Table of Contents Introduction Investments (cont.) Actuarial (cont.) 7 Board of Trustees 81 Geographical Distribution of the 109 Schedule of Retired Members and 8 Organizational Structure Real Estate Equity Portfolio Beneficiaries Added to and 9 Executive Staff 82 Private Equity Net Asset Value by Removed from the Benefit Payroll 10 Letter of Transmittal Investment Type 110 Independent Actuarial Review 15 President’s Message Private Equity Net Asset Value 16 Summary of Benefits by Geography 83 Domestic Fixed Income and High-Yield Statistical Financial Bonds Distribution Demographic & Economic Information Domestic Fixed Income and High-Yield 113 Number of Active Members, Retired 21 Independent Auditors’ Report Bonds Quality Distribution Members and Beneficiaries of Deceased 23 Management’s Discussion 84 Domestic Fixed Income 114 Distribution of Active Members by and Analysis Average Maturity Age and Years of Service Global Bonds Quality Distribution Distribution of Active Members Basic Financial Statements 85 Global Bonds Sector Distribution by Age 30 – Statements of Fiduciary Net Position Ten Largest Fixed Income Holdings 115 Distribution of Active Members 31 – Statements of Changes in 86 Real Estate Debt by Property Type by Service Fiduciary Net Position Breakdown of Real Estate 116 Active Members and Annuitants 32 – Notes to Financial Statements Debt Portfolio 1922-2020 87 Geographical Distribution of the 117 Number of Active Members by Tier Required Supplementary Information Real Estate Debt Portfolio 118 Retirement Statistics 56 Schedule of Changes in the Private Debt Net Asset Value by 120 Retirement Benefit Options and School Districts’ Net Pension Investment Type Percent of Election Liability (Asset) 88 Private Debt Net Asset Value Retired Members’ Characteristics 58 Schedule of the School Districts’ by Geography by Year of Retirement Net Pension Liability (Asset) Cash Equivalents Sector Distribution 121 Distribution of Benefits Paid Schedule of the School 89 Annual Performance History by County Districts’ Contributions 90 Investment Performance Results 122 Distribution of Retired Members 60 Schedule of Investment Returns 91 Manager Investment and Beneficiaries by Tier 61 Notes to Required Performance Results History of the Number of Supplementary Information 93 Corporate Governance New Retirees Securities Lending Program 123 Retired Members and Beneficiaries Other Supplemental Schedules 94 Schedule of Investment Fees 124 with Monthly Benefits by Decade 63 Schedules of Administrative Expenses and Expenses of Retirement 64 Schedules of Investment Expenses 95 Investment Advisory Committee Distribution of the Annual Benefit 65 Schedule of Consulting Fees Real Estate Advisory Committee of All Retired Members 96 Investment Consultants 124 History of the Monthly COLA Master Custodian 125 Distribution of Monthly COLA Investments Securities Lending Increase Commencing 69 Report on Investment Activity External Investment Managers September 2020 75 Asset Allocation & Advisors Distribution of Cumulative Changes in Net Asset Value Monthly COLA Commencing 76 Diversification of Investments September 2020 77 Domestic Equity Distribution Actuarial Domestic Equity Externally 103 Actuarial Certification Letter Financial Trends Information Managed Style Distribution 105 Summary of Plan Provisions and 126 Changes in Fiduciary Net Position 78 International Equity Actuarial Methods and Assumptions 127 Breakdown of Income Sources Style Distribution 106 Actuarial Present Value of 128 Benefits and Return of Global Equity Style Distribution Future Benefits Contributions by Type 79 Public Equity Holdings by Industry Distribution Funding Progress Operating Information Ten Largest Public Equity Holdings 107 – Funding Progress 130 Average Benefit Payments 80 Public Equity Country – Analysis of Funding Progress 132 Retired Members and Beneficiaries Exposure Distribution – Percent Funded by Type of Benefit Real Estate Equity by Property Type 108 Solvency Test 134 Principal Participating Employers 81 Breakdown of Real Estate Analysis of Financial Experience Equity Portfolio 109 History of Member Payroll and the Employer Contribution Rate 2 Strong. Resilient. Secure. NYSTRS.org Achievements NYSTRS.org Strong. Resilient. Secure. 3 Achievements 4 Strong. Resilient. Secure. NYSTRS.org Introduction Page 7 Board of Trustees 8 Organizational Structure 9 Executive Staff 10 Letter of Transmittal 15 President’s Message 16 Summary of Benefits Introduction BOARD OF TRUSTEES David P. Keefe Dr. L. Oliver Robinson President Vice President Hempstead Clifton Park Retired Teacher Member School Administrator Elected by NYSTRS Retirees Appointed by First Elected 2004 Commissioner of Education First Appointed 2010 Sheila Sullivan Buck Daniel J. Hogarty Jr. Rush-Henrietta Troy Teacher Member Bank Executive Elected by NYSTRS Delegates Elected by Board of Regents First Elected 2017 First Elected 2005 Elizabeth A. Chetney Jennifer J. Longtin Baldwinsville Ballston Lake Teacher Member School Boards Association Member Elected by NYSTRS Delegates Elected by Board of Regents First Elected 2019 First Elected 2019 Ron Gross Christopher Morin William Floyd Scarsdale Teacher Member School Boards Association Member Elected by NYSTRS Delegates Elected by Board of Regents First Elected 2017 First Elected 2019 Dr. Phyllis S. Harrington Nicholas Smirensky Oceanside Delmar School Administrator State Comptroller Appointee Appointed by First Appointed 2007 Commissioner of Education First Appointed 2010 NYSTRS.org Strong. Resilient. Secure. 7 Introduction ORGANIZATIONAