,918,127 2,203,055,500 2,267,106,915 4,852,667,787 704,325,764 69,468,495 92,836,738 5,556,940,872 $ 162,357,912 $ 5,719,298,784 Amount $ 256,620,461 % of Payroll 15.92% $ 15,153,707 Amount % of Payroll 2.56 % $ 271,774,168 Amount % of Payroll 12.34% 47,573,316 3,964,802 5,440,011 20,194,623 2.95% 0.25% 0.34% 1.25% 24,183,388 948,974 1,509,712 7,405,842 4.09 % 0.16 % 0.26 % 1.25 % 71,756,704 4,913,776 6,949,723 27,600,466 3.26% 0.23% 0.32% 1.25% $ 333,793,213 20.71% $ 49,201,623 8.32 % $ 382,994,837 17.38% 5.
Expected Employer Contributions $ 145,073,233 9.00% $ 53,201,763 9.00 % $ 198,274,996 9.00% 6.

Annual Employer Normal Cost $ 188,719,981 11.71% $ (4,000,139) (0.68)% $ 184,719,842 8.38% aThe actuarial accrued liability, normal cost, projected capped payroll and expected employee contributions include the results for 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
Active count excludes 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.

Actuarial Accrued Liability and Normal Cost are determined under the Projected Unit Credit actuarial cost method.

Normal Cost rates as a percent of pay under the Projected Unit Credit actuarial cost method increase over a member’s career.
| Actuarial | 107 Table 3: Analysis of Change in Unfunded Actuarial Accrued Liability Table 4: Analysis of Financial (Gains) and Losses in Unfunded Actuarial Accrued Liability for Fiscal Year Ending June 30, 2019 1.

Unfunded Actuarial Accrued Liability (UAAL) at 06/30/2019 $ 11,953,907,035 Activity (Gain)/Loss % of June 30, 2019 AAL 2.

Contributions a.

Contributions due (Normal Cost plus interest on the UAAL) i.

Interest on item 1. ii.

Member contributions iii.


Employer normal cost (middle of year) iv.

Interest on ii and iii v. Total due b.

Contributions paid (Actual) i.

Member contributions ii.

Employer iii.

Interest on i and iia iv.

Total paid c. Expected increase in Unfunded Actuarial Accrued Liability 3.

Expected Unfunded Actuarial Accrued Liability at 06/30/2019 4.

(Gains)/Losses a.

Investment income b. Retiree health insurance cash flows c. Salary increases d. Demographic e. Total 5.
Plan Provision Changes 6.

Assumption Changes 7.

Total Change in UAAL 8.

UAAL at 06/30/2019 $ $ $ $ $ $ $ $ $ $ $ $ 836,773,492 190,565,220 240,588,278 14,835,148 1,282,762,138 190,565,220 808,570,000 18,775,610 1,017,910,830 264,851,308 12,218,758,343 98,317,079 (6,608,283) (62,859,630) (17,255,836) 11,593,330 — — 276,444,638 12,230,351,673 aInterest on employer contributions is estimated based on a weighted timing of middle of year, 8/12ths of a year, and end of year.

1.
1.

Actuarial (Gain)/Loss a. Retirements b.

Incidence of Disability c. In-Service Mortality d. Retiree Mortality e. Salary Increases f. Terminations g. Investment Return i.

New Entrant Liability j.

Other k. Total Actuarial (Gain)/Loss 2.

Plan Provision Changes 3.

Assumption Changes h. Retiree Health Insurance Cash Flows 4.

Contribution (Excess)/Shortfalla 5.
Total Financial (Gain)/Loss $ $ $ $ $ $ 1,996,977 (966,542) 123,792 5,854,235 (62,859,630) (46,251,276) 98,317,079 (6,608,283) 44,926,283 (22,939,305) 11,593,330 — — 264,851,308 276,444,638 0.01 % 0.00 % 0.00 % 0.03 % (0.27)% (0.20)% 0.43 % (0.03)% 0.20 % (0.10)% 0.07 % — % — % 1.16 % 1.23 % a Represents the increase in the Unfunded Actuarial Accrued Liability due to actual contributions being less than the Normal Cost plus interest on the beginning of year Unfunded Actuarial Accrued Liability.
108 | Actuarial | Table 4: Analysis of Financial (Gains) and Losses in Unfunded Actuarial Accrued Liability for Fiscal Year Ending June 30, 2019 Activity (Gain)/Loss % of June 30, 2019 AAL 1.

Actuarial (Gain)/Loss a. Retirements b.

Incidence of Disability c. In-Service Mortality d. Retiree Mortality e. Salary Increases f. Terminations g. Investment Return h. Retiree Health Insurance Cash Flows i.

New Entrant Liability j.

Other k. Total Actuarial (Gain)/Loss 2.

Plan Provision Changes 3.


Assumption Changes 4.

Contribution (Excess)/Shortfalla 5.
Total Financial (Gain)/Loss $ $ $ $ $ $ 1,996,977 (966,542) 123,792 5,854,235 (62,859,630) (46,251,276) 98,317,079 (6,608,283) 44,926,283 (22,939,305) 11,593,330 — — 264,851,308 276,444,638 0.01 % 0.00 % 0.00 % 0.03 % (0.27)% (0.20)% 0.43 % (0.03)% 0.20 % (0.10)% 0.07 % — % — % 1.16 % 1.23 % a Represents the increase in the Unfunded Actuarial Accrued Liability due to actual contributions being less than the Normal Cost plus interest on the beginning of year Unfunded Actuarial Accrued Liability.
| Actuarial | 109 Table 5: Historical Financial (Gains) and Losses in Unfunded Actuarial Accrued Liability ____________________________________________________________________________________________ SECTION D: ACTUARIAL PROJECTIONS Amount of (Gain) or Loss FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Total Five- Year Change $ (45,212,951) $ (81,129,490) $ (80,937,857) $ 131,839,730 $ 98,317,079 $ 22,876,511 9,833,404 1,673,226 (17,178,251) 1,381,154 (6,608,283) (10,898,750) Investment Return (AVA Basis) Retiree Health Insurance Cash Flows Salary Increases (79,584,326) (264,801,612) (180,217,505) 6,927,266 (62,859,630) (580,535,807) Table 6: Baseline Projections - Employer Contributions Determined Under Public Act 90-0655, Public Act 91-0357, Public Act 96-0889, and Public Act 100-0465 Investment Return of 7.00% Each Year (Dollars in Millions)* Annual Normal Cost Retirements Terminations Disability Incidence In-Service Mortality 66,015,157 47,235,684 32,846,858 27,778,569 1,996,977 175,873,245 (10,625,923) (6,458,419) (7,478,652) (39,625,292) (46,251,276) (110,439,562) Fiscal Year Actuarial Accrued Liability Actuarial Value of Assets Unfunded Liability Funded Ratio Pensionable Payroll Total Employee Contribution Employer Normal Cost Percent of Pay — — — — (685,126) 657,829 (1,010,548) (966,542) (2,662,216) 1,253,670 123,792 2,035,291 2020 $ 32,886.6 $ 17,301.9 $ 15,584.7 52.61% $ 3,441.4 $ 548.4 $ 309.7 $ 238.7 6.94% Retiree Mortality (28,722,389) 15,811,894 14,544,206 70,809,472 5,854,235 78,297,418 2021 33,292.3 17,766.3 15,526.0 53.36% 3,510.2 546.3 315.9 230.3 6.56% New Entrants Othera Total Actuarial (Gain)/Loss (Gain)/Loss as a % of BOY AAL Total Non- Investment (Gain)/ Loss (Gain)/Loss as a % of BOY AAL (Gain)/Loss Due to Plan Provision Changes (Gain)/Loss as a % of BOY AAL (Gain)/Loss Due to Assumption Changes (Gain)/Loss as a % of BOY AAL $ $ (Gain)/Loss Due to Contribution (Excess)/Shortfall (Gain)/Loss as a % of BOY AAL Total Financial (Gain)/Loss (Gain)/Loss as a % of BOY AAL BOY Actuarial Accrued
 Liability (AAL) — — 32,961,135 38,467,726 44,926,283 116,355,144 2022 33,677.5 18,250.3 15,427.2 54.19% 3,579.4 543.8 322.1 221.7 6.19% 9,963,968 57,480,517 (54,889,992) (28,017,087) (22,939,305) (38,401,899) $ (78,333,060) $ (230,188,200) $ (260,377,355) $ 209,804,660 $ 11,593,330 $ (347,500,625) (0.4)% (1.2)% (1.3)% 1.0% 0.1 % $ (33,120,109) $ (149,058,710) $ (179,439,498) $ 77,964,930 $ (86,723,749) $ (370,377,136) 2026 35,025.6 20,461.1 14,564.5 58.42% 3,882.6 543.3 349.4 193.8 4.99% (0.2)% (0.7)% (0.9)% 0.4% (0.4)% 2027 35,326.7 21,112.4 14,214.3 59.76% 3,966.7 547.1 357.0 190.1 4.79% — $ — $ — $ — $ — $ — 2028 35,622.0 21,818.8 13,803.2 61.25% 4,053.6 552.9 364.8 188.1 4.64% 2029 35,915.3 22,587.8 13,327.5 62.89% 4,142.7 560.1 372.8 187.3 4.52% — % — % — % —% — % Normal cost includes administrative expenses and health insurance subsidy.
The health insurance subsidy is assumed to be — $ — $ 1,074,523,844 $ 621,772,494 $ — $ 1,696,296,338 — % — % 5.2 % 2.8% — % $65 million each year.

fiscal year.

during the middle of the year.

Total expenses shown include benefit payments, refunds, administrative expenses and health insurance subsidy.

Actuarial accrued liability and assets are measured at the end of the fiscal year.
Normal cost is measured at the middle of the State contributions, benefit payments, refunds, administrative expenses, and employee contributions are assumed to occur $ 241,161,140 $ 260,150,252 $ 220,857,399 $ 233,351,269 $ 264,851,308 $ 1,220,371,368 55% of the Board of Education's dedicated property tax levy of 0.567% is assumed to be paid March 1, each fiscal year.

1.2 % 1.3 % 1.1 % 1.1% 1.2 % Total payroll is capped for members hired after December 31, 2010, as defined in Public Act 96-0889.
The remaining Board of Education contributions are assumed to occur at the end of the year.

$ 162,828,080 $ 29,962,052 $ 1,035,003,888 $ 1,064,928,423 $ 276,444,638 $ 2,569,167,081 2019 actuarial valuation, which can be found at www.ctpf.org.

* This table has been adjusted to display information for the next 10 fiscal years.
For the full table, please see the fiscal year 0.8 % 0.2 % 5.1 % 4.9% 1.2 % $ 19,503,893,632 $ 19,951,289,974 $ 20,484,951,277 $ 21,822,010,297 $ 22,922,992,558 a Includes other experience such as deviations between actual and expected benefit payments and unexpected changes in service.

Results prior to fiscal year 2017 were obtained from the prior Actuary’s actuarial valuation reports.
110 | Actuarial | SECTION D: ACTUARIAL PROJECTIONS ____________________________________________________________________________________________ Table 6: Baseline Projections - Employer Contributions Determined Under Public Act 90-0655, Public Act 91-0357, Public Act 96-0889, and Public Act 100-0465 Investment Return of 7.00% Each Year (Dollars in Millions)* Annual Normal Cost Fiscal Year Actuarial Accrued Liability Actuarial Value of Assets Unfunded Liability Funded Ratio Pensionable Payroll Total Employee Contribution Employer Normal Cost Percent of Pay 2020 $ 32,886.6 $ 17,301.9 $ 15,584.7 52.61% $ 3,441.4 $ 548.4 $ 309.7 $ Normal cost includes administrative expenses and health insurance subsidy.
The health insurance subsidy is assumed to be $65 million each year.

Total expenses shown include benefit payments, refunds, administrative expenses and health insurance subsidy.

Actuarial accrued liability and assets are measured at the end of the fiscal year.

Normal cost is measured at the middle of the fiscal year.

State contributions, benefit payments, refunds, administrative expenses, and employee contributions are assumed to occur during the middle of the year.
55% of the Board of Education's dedicated property tax levy of 0.567% is assumed to be paid March 1, each fiscal year.

The remaining Board of Education contributions are assumed to occur at the end of the year.

Total payroll is capped for members hired after December 31, 2010, as defined in Public Act 96-0889.

* This table has been adjusted to display information for the next 10 fiscal years.

For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.
| Actuarial | 111 Table 6: Baseline Projections - Employer Contributions Determined Under Public Act 90-0655, Public Act 91-0357, Public Act 96-0889, and Public Act 100-0465 (Continued) SECTION E: FUND ASSETS ____________________________________________________________________________________________ Investment Return of 7.00% Each Year (Dollars in Millions)* Table 8: Development of the Actuarial Value of Assets Year Ending June 30 2019 2019 2020 2021 Total Employer Contributions Fiscal Year Required Employer Contribution Additional State Contribution State Normal Cost Contribution Additional Board of Education Contribution Required Board of Education Contribution Percent of Pay Total Expenses 2020 $ 1,344.8 $ 18.7 $ 238.7 $ 20.0 $ 1,067.4 39.08% $ Normal cost includes administrative expenses and health insurance subsidy.
The health insurance subsidy is assumed to be $65 million each year.

Total expenses shown include benefit payments, refunds, administrative expenses and health insurance subsidy.

Actuarial accrued liability and assets are measured at the end of the fiscal year.

Normal cost is measured at the middle of the fiscal year.

State contributions, benefit payments, refunds, administrative expenses, and employee contributions are assumed to occur during the middle of the year.
55% of the Board of Education's dedicated property tax levy of 0.567% is assumed to be paid March 1, each fiscal year.

The remaining Board of Education contributions are assumed to occur at the end of the year.

Total payroll is capped for members hired after December 31, 2010, as defined in Public Act 96-0889.

* This table has been adjusted to display information for the next 10 fiscal years.

For the full table, please see the fiscal year 2018 actuarial valuation, which can be found at www.ctpf.org.
Table 7: Solvency Test The solvency test is hypothetical and measures the CTPF's ability to cover different types of obligations if the plan were terminated.

Columns are displayed in the order that assets would be allocated to cover certain types of obligations.

Employee contributions would be refunded first, amounts due for retirees, vested terminated members and beneficiaries would be covered next, and the Employers' obligations for active members would be covered last.
Columns (1) and (2) should be fully covered by assets while the portion of column (3) that is covered by assets should increase over time.
Valuation Date June 30, Total Actuarial Accrued Liability (1) Active Member Contributions (2) Retirees, Term Vested and Beneficiaries (3) Active Members (Employer Financed Portion) Actuarial Value of Assets Portion (%) of Present Value Covered by Assets (1) (2) (3) 2017 $ 21,822,010,297 $ 1,608,474,476 $ 16,244,526,663 $ 3,969,009,158 $ 10,933,031,685 100% 57% —% 2018 $ 22,922,992,558 $ 1,659,408,813 $ 17,510,678,092 $ 3,752,905,653 $ 10,969,085,523 100% 53% —% 2019 23,252,163,307 1,752,007,367 17,532,864,523 3,967,291,417 11,021,811,634 100% 53% —% Information for the next 10 fiscal years will be added as it becomes available.
112 | Actuarial | 3.

Market Value of Assets $ 11,038,837,459 Beginning of Year: 1.

Market Value of Assets 2.

Actuarial Value of Assets End of Year 4.

Contributions and Disbursements a.

Actual Employer & Misc.

Contributions b.

Employee Contributions c. Benefit Payouts & Refunds d. Administrative Expenses e. Net of Contributions and Disbursements 5.

Total Investment Income = (3)-(1)-(4e) 6.

Projected Rate of Return 7.

Projected Investment Incomea 8.


Investment Income in Excess of Projected Income 9.

Excess Investment Income Recognized This Year (4-year recognition) $ 11,104,765,514 $ 10,969,085,523 $ 810,257,970 190,565,220 (1,554,227,914) (26,099,731) (579,504,455) 513,576,400 7.00% 732,235,615 (218,659,215) $ $ $ $ $ $ 10.

Change in Actuarial Value of Assets = (4e)+(7)+(9e) End of Year: 3.

Market Value of Assets 11.

Actuarial Value of Assets 12.

Difference Between Market & Actuarial Values 13.


Estimated Actuarial Value Rate of Return Return 14.

Estimated Market Value Rate of 15.

Ratio of Actuarial Value to Market Value 52,726,111 $ 11,038,837,459 $ 11,021,811,634 $ 17,025,825 5.92% 4.75% 99.85% a.

Year Ended June 30, 2018 $ (54,664,804) b.
Year Ended June 30, 2017 35,555,686 $ (54,664,804) c. Year Ended June 30, 2016 114,636,306 35,555,686 $ (54,664,804) d. Year Ended June 30, 2015 (195,532,237) 114,636,305 35,555,685 $ (54,664,803) e. Total Recognized Investment Gain (100,005,049) 95,527,187 (19,109,119) (54,664,803) aProjected investment income is estimated based on the actuarial value of assets and weighted timing of middle of year, 8/12ths of a year, and end of year for non-investment cash flows.
SECTION E: FUND ASSETS ____________________________________________________________________________________________ Table 8: Development of the Actuarial Value of Assets Year Ending June 30 2019 2019 2020 2021 Beginning of Year: 1.

Market Value of Assets 2.

Actuarial Value of Assets End of Year $ 11,104,765,514 $ 10,969,085,523 3.

Market Value of Assets $ 11,038,837,459 4.

Contributions and Disbursements a.

Actual Employer & Misc.

Contributions b.


Employee Contributions c. Benefit Payouts & Refunds d. Administrative Expenses e. Net of Contributions and Disbursements 5.

Total Investment Income = (3)-(1)-(4e) 6.

Projected Rate of Return 7.

Projected Investment Incomea 8.

Investment Income in Excess of Projected Income 9.


Excess Investment Income Recognized This Year (4-year recognition) $ 810,257,970 190,565,220 (1,554,227,914) (26,099,731) (579,504,455) 513,576,400 7.00% 732,235,615 (218,659,215) $ $ $ $ a.

Year Ended June 30, 2018 $ (54,664,804) b.


Year Ended June 30, 2017 35,555,686 $ (54,664,804) c. Year Ended June 30, 2016 114,636,306 35,555,686 $ (54,664,804) d. Year Ended June 30, 2015 (195,532,237) 114,636,305 35,555,685 $ (54,664,803) e. Total Recognized Investment Gain 10.

Change in Actuarial Value of Assets = (4e)+(7)+(9e) $ $ (100,005,049) 95,527,187 (19,109,119) (54,664,803) 52,726,111 End of Year: 3.

Market Value of Assets 11.

Actuarial Value of Assets 12.


Difference Between Market & Actuarial Values 13.

Estimated Actuarial Value Rate of Return 14.

Estimated Market Value Rate of Return 15.

Ratio of Actuarial Value to Market Value $ 11,038,837,459 $ 11,021,811,634 $ 17,025,825 5.92% 4.75% 99.85% aProjected investment income is estimated based on the actuarial value of assets and weighted timing of middle of year, 8/12ths of a year, and end of year for non-investment cash flows.
| Actuarial | 113 Table 9: Historical Investment Returns* Year Ended June 30 Market Value Return Actuarial Value Return ____________________________________________________________________________________________ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Returns Last 10 Years: 13.6 % 24.8 % (0.4)% 13.1 % 17.9 % 3.6 % (0.3)% 12.5 % 8.5 % 4.7 % 9.5 % (0.4)% (0.5)% 1.0 % 11.2 % 12.8 % 8.2 % 8.6 % 8.3 % 5.8 % 5.9 % 6.0 % * This table has been adjusted to display information for the past 10 fiscal years using a simplified method to calculate historical investment returns.
For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.
SECTION F: PARTICIPANT DATA Table 10: Summary of Fund Membership Active Members Number Average Age Average Service Total Salary Supplied by Fund Average Annual Salary Total Active Vested Participants Male Members Female Members Tier 1 Members Tier 2 Members Inactive Vested Membersa Number Average Age Number Retirees Number Average Age Average Annual Benefit Total Annual Benefit Disabled Retirees Number Average Age Average Annual Benefit Total Annual Benefit Number Average Age Average Annual Benefit Total Annual Benefit Total Members b Includes reciprocal service Year Ended June 30, 2019 June 30, 2018 Change from Prior Year 2,179,054,844 2,094,830,446 29,295 42.3 10.8 74,383 16,655 6,903 22,392 18,632 10,663 9,926 47.2 7.7 20,621 24,631 74.6 55,761 469 67.8 38,717 3,217 77.0 24,067 88,159 $ $ $ $ $ $ $ $ 28,958 42.0 10.7 72,340 17,065 6,954 22,004 19,389 9,569 9,398 46.6 7.8 24,897 74.1 54,355 464 67.7 37,682 3,188 76.6 23,002 87,187 1.2 % 4.0 % 2.8 % (2.4)% (0.7)% 1.8 % (3.9)% 11.4 % 5.6 % (1.1)% 2.6 % 1.5 % 1.1 % 2.7 % 3.9 % 0.9 % 4.6 % 5.6 % 1.1 % 1,373,459,588 1,353,269,577 $ $ $ $ $ $ $ $ Beneficiaries (Including Children) 18,158,456 17,484,671 a Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
77,424,498 73,331,546 Average Service (Excluding Reciprocal Service) Inactive Non-Vested Members 20,282 1.7 % 114 | Actuarial | SECTION F: PARTICIPANT DATA ____________________________________________________________________________________________ Table 10: Summary of Fund Membership Year Ended June 30, 2019 June 30, 2018 Change from Prior Year Active Members Number Average Age Average Service Total Salary Supplied by Fund Average Annual Salary Total Active Vested Participants Male Members Female Members Tier 1 Members Tier 2 Members Inactive Vested Membersa Number Average Age Average Service (Excluding Reciprocal Service) Inactive Non-Vested Members Number Retirees Number Average Age Average Annual Benefit Total Annual Benefit Disabled Retirees Number Average Age Average Annual Benefit Total Annual Benefit Beneficiaries (Including Children) Number Average Age Average Annual Benefit Total Annual Benefit Total Members 29,295 42.3 10.8 2,179,054,844 74,383 16,655 6,903 22,392 18,632 10,663 9,926 47.2 7.7 20,621 24,631 74.6 55,761 1,373,459,588 469 67.8 38,717 18,158,456 3,217 77.0 24,067 77,424,498 88,159 $ $ $ $ $ $ $ $ 28,958 42.0 10.7 2,094,830,446 72,340 17,065 6,954 22,004 19,389 9,569 9,398 46.6 7.8 1.2 % 4.0 % 2.8 % (2.4)% (0.7)% 1.8 % (3.9)% 11.4 % 5.6 % 20,282 1.7 % 24,897 74.1 54,355 1,353,269,577 464 67.7 37,682 17,484,671 3,188 76.6 23,002 73,331,546 87,187 (1.1)% 2.6 % 1.5 % 1.1 % 2.7 % 3.9 % 0.9 % 4.6 % 5.6 % 1.1 % $ $ $ $ $ $ $ $ a Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
b Includes reciprocal service | Actuarial | 115 Table 11: Schedule of Active Member Data Table 13: Total Lives and Annual Salaries* of Active Members Classified by Age and Years of Service Year Ended June 30 Active Participants Covered Payroll Average Annual Payroll % Increase in Average Payroll Participating Employers* Completed Years of Service as of June 30, 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 31,012 30,133 30,366 30,969 30,654 29,706 29,543 28,855 28,958 29,295 $ 2,107,934,080 $ 67,972 2,090,131,858 2,224,903,121 2,239,347,051 2,233,280,995 2,273,551,432 2,281,268,890 2,030,175,116 2,094,830,446 2,179,054,844 69,364 73,270 72,309 72,854 76,535 77,219 70,358 72,340 74,383 * Participating employers are displayed at an aggregate level by charter holder.
2.05 % 5.63 % (1.31)% 0.75 % 5.05 % 0.89 % (8.88)% 2.82 % 2.82 % 38 42 43 45 49 48 47 45 45 42 Table 12: Member Population and Ratio of Non-Actives to Actives Year Ended June 30 Active Participants Vested Terminated Participantsa Retirees and Beneficiaries Ratio of Non-Actives to Actives a Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
b Excludes non-vested terminated participants due a refund of member contributions.
116 | Actuarial | Under 20 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70 & Over Total Age Under 1 1 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 & Over Total $ — $ — $ — $ — $ — $ — $ — $ — $ — $ $ 2,272,208 $ 33,287,968 $ — $ — $ — $ — $ — $ — $ — $ 35,560,176 — — 182 627 — — 388 2,625 717 — — — 235 1,690 2,204 389 — — — — 206 952 1,476 1,633 467 — — — — 1 $ 4,761,166 $ 145,504,054 $ 46,732,744 $ — $ — $ — $ — $ — $ — $ 196,997,964 $ 3,012,984 $ 96,455,717 $154,608,262 $ 33,659,422 $ — $ — $ — $ — $ — $ 287,736,385 $ 2,407,981 $ 53,437,005 $106,823,525 $147,890,284 $ 45,941,730 $ 99,102 $ — $ — $ — $ 356,599,627 160 544 702 1,096 1,338 252 $ 1,895,693 $ 29,134,798 $ 50,296,115 $100,197,447 $132,024,310 $ 26,678,337 $ — $ — $ — $ 340,226,700 $ 1,788,202 $ 22,426,253 $ 35,598,382 $ 52,965,272 $ 95,611,867 $107,254,686 $ 23,397,466 $ 101,907 $ — $ 339,144,035 115 286 293 364 539 654 690 99 $ 1,321,504 $ 13,764,842 $ 21,057,252 $ 31,147,021 $ 51,460,276 $ 65,857,402 $ 73,289,876 $ 10,488,226 $ 101,579 $ 268,487,978 102 251 190 254 377 435 429 246 $ 913,415 $ 11,021,930 $ 12,184,947 $ 21,570,273 $ 34,912,590 $ 42,587,832 $ 44,067,970 $ 26,608,058 $ 3,732,730 $ 197,599,745 87 159 131 159 258 233 212 107 $ 527,269 $ 5,943,308 $ 8,025,798 $ 11,641,840 $ 23,401,674 $ 22,967,785 $ 21,422,518 $ 11,161,600 $ 5,727,548 $ 110,819,339 $ 314,607 $ 1,846,272 $ 2,803,116 $ 4,398,636 $ 7,193,897 $ 6,005,580 $ 6,554,992 $ 3,315,175 $ 2,591,002 $ 35,023,277 48 37 75 54 67 34 68 29 82 28 63 19 $ 205,836 $ 844,554 $ 795,191 $ 1,254,802 $ 1,969,111 $ 1,546,443 $ 1,780,536 $ 479,719 $ 1,983,426 $ 10,859,618 1,725 7,684 6,305 4,578 4,066 2,691 1,630 491 125 29,295 $ 19,420,865 $ 413,666,701 $438,925,332 $404,724,997 $392,515,455 $272,997,167 $170,513,358 $ 52,154,685 $ 14,136,285 $ 2,179,054,844 Total lives and annual salaries exclude 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
— — — — — — 64 21 — — — — — — 1 33 5 — — — — — — — 1 32 51 25 16 — — 809 3,730 4,518 4,735 4,092 3,889 3,041 2,316 1,397 525 243 Table 13: Total Lives and Annual Salaries* of Active Members Classified by Age and Years of Service as of June 30, 2019 Age Under 1 1 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 & Over Total Completed Years of Service — — — — — — — — — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 182 627 — — — — — — — — — 809 $ 2,272,208 $ 33,287,968 $ — $ — $ — $ — $ — $ — $ — $ 35,560,176 388 2,625 717 — — — — — — 3,730 $ 4,761,166 $ 145,504,054 $ 46,732,744 $ — $ — $ — $ — $ — $ — $ 196,997,964 235 1,690 2,204 389 — — — — — 4,518 $ 3,012,984 $ 96,455,717 $154,608,262 $ 33,659,422 $ — $ — $ — $ — $ — $ 287,736,385 206 952 1,476 1,633 467 1 — — — 4,735 $ 2,407,981 $ 53,437,005 $106,823,525 $147,890,284 $ 45,941,730 $ 99,102 $ — $ — $ — $ 356,599,627 160 544 702 1,096 1,338 252 — — — 4,092 $ 1,895,693 $ 29,134,798 $ 50,296,115 $100,197,447 $132,024,310 $ 26,678,337 $ — $ — $ — $ 340,226,700 165 421 491 586 977 1,034 214 1 — 3,889 $ 1,788,202 $ 22,426,253 $ 35,598,382 $ 52,965,272 $ 95,611,867 $107,254,686 $ 23,397,466 $ 101,907 $ — $ 339,144,035 115 286 293 364 539 654 690 99 1 3,041 $ 1,321,504 $ 13,764,842 $ 21,057,252 $ 31,147,021 $ 51,460,276 $ 65,857,402 $ 73,289,876 $ 10,488,226 $ 101,579 $ 268,487,978 102 251 190 254 377 435 429 246 32 2,316 $ 913,415 $ 11,021,930 $ 12,184,947 $ 21,570,273 $ 34,912,590 $ 42,587,832 $ 44,067,970 $ 26,608,058 $ 3,732,730 $ 197,599,745 87 159 131 159 258 233 212 107 51 1,397 $ 527,269 $ 5,943,308 $ 8,025,798 $ 11,641,840 $ 23,401,674 $ 22,967,785 $ 21,422,518 $ 11,161,600 $ 5,727,548 $ 110,819,339 48 75 67 68 82 63 64 33 25 525 $ 314,607 $ 1,846,272 $ 2,803,116 $ 4,398,636 $ 7,193,897 $ 6,005,580 $ 6,554,992 $ 3,315,175 $ 2,591,002 $ 35,023,277 37 54 34 29 28 19 21 5 16 243 $ 205,836 $ 844,554 $ 795,191 $ 1,254,802 $ 1,969,111 $ 1,546,443 $ 1,780,536 $ 479,719 $ 1,983,426 $ 10,859,618 1,725 7,684 6,305 4,578 4,066 2,691 1,630 491 125 29,295 Under 20 20-24 25-29
 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70 & Over Total $ 19,420,865 $ 413,666,701 $438,925,332 $404,724,997 $392,515,455 $272,997,167 $170,513,358 $ 52,154,685 $ 14,136,285 $ 2,179,054,844 Total lives and annual salaries exclude 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.
| Actuarial | 117 Monthly Pension Amount $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3,001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 6,001 - 6,500 6,501 - 7,000 7,001 - 7,500 7,501 - 8,000 8,001 - 8,500 8,501 - 9,000 9,001 - 9,500 Over $9,500 Total — 1 — — 1 10 29 39 45 53 44 35 37 37 19 5 6 1 1 1 1 — — — 156 189 149 156 149 210 108 25 13 11 7 5 2 — — — — — — — 244 339 176 208 241 325 252 96 64 47 23 15 5 1 — — — — — Table 14: Reconciliation of Member Data as of June 30, 2019 Table 16: Annuitants Classified by Benefit Type and Amount as of June 30, 2019 Actives Deferred Vested Expected Refunds Retirees Disabilities Beneficiaries Total 28,958 9,398 20,282 24,897 464 3,188 87,187 Retirees Disabled Retirees Beneficiaries Total Male Female Male Female Male Female Male Female Totals as of the June 30, 2019, Actuarial Valuation New Entrants Rehires - Members with Service Non-Vested Terminations (1,671) Vested Terminations Service Retirements Disabilities Deaths New Beneficiaries Refunds and Benefit Terminations Data Adjustments Net Change 2,773 609 (767) (275) (12) (29) — — (220) (15) 1,105 (178) (9) (17) — — (389) 1,686 (338) (5) — (36) — (291) (149) (798) — 337 11 528 219 339 — — — — 458 — — — — — — 21 — — — — — — 2,773 — — — — — (731) (16) (193) (1,022) — — 7 (266) — — — 5 219 219 — 3 29 (1,238) 240 972 Totals as of the June 30, 2019, Actuarial Valuation 29,295 9,926 20,621 24,631 469 3,217 88,159 Active count excludes members expected to be hired to replace retirements and terminations that occurred in June.
Table 15: History of Retirees and Beneficiaries Added to Rolls during the Fiscal Year Ended June 30, 2019 Fiscal Year Added to Rolls Removed from Rolls Rolls - End of Year No.

Annual Allowance No.

Annual Allowance No.

Annual Allowance Average Annual Allowances Increase in Avg.
Annual Allowance 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 957 $ 57,109,256 659 $ 19,557,718 24,218 $ 942,388,371 $ | Actuarial | Table 16: Annuitants Classified by Benefit Type and Amount as of June 30, 2019 Monthly Pension Amount $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3,001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 6,001 - 6,500 6,501 - 7,000 7,001 - 7,500 7,501 - 8,000 8,001 - 8,500 8,501 - 9,000 9,001 - 9,500 Over $9,500 Total Retirees Disabled Retirees Beneficiaries Total Male 374 367 307 225 220 248 262 301 302 328 513 764 728 307 206 174 95 95 75 265 6,156 Female 985 851 679 588 639 802 946 1,171 1,280 1,232 1,609 2,481 2,269 1,123 487 257 209 207 149 511 Male 1 4 12 7 13 8 14 11 12 8 5 4 1 1 1 2 — 1 — — Female 1 10 29 39 45 53 44 35 37 37 19 5 6 1 1 1 1 — — — Male 156 189 149 156 149 210 108 25 13 11 7 5 2 — — — — — — — Female 244 339 176 208 241 325 252 96 64 47 23 15 5 1 — — — — — 1 18,475 105 364 1,180 2,037 Male 531 560 468 388 382 466 384 337 327 347 525 773 731 308 207 176 95 96 75 265 7,441 Female 1,230 1,200 884 835 925 1,180 1,242 1,302 1,381 1,316 1,651 2,501 2,280 1,125 488 258 210 207 149 512 20,876 | Actuarial | 119 Table 17: Initial Year Retirement Analysis 0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 Total Actuarial Cost Method as
 Mandated by 40 ILCS 5/17-129, Adopted August 31, 1991 Years of Credited Service Fiscal Year 2015 Average Monthly Pension $ 275 Average Monthly FAS $ 6,587 Number of Retired Members 47 Average Age Fiscal Year 2016 Average Monthly Pension $ 326 Average Monthly FAS $ 7,267 Number of Retired Members 61 Average Age Fiscal Year 2017 Average Monthly Pension $ 323 Average Monthly FAS $ 6,255 Number of Retired Members 38 Average Age Fiscal Year 2018 Average Monthly Benefit $ 336 Average Monthly FAS $ 6,507 Number of Retired Members 39 Average Age Fiscal Year 2019 Average Monthly Benefit $ 305 Average Monthly FAS $ 6,069 Number of Retired Persons 42 Average Age $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 877 5,377 104 840 5,266 92 734 4,332 80 823 5,349 92 699 4,827 64 $ $ $ $ $ $ $ $ $ $ 1,606 5,891 117 1,493 5,627 77 1,578 5,819 83 1,503 5,502 81 1,634 6,098 64 $ $ $ $ $ $ $ $ $ $ 2,621 6,851 107 2,432 6,515 113 2,516 6,705 99 2,578 6,738 88 2,547 6,673 62 $ $ $ $ $ $ $ $ $ $ 3,530 7,555 269 3,440 7,301 184 3,438 7,268 167 3,471 7,407 175 3,672 7,644 77 $ $ $ $ $ $ $ $ $ $ 4,254 7,483 172 4,294 7,711 123 4,301 7,612 129 4,505 7,927 122 4,789 8,482 62 $ $ $ $ $ $ $ $ $ $ | Actuarial | SECTION G: ACTUARIAL METHODS AND ASSUMPTION (Most Adopted Effective with the June 30, 2018, Actuarial Valuation) ____________________________________________________________________________________________ The Projected Unit Credit normal cost method is used.
Under this method, the projected pension at retirement age is first calculated and the present value at the individual member's current or attained age is determined.

The normal cost for the member for the current year is equal to the actuarial present value divided by the member's projected service at retirement.

The normal cost for the plan for the year is the sum of the individual normal costs.
The actuarial liability at any point in time is the present value of the projected pensions at that time less the present value of future normal costs.

For ancillary benefits for active members, in particular death and survivor benefits, termination benefits and the postretirement increases, the same procedure as outlined above is followed.

Estimated annual administrative expenses are added to the normal cost.
For actuarial valuation purposes, as well as projection purposes, an actuarial value of assets is used.

Actuarial Assumptions Actuarial assumptions are set by the Board of Trustees.

All actuarial assumptions are expectations of future experience and are not market measures.
The rationale for the actuarial assumptions may be found in the 2018 Actuarial Experience Study issued on May 25, 2018, the 2018 Investment Return Assumption Review issued on July 25, 2018 and the 2019 Actuarial Assumption Study issued on September 10, 2019.

Rate of Investment Return 7.00% per year, compounded annually, net of investment expenses.

Price Inflation (Increase in Consumer Price Index “CPI”) 2.50% per annum, compounded annually.
This assumption serves as the basis for the determination of annual increases in pension and the pensionable The assumed rate is 3.00% per year for members hired before January 1, 2011, based on the benefit provision of 3.00% annual compound increases.

The assumed rate is 1.25% for members hired on and after January 1, 2011, based on the benefit provision of increases equal to ½ of the increase in CPI-U with a maximum increase of 3.00 salary cap for Tier 2 members.
Cost of Living Adjustment “COLA” percent.

Wage Inflation 3.00% per annum, compounded annually.

Calculation of the Actuarially Determined Contribution The amortization factor used to calculate the ADC is based on the Fund’s assumed interest rate of 7.00% and an annualized assumed rate of increase in total capped payroll of 2.20% (which is consistent with the projected increase in total payroll from the projections used to calculate the statutory contribution requirements).
The Employer Normal Cost and Amortization Payment are adjusted for expected contribution timing.

Total Payroll Unless stated otherwise, total payroll includes employee contributions of 7.00% of salary picked up by the Board of Education for employees hired prior to January 1, 2017.

All contributions are calculated based on total payroll.
SECTION G: ACTUARIAL METHODS AND ASSUMPTION (Most Adopted Effective with the June 30, 2018, Actuarial Valuation) ____________________________________________________________________________________________ Actuarial Cost Method as Mandated by 40 ILCS 5/17-129, Adopted August 31, 1991 The Projected Unit Credit normal cost method is used.

Under this method, the projected pension at retirement age is first calculated and the present value at the individual member's current or attained age is determined.
The normal cost for the member for the current year is equal to the actuarial present value divided by the member's projected service at retirement.

The normal cost for the plan for the year is the sum of the individual normal costs.

The actuarial liability at any point in time is the present value of the projected pensions at that time less the present value of future normal costs.
For ancillary benefits for active members, in particular death and survivor benefits, termination benefits and the postretirement increases, the same procedure as outlined above is followed.

Estimated annual administrative expenses are added to the normal cost.

For actuarial valuation purposes, as well as projection purposes, an actuarial value of assets is used.

Actuarial Assumptions Actuarial assumptions are set by the Board of Trustees.
All actuarial assumptions are expectations of future experience and are not market measures.

The rationale for the actuarial assumptions may be found in the 2018 Actuarial Experience Study issued on May 25, 2018, the 2018 Investment Return Assumption Review issued on July 25, 2018 and the 2019 Actuarial Assumption Study issued on September 10, 2019.

Rate of Investment Return 7.00% per year, compounded annually, net of investment expenses.
Price Inflation (Increase in Consumer Price Index “CPI”) 2.50% per annum, compounded annually.

This assumption serves as the basis for the determination of annual increases in pension and the pensionable salary cap for Tier 2 members.

Cost of Living Adjustment “COLA” The assumed rate is 3.00% per year for members hired before January 1, 2011, based on the benefit provision of 3.00% annual compound increases.
The assumed rate is 1.25% for members hired on and after January 1, 2011, based on the benefit provision of increases equal to ½ of the increase in CPI-U with a maximum increase of 3.00 percent.

Wage Inflation 3.00% per annum, compounded annually.
Calculation of the Actuarially Determined Contribution The amortization factor used to calculate the ADC is based on the Fund’s assumed interest rate of 7.00% and an annualized assumed rate of increase in total capped payroll of 2.20% (which is consistent with the projected increase in total payroll from the projections used to calculate the statutory contribution requirements).

The Employer Normal Cost and Amortization Payment are adjusted for expected contribution timing.
Total Payroll Unless stated otherwise, total payroll includes employee contributions of 7.00% of salary picked up by the Board of Education for employees hired prior to January 1, 2017.

All contributions are calculated based on total payroll.
| Actuarial | 121 Mortality Applicable Group Base Mortality Table Pre-retirement Mortality RP-2014 White Collar Employee, sex distinct Post-retirement Disabled Mortality RP-2014 Disabled Annuitant, sex distinct Post-retirement Healthy Mortality RP-2014 White Collar Healthy Annuitant, sex distinct Male Scaling Factor Female Scaling Factor 98% 103% 108% 113% 106% 94% Future mortality improvements are reflected by projecting the base mortality tables back from the year 2014 to the year 2006 using the Society of Actuaries (SOA) MP-2014 (referred to as the RP-2006 base mortality tables) and projecting from 2006 using the MP-2017 projection scale.
The assumptions are generational mortality tables and include a margin for improvement.
Future Life Expectancy (years) in 2019 Future Life Expectancy (years) in 2030 Age Post-retirement Healthy Post-retirement Disabled Post-retirement Healthy Post-retirement Disabled Male 51.05 45.88 40.79 35.79 30.91 26.17 21.62 17.31 13.32 Female 54.32 49.13 44.00 38.91 33.87 28.96 24.25 19.75 15.50 Male 34.14 30.45 27.16 23.98 20.89 17.90 15.09 12.39 9.80 Female 40.53 36.10 32.01 28.05 24.30 20.84 17.50 14.19 11.09 Male 52.13 46.93 41.81 36.79 31.88 27.09 22.46 18.06 13.99 Female 55.34 50.13 44.98 39.87 34.81 29.86 25.09 20.53 16.22 Male 35.90 32.03 28.60 25.34 22.16 19.03 16.03 13.18 10.48 Female 42.14 37.60 33.41 29.37 25.53 21.93 18.44 15.02 11.84 35 40 45 50 55 60 65 70 75 Termination Service-based termination rates were used.
Sample rates are as follows: Service (Beginning of Year) Service (Beginning of Year) Rate (%) Termination Rate (%) 31+ 12.85% 7.75% 6.25% 5.50% 4.50% 3.75% 3.25% 3.00% 3.00% 3.00% 3.00% It is assumed that terminated employees will not be rehired.
The rates apply only to employees who have not fulfilled the service requirement necessary for retirement at any given age.

Salary Increases Illustrative rates of increase per individual employee per year, compounded annually: Age Annual Increase The underlying salary increase assumption is based on a wage inflation assumption of 3.00% per year.

122 | Actuarial | Termination Service-based termination rates were used.
Sample rates are as follows: Service (Beginning of Year) 0 Rate (%) 30.00% 16.00% 13.00% 12.00% 9.00% 9.00% 8.00% 6.00% 5.00% 5.00% 4.00% 3.00% 3.00% 3.00% 3.00% 3.00% Termination Service (Beginning of Year) Rate (%) 26 27 28 29 30 31+ 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 1.75% 1.75% It is assumed that terminated employees will not be rehired.
The rates apply only to employees who have not fulfilled the service requirement necessary for retirement at any given age.

Salary Increases Illustrative rates of increase per individual employee per year, compounded annually: Age Annual Increase 20 25 30 35 40 45 50 55 60 65 70 12.85% 7.75% 6.25% 5.50% 4.50% 3.75% 3.25% 3.00% 3.00% 3.00% 3.00% The underlying salary increase assumption is based on a wage inflation assumption of 3.00% per year.
| Actuarial | 123 Disability Disability rates, based on recent experience of the Fund, were applied to members with at least 10 years of service.

All disabilities are assumed to be non-duty disabilities.
Sample rates are as follows: Age Rate (%) 20 25 30 35 40 45 50 55 60 0.04% 0.04% 0.04% 0.05% 0.06% 0.08% 0.19% 0.24% 0.29% Active Member Population as of the Actuarial Valuation Date The Tier 2 active population as of the actuarial valuation date of June 30, 2019, was increased by 142 members in order to estimate the total expected number of active members that will be working and making contributions in the upcoming fiscal year.
Members who retire at the end of the school year have June retirement dates and are already reflected as retirees in the data received as of June 30, but new active members to replace these members are not hired until August or September and are not included in the census data until the following fiscal year.

These members are assumed to have a similar demographic profile as new entrants who have been hired in the last three years.
Population Projection For purposes of determining annual appropriation as a percent of total covered payroll, the size of the active group is assumed to remain level at the number of actives as of the actuarial valuation date including expected new hires, or 29,437.

New entrants are assumed to enter with an average age and an average pay as disclosed below.

New entrants are assumed to have a similar demographic profile of recent new entrants to the Fund.
The average increase in uncapped payroll for the projection period is 3.00% per year.

Retirement Employees are assumed to retire in accordance with the rates shown below.

The rates apply only to employees who have fulfilled the service requirement necessary for retirement at any given age.

New Entrant Profile Age Group Number Salary Under 20 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 & Over Total Avg.

Salary Avg.
Age Percent Female — 1,063 1,500 785 457 294 250 169 149 82 11 — $ $ $ — 51,493,871 75,145,249 40,666,028 23,069,777 14,606,436 12,373,168 7,184,922 6,104,574 2,358,889 158,700 — 48,984 32.22 76% 4,760 233,161,614 Retirement Rates for Tier 1 Employees Retirement Rates for Tier 2 Employees Age <34 Years of Service Rate (%) 34+ Years of Service Rate (%) Age Rate (%) | Actuarial | Active Member Population as of the Actuarial Valuation Date The Tier 2 active population as of the actuarial valuation date of June 30, 2019, was increased by 142 members in order to estimate the total expected number of active members that will be working and making contributions in the upcoming fiscal year.
Members who retire at the end of the school year have June retirement dates and are already reflected as retirees in the data received as of June 30, but new active members to replace these members are not hired until August or September and are not included in the census data until the following fiscal year.

These members are assumed to have a similar demographic profile as new entrants who have been hired in the last three years.
Population Projection For purposes of determining annual appropriation as a percent of total covered payroll, the size of the active group is assumed to remain level at the number of actives as of the actuarial valuation date including expected new hires, or 29,437.

New entrants are assumed to enter with an average age and an average pay as disclosed below.

New entrants are assumed to have a similar demographic profile of recent new entrants to the Fund.
The average increase in uncapped payroll for the projection period is 3.00% per year.

New Entrant Profile Age Group Number Salary Under 20 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 & Over Total Avg.

Salary Avg.
Age Percent Female — 1,063 1,500 785 457 294 250 169 149 82 11 — 4,760 $ $ $ — 51,493,871 75,145,249 40,666,028 23,069,777 14,606,436 12,373,168 7,184,922 6,104,574 2,358,889 158,700 — 233,161,614 48,984 32.22 76% | Actuarial | 125 Actuarial Methods and Assumptions (Most Adopted Effective with the June 30, 2018 Actuarial Valuation) ____________________________________________________________________________________________ Assets The asset values used for the actuarial valuation were based on asset information contained in the financial statements for the year ended June 30, 2019, prepared by the Fund.
The actuarial value of assets was determined by smoothing unexpected gains or losses over a period of four years.

The investment gain or loss for a year is calculated as the total investment income on the market value of assets, minus expected investment return on the prior actuarial value of assets.

The final actuarial value is equal to the expected actuarial value plus (or minus) 25% of the calculated gain (or loss) in the prior four years.
Expenses Administrative expenses included in the normal cost are based on the previous year’s administrative expenses increased by 5.75%.

Future administrative expenses are assumed to increase by 5.75% per year for 15 years and then increase at a rate consistent with the increase in projected capped payroll thereafter.

Marriage Assumption 75.0% of active male participants and 65.0% of active female participants are assumed to be married.

Actual marital status at benefit commencement is used for retirees.
Spouse's Age The female spouse is assumed to be two years younger than the male spouse.

Turnover decrements do not operate after a member reaches retirement eligibility.

Disability decrements do not operate after a member reaches normal retirement eligibility.

Total Service at Retirement A teacher’s total service credit at retirement is assumed to be 103.3% of the teacher’s regular period of service at retirement.
Eligibility for benefits is determined based upon the age nearest birthday and service on the date the decrement is Valuation of Inactive Members Eligible for Deferred Vested Pension Benefits Assumptions as a Result of Public Act 96-0889 Benefits for inactive deferred vested members were determined by projecting the accumulated contribution balance to retirement (age 62) with interest at the assumed investment rate of return, converted to an annuity, and then loaded by 35 percent.
Assumption for Missing Data Members whose gender was not provided are assumed to be female.

Members hired on or after January 1, 2011, are assumed to make contributions on salary up to the final average compensation cap in a given year.

State contributions, expressed as a percentage of pay, are calculated based upon capped pay.

Capped (pensionable) pay was $114,952 for fiscal year 2019 and increases at ½ the annual increase in the Consumer Price Index-U thereafter.
The annual increase in the Consumer Price Index-U is assumed to be 2.50% for all years.

Contribution Timing Projected employer contributions are assumed to occur based on the following timing: 1.

Additional Board of Education Contribution (0.58% of pay) - June 30th (End of Year) 2.

Additional State Contribution (0.544% of pay) - Monthly (Middle of Year) 3.

State Normal Cost Contribution - Monthly (Middle of Year) 4.

Board of Education Early Payment of Special Tax Levy - March 1st, annually a.
55% of prior year’s tax levy is assumed to occur each March 1st i.

This amount is assumed to be $180,612,283 for fiscal year 2020 and increased each year by three percent.

5.

Remaining Board of Education Contribution - June 30th (End of Year) All decrements are assumed to occur during the middle of the year.

Decrement rates are used directly from the experience study, without adjustment for multiple decrement table Decrement Timing Decrement Relativity effects.
Decrement Operation Eligibility Testing assumed to occur.

126 | Actuarial | Contribution Timing Projected employer contributions are assumed to occur based on the following timing: 1.

Additional Board of Education Contribution (0.58% of pay) - June 30th (End of Year) 2.

Additional State Contribution (0.544% of pay) - Monthly (Middle of Year) 3.

State Normal Cost Contribution - Monthly (Middle of Year) 4.

Board of Education Early Payment of Special Tax Levy - March 1st, annually a.
55% of prior year’s tax levy is assumed to occur each March 1st i.

This amount is assumed to be $180,612,283 for fiscal year 2020 and increased each year by three percent.

5.

Remaining Board of Education Contribution - June 30th (End of Year) Decrement Timing All decrements are assumed to occur during the middle of the year.

Decrement Relativity Decrement rates are used directly from the experience study, without adjustment for multiple decrement table effects.
Decrement Operation Turnover decrements do not operate after a member reaches retirement eligibility.

Disability decrements do not operate after a member reaches normal retirement eligibility.

Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and service on the date the decrement is assumed to occur.
Assumptions as a Result of Public Act 96-0889 Members hired on or after January 1, 2011, are assumed to make contributions on salary up to the final average compensation cap in a given year.

State contributions, expressed as a percentage of pay, are calculated based upon capped pay.

Capped (pensionable) pay was $114,952 for fiscal year 2019 and increases at ½ the annual increase in the Consumer Price Index-U thereafter.
The annual increase in the Consumer Price Index-U is assumed to be 2.50% for all years.

| Actuarial | 127 Projection Methodology and Appropriation Requirements under P.A.

90-0655, P.A.

91-0357, P.A.

96-0889, P.A.

99-0521, and P.A.

100-0465 additional tax shall be paid, as soon as possible after collection, directly to the Public School Teachers’ Pension and Retirement Fund of Chicago and not to the Board of Education.

State Contributions under P.A.
100-0465 The following is an excerpt from the Illinois Compiled statutes 40 ILCS 5/17-127 (d)(1)-(d)(2): (d) In addition to any other contribution required under this Article, including the contribution required under subsection (c), the State shall contribute to the Fund the following amounts: (1) For State fiscal year 2018, the State shall contribute $221,300,000 for the employer normal cost for fiscal year 2018 and the amount allowed under paragraph (3) of Section 17-142.1 of this Code to defray health insurance costs.
Funds to this paragraph (1) shall come from funds appropriated for Evidence- Based Funding pursuant to Section 18-8.15 of the School Code.

(2) Beginning in State fiscal year 2019, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the amount allowed pursuant to paragraph (3) of Section 17-142.1 to defray health insurance costs.
We calculated the required contribution based on the above legislation; the results are shown in the summary section of this report.

Employer Contributions under P.A.


96-0889 The following is an excerpt from the Illinois Compiled statutes 40 ILCS 5/17-129 (b)(iv)-(b)(vii): (iv) For fiscal years 2014 through 2059, the minimum contribution to the Fund to be made by the Board of Education in each fiscal year shall be an amount determined by the Fund to be sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2059.
In making these determinations, the required Board of Education contribution shall be calculated each year as a level percentage of the applicable employee payrolls over the years remaining to and including fiscal year 2059 and shall be determined under the Projected Unit Credit actuarial cost method.
(v) Beginning in fiscal year 2060, the minimum Board of Education contribution for each fiscal year shall be the amount needed to maintain the total assets of the Fund at 90% of the total actuarial liabilities of the Fund.
(vi) Notwithstanding any other provision of this subsection (b), for any fiscal year, the contribution to the Fund from the Board of Education shall not be required to be in excess of the amount calculated as needed to maintain the assets (or cause the assets to be) at the 90% level by the end of the fiscal year.
(vii) Any contribution by the State to or for the benefit of the Fund, including, without limitation, as referred to under Section 17-127, shall be a credit against any contribution required to be made by the Board of Education under this subsection (b).

Additional State and Employer Contributions under P.A.

90-0655 and P.A.
90-0655 and P.A.

91-0357 The following is an excerpt from the Illinois Compiled statutes 40 ILCS 5/17-127 (b): (b) The General Assembly finds that for many years the State has contributed to the Fund an annual amount that is between 20% and 30% of the amount of the annual State contribution to the Article 16 retirement system, and the General Assembly declares that it is its goal and intention to continue this level of contribution to the Fund in the future.
Beginning in State fiscal year 1999, the State shall include in its annual contribution to the Fund an additional amount equal to 0.544% of the Fund's total teacher payroll; except that this additional contribution need not be made in a fiscal year if the Board has certified in the previous fiscal year that the Fund is at least 90% funded, based on actuarial determinations.
These additional State contributions are intended to offset a portion of the cost to the Fund of the increases in retirement benefits resulting from this amendatory Act of 1998.

The following is an excerpt from the Illinois Compiled statutes 40 ILCS 5/17-127.2 (1)-(2): Sec.

17-127.2.

Additional contributions by employer of teachers.


Beginning July 1, 1998, the employer of a teacher shall pay to the Fund an employer contribution computed as follows: (1) Beginning July 1, 1998, through June 30, 1999, the employer contribution shall be equal to 0.3% of each teacher's salary.

(2) Beginning July 1, 1999, and thereafter, the employer contribution shall be equal to 0.58% of each teacher's salary.
The employer may pay these employer contributions out of any source of funding available for that purpose and shall forward the contributions to the Fund on the schedule established for the payment of member contributions.

These employer contributions need not be made in a fiscal year if the Board has certified in the previous fiscal year that the Fund is at least 90% funded, based on actuarial determinations.
These employer contributions are intended to offset a portion of the cost to the Fund of the increases in retirement benefits resulting from Public Act 90-582.

Board of Education Dedicated Property Tax Levy under P.A.

99-0521 as Amended by P.A.


100-0465 The following is an excerpt from the Illinois Compiled statutes 105 ILCS 5/34-53: Beginning on the effective date of this amendatory Act of the 99th General Assembly, for the purpose of making an employer contribution to the Public School Teachers’ Pension and Retirement Fund of Chicago, the board may levy annually for taxable years prior to 2017, upon all taxable property located within the district, a tax at a rate not to exceed 0.383%.
Beginning with the 2017 taxable year, for the purpose of making an employer contribution to the Public School Teachers’ Pension and Retirement Fund of Chicago, the board may levy annually, upon all taxable property within the district, a tax at a rate of 0.567%.

The proceeds from this 128 | Actuarial | additional tax shall be paid, as soon as possible after collection, directly to the Public School Teachers’ Pension and Retirement Fund of Chicago and not to the Board of Education.
State Contributions under P.A.
100-0465 The following is an excerpt from the Illinois Compiled statutes 40 ILCS 5/17-127 (d)(1)-(d)(2): (d) In addition to any other contribution required under this Article, including the contribution required under subsection (c), the State shall contribute to the Fund the following amounts: (1) For State fiscal year 2018, the State shall contribute $221,300,000 for the employer normal cost for fiscal year 2018 and the amount allowed under paragraph (3) of Section 17-142.1 of this Code to defray health insurance costs.
Funds to this paragraph (1) shall come from funds appropriated for Evidence- Based Funding pursuant to Section 18-8.15 of the School Code.

(2) Beginning in State fiscal year 2019, the State shall contribute for each fiscal year an amount to be determined by the Fund, equal to the employer normal cost for that fiscal year, plus the amount allowed pursuant to paragraph (3) of Section 17-142.1 to defray health insurance costs.
We calculated the required contribution based on the above legislation; the results are shown in the summary section of this report.

| Actuarial | 129 SECTION H: SUMMARY OF PLAN PROVISIONS (as of June 30, 2019) ____________________________________________________________________________________________ It should be noted that the purpose of this section is to describe the benefit structures of CTPF for which actuarial values have been generated.
Many portions of the defined plans are described in a manner which may not be legally complete or precise.

It is not our intent to provide an exhaustive description of all benefits provided under CTPF or the policies and procedures utilized by CTPF staff.

A more precise description of the provisions of CTPF can be found in Illinois Compiled Statutes (ILCS) Chapter 40, Articles 1, 17 and 20.

In all situations, the plan provisions described in the Statutes govern.
Purpose The Public School Teachers' Pension and Retirement Fund of Chicago, established in 1895 by the Illinois state legislature, is a defined benefit public employee retirement fund that provides retirement, survivor and disability benefits to certain teachers and employees of the Chicago Public Schools.

Administration Responsibility for the operation of the Fund and the direction of its policies is vested in a Board of Trustees of 12 members.
The 12-member Board of Trustees is comprised of six members elected by the teacher contributors, three members elected by the annuitants, one member elected by the principal contributors and two members are appointed by the Board of Education.

The administration of the detailed affairs of the Fund is the responsibility of the Executive Director who is appointed by the Board of Trustees.
Administrative policies and procedures are designed to ensure an accurate accounting of funds of CTPF and prompt payment of claims for benefits within the applicable statute.

Membership Any teacher and certain other employees of the Chicago Public Schools, approved charter schools and the Chicago Teachers’ Pension Fund are participants of CTPF.

Members hired prior to January 1, 2011, participate under the Tier 1 benefit structure.
Members hired on and after January 1, 2011, participate under the Tier 2 benefit structure.

Membership Service Membership service includes all service rendered while a member of the Fund for which credit is allowable.

Contributors to the Fund cannot earn more than one year of service credit per fiscal year.

Validated service within a fiscal year is determined on a schedule of 170 days.
Member Contributions Members are required to contribute a percentage of salary as their share of meeting the cost of the various benefits.

The total contribution rate of 9.0% of salary consists of 7.5% towards the retirement pension, 1.0% towards the survivor pension and 0.5% towards the post-retirement increase.

As of September 1981, the Board of Education has been paying 7.0% of the required teacher contributions for Chicago public school teachers.
Charter school contributions may be contributed at various rates by the employers and teachers.

As a result of the collective bargaining agreement between the Board of Education of the City of Chicago and the Chicago Teachers Union, Local No.

1, American Federation of Teachers, AFL-CIO, which became effective December 7, 2016, teachers hired on and after January 1, 2017, will no longer receive the pension pick-up of 7.0% from the Board of Education.
Retirement Pension Qualification of Member A member is eligible for a retirement pension after (1) completing 20 years of validated service, with the pension payable at age 55 or older, or (2) after completing five years of service with the pension payable at age 62 or older.

130 | Actuarial | Amount of Pension established.

within the last 10 years.
The pension is based on the member's final average salary and the number of years of service credit that has been Final Average Salary is the average of the highest rates of salary for any four consecutive years of validated service For service earned before July 1, 1998, the amount of the service retirement pension is 1.67% of final average salary for the first 10 years, 1.90% for each of the next 10 years, 2.10% for each of the following 10 years and 2.30% for each year above 30.
For service earned after June 30, 1998, the amount of the service retirement pension is 2.2% of final average salary for each year of service.

Service earned before July 1, 1998, can be upgraded to the 2.2% formula through the payment of additional employee contributions of 1% of the teacher’s highest salary within the last four years for each year of prior service, up to a maximum of 20 percent, which upgrades all service years.
The number of years for which contributions are required is reduced by one for each three full years of service after June 30, 1998.

No contribution is required if the member has at least 30 years of service.

The maximum pension payable is 75% of final average salary or $1,500 per month, whichever is greater.
Postretirement increases of 3.0% of the current pension (i.e., increases are compounded) are granted to members effective each January 1, occurring on or after the first anniversary of the pension or the 61st birthday, whichever is Except for retirement after 34 years of service, the retirement pension is reduced by ½ of 1.0% for each month the Annual Increases in Pension later.

Reductions member is under age 60.

Survivors Annuity Qualification of Survivor death.


Amount of Pension Annual Increases in Pension Death Benefits Amount and Duration of Payment A surviving spouse or unmarried minor children is entitled to a pension upon the death of a member while in service or in retirement.

Survivor’s pensions are conditioned upon marriage having been in effect at least one year prior to The minimum survivor’s pension upon death of an active or retired member is 50% of the deceased member’s pension at the date of death.
If the surviving spouse is under age 50, and no unmarried minor children under age 18 survive, payment of the survivor’s pension is deferred until age 50.

Survivor’s pensions are subject to annual increases of 3.0% per year based on the current amount of pension starting the later of when the member would have attained age 61 and receipt of one year’s pension payments.
Upon the death of a member in service, a refund equal to the total contributions less contributions for survivor’s pensions is payable without interest to a designated beneficiary or the estate of the member.

The death benefit payable is the lesser of $10,000 and salary earned for the most recent six months.

Upon death of a member after retirement, the death benefit consists of the excess, if any, of the total contributions over the total pension payments paid to the member or his/her beneficiary.
Furthermore, the death benefit is the lesser of $10,000 and the most recent salary earned for a six-month period less 20% of the death benefit for each year that the member has been on pension, to a minimum of $5,000.

Amount of Pension The pension is based on the member's final average salary and the number of years of service credit that has been established.

Final Average Salary is the average of the highest rates of salary for any four consecutive years of validated service within the last 10 years.
For service earned before July 1, 1998, the amount of the service retirement pension is 1.67% of final average salary for the first 10 years, 1.90% for each of the next 10 years, 2.10% for each of the following 10 years and 2.30% for each year above 30.

For service earned after June 30, 1998, the amount of the service retirement pension is 2.2% of final average salary for each year of service.
Service earned before July 1, 1998, can be upgraded to the 2.2% formula through the payment of additional employee contributions of 1% of the teacher’s highest salary within the last four years for each year of prior service, up to a maximum of 20 percent, which upgrades all service years.

The number of years for which contributions are required is reduced by one for each three full years of service after June 30, 1998.

No contribution is required if the member has at least 30 years of service.
The maximum pension payable is 75% of final average salary or $1,500 per month, whichever is greater.

Annual Increases in Pension Postretirement increases of 3.0% of the current pension (i.e., increases are compounded) are granted to members effective each January 1, occurring on or after the first anniversary of the pension or the 61st birthday, whichever is later.
Reductions Except for retirement after 34 years of service, the retirement pension is reduced by ½ of 1.0% for each month the member is under age 60.

Survivors Annuity Qualification of Survivor A surviving spouse or unmarried minor children is entitled to a pension upon the death of a member while in service or in retirement.

Survivor’s pensions are conditioned upon marriage having been in effect at least one year prior to death.
Amount of Pension The minimum survivor’s pension upon death of an active or retired member is 50% of the deceased member’s pension at the date of death.

If the surviving spouse is under age 50, and no unmarried minor children under age 18 survive, payment of the survivor’s pension is deferred until age 50.
Annual Increases in Pension Survivor’s pensions are subject to annual increases of 3.0% per year based on the current amount of pension starting the later of when the member would have attained age 61 and receipt of one year’s pension payments.

Death Benefits Amount and Duration of Payment Upon the death of a member in service, a refund equal to the total contributions less contributions for survivor’s pensions is payable without interest to a designated beneficiary or the estate of the member.
The death benefit payable is the lesser of $10,000 and salary earned for the most recent six months.

Upon death of a member after retirement, the death benefit consists of the excess, if any, of the total contributions over the total pension payments paid to the member or his/her beneficiary.
Furthermore, the death benefit is the lesser of $10,000 and the most recent salary earned for a six-month period less 20% of the death benefit for each year that the member has been on pension, to a minimum of $5,000.

| Actuarial | 131 Non-Duty Disability Benefits Qualification and Amount of Payment A disability retirement pension is payable in the event of total or permanent disability with 10 or more years of service, irrespective of age.

The benefit is the unreduced service retirement pension.
However, if the participant has 20 or more and less than 25 years of service and is under age 55, the benefit is reduced by ½ of 1.0% for each month that the age of the member is below age 55 down to a minimum age of 50.

If total service is 20 years or more and the member has attained age 55, or after 25 years of service, regardless of age, the retirement pension is payable without reduction.
Annual Increases in Annuity Provisions Applicable to Members Hired on or after January 1, 2011, as a result of Public Act 96-0889 Final Average Compensation Based on last eight years of service and may not exceed $106,800, as automatically increased by the lesser of 3% or one-half of the annual increase in the consumer price index-u during the preceding 12-month calendar year.

Retirement Eligibility Normal retirement - 67 years old with 10 years of service.
Early Retirement - 62 years old with 10 years of service with a 6.0% per year reduction in benefit for each year age Postretirement increases of 3.0% of the current pension (i.e., increases are compounded) are granted to members effective each January 1, occurring on or after the first anniversary of the pension or the 61st birthday, whichever is later.

is under 67.

Annual Increases in Annuity Annual increases begin at the later of the first anniversary of retirement or age 67.
The annual increases are equal to the lesser of 3.0% or one-half of the annual increase in the consumer price index-u during the preceding 12- month calendar year and are not compounded.

Survivor Benefits Benefit equal to 66.67% of the earned retirement benefit at death.

Survivor benefits are increased by the lesser of 3.0% or one-half of the annual increase in the consumer price index-u during the preceding 12-month calendar year and are not compounded.
Salary and COLA Development for Members Hired on or After January 1, 2011 Year Ending CPI-U 1/2 CPI-U 2012 2013 2014 2015 2016 2017 2018 2019 2.00% 1.20% 1.70% —% 1.50% 2.20% 2.30% 1.00% 0.60% 0.85% —% 0.75% 1.10% 1.15% COLA 1.95% 1.00% 0.60% 0.85% —% 0.75% 1.10% 1.15% Maximum Annual Pensionable Earnings $ 108,882.60 109,971.43 110,631.26 111,571.63 111,571.63 112,408.42 113,644.91 114,951.83 Duty Disability Benefits Qualification and Amount of Payment A disability retirement pension is payable in the event of total or permanent disability from an injury that occurred while working.
The disability benefit provided is 75% of final average salary until attainment of age 65.

At age 65, the disabled retiree shall receive a service retirement pension, which includes service earned while disabled.

Annual Increases in Annuity Postretirement increases of 3.0% of the current pension (i.e., increases are compounded) are granted to members effective each January 1, occurring on or after the first anniversary of the pension or the 61st birthday, whichever is later.
Refunds Upon termination of employment, a member may obtain a refund of his/her total contributions and those contributions made on his/her behalf, without interest.

A member who is unmarried at the date of retirement is entitled to a refund of the full amount contributed for the survivor’s pension, without interest.

Reversionary Pension A member can provide a reversionary pension for a surviving beneficiary by having his/her current pension reduced.
If the beneficiary survives the date of the member's retirement, but does not survive the retired member, the member's pension shall be restored to the full amount of pension in place prior to choosing the reversionary pension.
Health Insurance Subsidy The board may pay each recipient of a retirement, disability or survivor's pension an amount to be determined by the board, which shall represent partial reimbursement for the cost of the recipient's health insurance coverage, with the total amount of payment not to exceed $65,000,000, or 75% of the total cost of health insurance coverage in any year.
Retirement Systems Reciprocal Act The Fund complies with the Retirement Systems Reciprocal Act (Chapter 40 Act 5 Article 20 of the Illinois Compiled Statutes) to provide reciprocal benefits if a member has service credit for other public employment in Illinois.
132 | Actuarial | Provisions Applicable to Members Hired on or after January 1, 2011, as a result of Public Act 96-0889 Final Average Compensation Based on last eight years of service and may not exceed $106,800, as automatically increased by the lesser of 3% or one-half of the annual increase in the consumer price index-u during the preceding 12-month calendar year.

Retirement Eligibility Normal retirement - 67 years old with 10 years of service.
Early Retirement - 62 years old with 10 years of service with a 6.0% per year reduction in benefit for each year age is under 67.

Annual Increases in Annuity Annual increases begin at the later of the first anniversary of retirement or age 67.

The annual increases are equal to the lesser of 3.0% or one-half of the annual increase in the consumer price index-u during the preceding 12- month calendar year and are not compounded.
Survivor Benefits Benefit equal to 66.67% of the earned retirement benefit at death.

Survivor benefits are increased by the lesser of 3.0% or one-half of the annual increase in the consumer price index-u during the preceding 12-month calendar year and are not compounded.
Salary and COLA Development for Members Hired on or After January 1, 2011 Year Ending CPI-U 1/2 CPI-U 2012 2013 2014 2015 2016 2017 2018 2019 2.00% 1.20% 1.70% —% 1.50% 2.20% 2.30% 1.00% 0.60% 0.85% —% 0.75% 1.10% 1.15% COLA 1.95% 1.00% 0.60% 0.85% —% 0.75% 1.10% 1.15% Maximum Annual Pensionable Earnings $ 108,882.60 109,971.43 110,631.26 111,571.63 111,571.63 112,408.42 113,644.91 114,951.83 | Actuarial | 133 SECTION I: ADDITIONAL PROJECTION DETAILS ____________________________________________________________________________________________ Table 18: Additional Projection Details - Actuarial Accrued Liability (Dollars in Millions) Current Inactives Actives Grand Totals Fiscal Year Retirees & Beneficiaries Deferreds Tier 1 Current Tier 2 Future Tier 2 Current Retirees, Beneficiaries, & Deferreds Actives Total 2019 $ 16,996.71 $ 536.15 $ 5,556.94 $ 162.36 $ 0.00 $ 17,532.86 $ 5,719.30 $ * This table has been adjusted to display information for the next 10 fiscal years.
For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.
Table 19: Additional Projection Details - Present Value of Future Benefits (Dollars in Millions) Current Inactives Actives Grand Totals Fiscal Year Retirees & Beneficiaries Deferreds Tier 1 Current Tier 2 Future Tier 2 Current Retirees, Beneficiaries, & Deferreds Actives Totals 2019 $ 16,996.71 $ 536.15 $ 9,218.14 $ 893.73 $ 0.00 $ 17,532.86 $ 10,111.87 $ * This table has been adjusted to display information for the next 10 fiscal years.
For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.
134 | Actuarial | Table 20: Additional Projection Details - Benefit Payments Including Administrative Expenses and Health Insurance Subsidy (Dollars in Millions) Current Inactives Actives Grand Totals Fiscal Year Retirees & Beneficiaries Deferreds Tier 1 Current Tier 2 Future Tier 2 Current Retirees, Beneficiaries, & Deferreds Actives Total 2020 $ 1,484.71 $ 14.30 $ 83.42 $ 43.21 $ 0.00 $ 1,499.00 $ 126.63 $ * This table has been adjusted to display information for the next 10 fiscal years.
For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.
Table 21: Additional Projection Details - Active Population, Covered Payroll, Employee Contributions and Normal Costs (Dollars in Millions) Tier 1 Active Members Current Tier 2 Active Members Future Tier 2 Active Members Fiscal Year Population Covered Payroll Employee Contributions Normal Cost Population Covered Payroll Employee Contributions Normal Cost Population Covered Payroll Employee Contributions Normal Cost 2019 18,632 $1,611.92 $ 145.07 $381.35 10,805 $ 591.13 $ 53.20 $ 66.64 0 $ 0.00 $ 0.00 $ * This table has been adjusted to display information for the next 10 fiscal years.
For the full table, please see the fiscal year 2019 actuarial valuation, which can be found at www.ctpf.org.

Employee contributions and normal cost are for the following year.

Normal cost includes administrative expenses and the health insurance subsidy of $65 million annually.

Covered payroll is capped for members hired after December 31, 2010, as defined by Public Act 96-0889.
Fiscal year ending June 30, 2019, includes 142 members expected to be hired to replace retirements and terminations that occurred in June 2019.

| Actuarial | 135 STATISTICAL This section includes summaries of statistical information about participating members, annuitants, and the benefits paid to them.
136 136 | Statistical | | Statistical | STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION FUND For the Year Ended June 30, 2019, with Comparative Totals for 9 Years ____________________________________________________________________________________________ Additions: Contributions: 2019 2018 2017 2016 2015 Intergovernmental, net (Employer) $ 808,570,000 $ 784,402,000 $ 746,840,000 $ 635,070,000 $ 643,667,000 Employee contributions 190,565,220 183,679,205 187,538,787 191,882,430 191,233,298 Allocation to Health Insurance Fund (59,089,369) (66,867,696) (49,000,701) — — $ 940,045,851 $ 901,213,509 $ 885,378,086 $ 826,952,430 $ 834,900,298 Investment Income Net investment income (loss) 513,576,400 896,704,544 1,233,003,939 (28,176,952) 381,688,431 Interest on late required contribution payments Miscellaneous 1,449,709 1,123,915 — — — 238,261 351,361 214,119 1,463,050 943,946 Total Additions (Losses) $ 1,455,310,221 $ 1,799,393,329 $ 2,118,596,144 $ 800,238,528 $ 1,217,532,675 Deductions: Pension Benefits: Retirement Survivors Disability Refunds: Separation Death Other Death Benefits: Heirs of Active Teachers 227,786 465,729 755,675 1,158,629 161,214 Heirs of Annuitants 3,406,487 3,485,282 2,524,967 3,558,888 3,031,417 $ 1,495,616,382 $ 1,466,280,439 $ 1,424,938,184 $ 1,384,826,398 $ 1,331,567,407 Administrative and Miscellaneous Expenses 25,621,894 21,521,303 13,781,343 12,298,862 11,705,562 Total Deductions $ 1,521,238,276 $ 1,487,801,742 $ 1,438,719,527 $ 1,397,125,260 $ 1,343,272,969 Net increase (decrease) (65,928,055) 311,591,587 679,876,617 (596,886,732) (125,740,294) Net assets held in trust for benefits: Beginning of period 11,104,765,514 10,793,173,927 10,093,067,588
 10,689,954,320 10,815,694,614 Transfer of residual assets to Pension Plan — — 20,229,722 * — — End of period $ 11,038,837,459 $ 11,104,765,514 $ 10,793,173,927 $ 10,093,067,588 $ 10,689,954,320 * The Health Insurance Fund is not in an OPEB Trust, nor are the OPEB assets restricted solely for OPEB.
| Statistical | 137 Additions: Contributions: Investment Income: Net investment income Miscellaneous Total Additions Deductions: Allocation of Employer Contribution plus Allocations from Prior Years $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 65,000,000 $ 65,000,000 $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 65,189,789 $ 65,051,868 — — 189,789 51,868 — — Total Deductions $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 66,673,226 $ 79,316,153 Net increase (decrease) Fiduciary Net Position Held in Trust for Pension Benefits: Beginning of period — (1,483,437) (14,264,285) 20,229,722 21,713,159 35,977,444 Transfer of residual assets to Pension Plan (20,229,722) — — End of period $ — $ — $ — $ 20,229,722 $ 21,713,159 — — — — — — — — — — Continued from previous page Additions: Contributions: 2014 2013 2012 2011 2010 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION HEALTH INSURANCE FUND For the Year Ended June 30, 2019, with Comparative Totals for 9 Years ____________________________________________________________________________________________ Intergovernmental, net (Employer) $ 585,416,141 $ 142,654,000 $ 138,729,011 $ 143,589,994 $ 290,759,950 2019 2018 2017 2016 2015 Employee contributions 187,846,065 188,356,294 187,141,384 185,882,636 194,621,551 Allocation to Health Insurance Fund — — — — — $ 773,262,206 $ 331,010,294 $ 325,870,395 $ 329,472,630 $ 485,381,501 Investment Income Net investment income (loss) 1,685,079,840 1,174,500,001 (38,124,125) 2,123,272,170 1,107,453,898 Interest on late required contribution payments Miscellaneous — — — — — — 431,790 55,307 — — Total Additions (Losses) $ 2,458,342,046 $ 1,505,510,295 $ 288,178,060 $ 2,452,800,107 $ 1,592,835,399 Health Insurance Premium Subsidy 58,611,532 66,333,655 49,000,701 66,673,226 79,316,153 Deductions: Pension Benefits: Retirement Survivors Disability Refunds: Separation Death Other Death Benefits: 1,211,523,930 1,173,343,019 1,062,373,677 999,323,111 943,252,537 44,428,213 41,503,227 38,812,556 36,196,804 33,738,810 13,882,921 13,472,748 12,698,514 12,019,044
 11,512,123 22,332,203 12,948,597 17,521,737 13,135,132 9,334,950 3,598,338 3,284,366 4,139,266 3,373,836 4,253,510 6,901,631 8,554,098 14,633,633 10,671,550 7,495,834 Heirs of Active Teachers 194,115 441,036 387,047 419,861 496,832 Heirs of Annuitants 3,480,505 3,553,273 2,937,334 2,840,999 2,449,315 $ 1,306,341,856 $ 1,257,100,364 $ 1,153,503,764 $ 1,077,980,337 $ 1,012,533,911 Administrative and Miscellaneous Expenses 10,494,139 11,537,394 10,120,434 9,527,938 8,800,848 Total Deductions $ 1,316,835,995 $ 1,268,637,758 $ 1,163,624,198 $ 1,087,508,275 $ 1,021,334,759 Net increase (decrease) 1,141,506,051 236,872,537 (875,446,138) 1,365,291,832 571,500,640 Net assets held in trust for benefits: Beginning of period 9,674,188,563 9,437,316,026 10,312,762,164 8,947,470,332 8,375,969,692 Transfer of residual assets to Pension Plan — — — — — End of period $ 10,815,694,614 $ 9,674,188,563 $ 9,437,316,026 $ 10,312,762,164 $ 8,947,470,332 138 | Statistical | STATEMENT OF CHANGES IN FIDUCIARY NET POSITION HEALTH INSURANCE FUND For the Year Ended June 30, 2019, with Comparative Totals for 9 Years ____________________________________________________________________________________________ Additions: Contributions: 2019 2018 2017 2016 2015 Allocation of Employer Contribution plus Allocations from Prior Years $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 65,000,000 $ 65,000,000 Investment Income: Net investment income Miscellaneous Total Additions Deductions: — — — — — — 189,789 51,868 — — $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 65,189,789 $ 65,051,868 Health Insurance Premium Subsidy 58,611,532 66,333,655 49,000,701 66,673,226 79,316,153 Total Deductions $ 58,611,532 $ 66,333,655 $ 49,000,701 $ 66,673,226 $ 79,316,153 Net increase (decrease) Fiduciary Net Position Held in Trust for Pension Benefits: Beginning of period Transfer of residual assets to Pension Plan — — — — — — — (1,483,437) (14,264,285) 20,229,722 21,713,159 35,977,444 (20,229,722) — — End of period $ — $ — $ — $
 20,229,722 $ 21,713,159 | Statistical | 139 Continued from previous page Additions: Contributions: Allocation of Employer Contribution plus Allocations from Prior Years Investment Income: 2014 2013 2012 2011 2010 ____________________________________________________________________________________________ $ 65,000,000 $ 65,000,000 $ 65,000,000 $ 65,000,000 $ 65,000,000 Retirees Disabled Retirees Beneficiaries Total Male Female Male Female Male Female Male Female ANNUITANTS As of June 30, 2019 Distribution of Current Annuitants by Benefit Type Net investment income 55,134 82,822 41,058 20,471 119,855 Miscellaneous Total Additions Deductions: 8,000,000 8,352,647 6,770,651 10,338,661 — $ 73,055,134 $ 73,435,469 $ 71,811,709 $ 75,359,132 $ 65,119,855 Health Insurance Premium Subsidy 72,874,594 71,763,523 69,011,323 78,892,292 79,953,873 Total Deductions $ 72,874,594 $ 71,763,523 $ 69,011,323 $ 78,892,292 $ 79,953,873 Net increase (decrease) 180,540 1,671,946 2,800,386 (3,533,160) (14,834,018) Fiduciary Net Position Held in Trust for Pension Benefits: Beginning of period 35,796,904 34,124,958 31,324,572 34,857,732 49,691,750 Transfer of residual assets to Pension Plan — — — — — End of period $ 35,977,444 $ 35,796,904 $ 34,124,958 $ 31,324,572 $ 34,857,732 Monthly Pension Amount $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3.001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 6,001 - 6,500 6,501 - 7,000 7,001 - 7,500 7,501 - 8,000 8,001 - 8,500 8,501 - 9,000 9,001 - — 1 — — 1 10 29 39 45 53 44 35 37 37 19 5 6 1 1 1 1 — — — 156 189 149 156 149 210 108 25 13 11 7 5 2 — — — — — — — 244 339 176 208 241 325 252 96 64 47 23 15 5 1 — — — — — 1 531 560 468 388 382 466 384 337 327 347 525 773 731 308 207 176 95 96
$ 9,500 & Over 265 Total 6,156 18,475 105 364 1,180 2,037 7,441 20,876 140 | Statistical | ANNUITANTS Distribution of Current Annuitants by Benefit Type As of June 30, 2019 ____________________________________________________________________________________________ Monthly Pension Amount $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3.001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 6,001 - 6,500 6,501 - 7,000 7,001 - 7,500 7,501 - 8,000 8,001 - 8,500 8,501 - 9,000 9,001 - 9,500 Retirees Disabled Retirees Beneficiaries Total Male Female Male Female Male Female Male Female — 1 — — 1 10 29 39 45 53 44 35 37 37 19 5 6 1 1 1 1 — — — 156 189 149 156 149 210 108 25 13 11 7 5 2 — — — — — — — 244 339 176 208 241 325 252 96 64 47 23 15 5 1 — — — — — $ 9,500 & Over 265 Total 6,156 18,475 105 364 1,180 2,037 7,441 20,876 | Statistical | 141 ANNUITANTS Distribution of Pensioners with Health Insurance Reimbursements by Size of Annuity As of June 30, 2019 ____________________________________________________________________________________________ SCHEDULE OF AVERAGE BENEFIT PAYMENTS FOR PERSONS RETIRED Within the Last 10 Years ____________________________________________________________________________________________ Monthly Pension Amount $ 0 - 499 500 - 999 1,000 - 1,499 1,500 - 1,999 2,000 - 2,499 2,500 - 2,999 3,000 - 3,499 3,500 - 3,999 4,000 - 4,499 4,500 - 4,999 5,000 - 5,499 5,500 - 5,999 6,000 - 6,499 6,500 - 6,999
 7,000 - 7,499 7,500 - 7,999 8,000 - 8,499 8,500 - 8,999 $ 9,000 & Over Total Represents only members who have purchased insurance from the Fund’s providers.
Health Insurance Male Female 0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30+ Years of Credited Service Average Monthly Pension 307 $ 803 $ 1,435 $ 2,331 $ 2,922 $ 3,672 $ Average Final Salary* 5,954 $ 4,909 $ 5,408 $ 6,139 $ 6,275 $ 6,413 $ Number of Retired Members 33 64 52 46 63 42 Average Monthly Pension 313 $ 802 $ 1,361 $ 2,363 $ 2,910 $ 3,944 $ Average Final Salary* 6,480 $ 4,994 $ 5,276 $ 6,252 $ 6,405 $ 6,936 $ Number of Retired Members 39 59 56 60 91 49 Average Monthly Pension 348 $ 842 $ 1,452 $ 2,522 $ 3,308 $ 4,142 $ Average Final Salary* 6,690 $ 5,457 $ 5,509 $ 6,696 $ 7,049 $ 7,173 $ Number of Retired Members 72 114 84 134 221 157 Average Monthly Pension 275 $ 856 $ 1,645 $ 2,761 $ 3,567 $ 4,422 $ Average FInal Salary* 5,623 $ 5,491 $ 6,180 $ 7,136 $ 7,495 $ 7,688 $ Number of Retired Members 56 114 91 186 380 256 Average Monthly Pension 262 $ 758 $ 1,648 $ 2,581 $ 3,477 $ 4,307 $ Average Final Salary* 6,555 $ 5,023 $ 6,309 $ 6,657 $ 7,376 $ 7,516 $ Number of Retired Members 46 89 74 102 184 120 7,819 21,520 Average Monthly Pension 275 $ 877 $ 1,606 $ 2,621 $ 3,530 $ 4,254 $ Average Final Salary* 6,587 $ 5,377 $ 5,891 $ 6,851 $ 7,555 $ 7,483 $ Number of Retired Members 47 104 117 107 269 172 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 Fiscal Year 2016 Fiscal Year 2017 Fiscal Year 2018 Fiscal Year 2019 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Average Monthly Pension 326 $ 840 $ 1,493 $ 2,432 $ 3,440 $ 4,294 $ Average Final Salary* 7,267 $ 5,266 $ 5,627 $ 6,515 $ 7,301 $ 7,711 $ Number of Retired Members 61 92 77 113 184 123 Average Monthly Pension 323 $ 734 $ 1,578 $ 2,516 $ 3,438 $ 4,301 $ Average Final Salary* 6,255 $ 4,332 $ 5,819 $ 6,705 $ 7,268 $ 7,612 $ Number of Retired Members 38 80 83 99 167 129 Average Monthly Benefit 336 $ 823 $ 1,503 $ 2,578 $ 3,471 $ 4,505 $ Average
 Final Salary* 6,507 $ 5,349 $ 5,502 $ 6,738 $ 7,407 $ 7,927 $ Number of Retired Persons 39 92 81 88 175 122 Average Monthly Benefit 305 $ 699 $ 1,634 $ 2,547 $ 3,672 $ 4,789 $ Average Final Salary* 6,069 $ 4,827 $ 6,098 $ 6,673 $ 7,644 $ 8,482 $ Number of Retired Persons 42 64 64 62 77 62 * The higher final average salaries in the 0 - 4 years of credited service are the result of a higher concentration of members with larger salaries who have service with other reciprocal pension plans.
Table does not include disabled members or surviving spouses.
| Statistical | SCHEDULE OF AVERAGE BENEFIT PAYMENTS FOR PERSONS RETIRED Within the Last 10 Years ____________________________________________________________________________________________ 0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30+ Years of Credited Service Fiscal Year 2010 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2011 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2012 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2013 Average Monthly Pension Average FInal Salary* Number of Retired Members Fiscal Year 2014 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2015 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2016 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2017 Average Monthly Pension Average Final Salary* Number of Retired Members Fiscal Year 2018 Average Monthly Benefit Average Final Salary* Number of Retired Persons Fiscal Year 2019 Average Monthly Benefit Average Final Salary* $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 307 $ 803 $ 1,435 $ 2,331 $ 2,922 $ 3,672 $ 5,954 $ 4,909 $ 5,408 $ 6,139 $ 6,275 $ 6,413 $ 33 64 52 46 63 42 313 $ 802 $ 1,361 $ 2,363 $ 2,910 $ 3,944 $ 6,480 $ 4,994 $ 5,276 $ 6,252 $ 6,405 $ 6,936 $ 39 59 56 60 91 49 348 $ 842 $ 1,452 $ 2,522 $ 3,308 $ 4,142 $ 6,690 $ 5,457 $ 5,509 $ 6,696 $ 7,049 $ 7,173 $ 72 114 84 134 221 157 275 $ 856 $ 1,645 $ 2,761 $ 3,567 $ 4,422 $ 5,623 $ 5,491 $ 6,180 $ 7,136 $ 7,495 $ 7,688 $ 56 114 91 186 380 256 262 $ 758 $ 1,648 $ 2,581 $ 3,477 $ 4,307 $ 6,555 $ 5,023 $ 6,309 $ 6,657 $ 7,376 $ 7,516 $ 46 89 74 102 184 120 275 $ 877 $ 1,606 $ 2,621 $ 3,530 $ 4,254 $ 6,587 $ 5,377 $ 5,891 $ 6,851 $ 7,555 $ 7,483 $ 47 104 117 107 269 172 326 $ 840 $ 1,493 $ 2,432 $ 3,440 $
 4,294 $ 7,267 $ 5,266 $ 5,627 $ 6,515 $ 7,301 $ 7,711 $ 61 92 77 113 184 123 323 $ 734 $ 1,578 $ 2,516 $ 3,438 $ 4,301 $ 6,255 $ 4,332 $ 5,819 $ 6,705 $ 7,268 $ 7,612 $ 38 80 83 99 167 129 336 $ 823 $ 1,503 $ 2,578 $ 3,471 $ 4,505 $ 6,507 $ 5,349 $ 5,502 $ 6,738 $ 7,407 $ 7,927 $ 39 92 81 88 175 122 305 $ 699 $ 1,634 $ 2,547 $ 3,672 $ 4,789 $ 6,069 $ 4,827 $ 6,098 $ 6,673 $ 7,644 $ 8,482 $ Number of Retired Persons * The higher final average salaries in the 0 - 4 years of credited service are the result of a higher concentration of members with larger salaries who have service with other reciprocal pension plans.
Table does not include disabled members or surviving spouses.

| Statistical | 143 PARTICIPATING MEMBERS Number of Active Members* ____________________________________________________________________________________________ Fiscal Year Male Participants Female Participants 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 7,145 6,949 7,048 7,253 7,215 7,033 7,077 6,961 6,954 6,903 * Active members consist of vested and non-vested employees.
23,867 23,184 23,318 23,716 23,439 22,673 22,466 21,894 22,004 22,392 Total 31,012 30,133 30,366 30,969 30,654 29,706 29,543 28,855 28,958 29,295 144 | Statistical | | Statistical | 145 146 | Statistical |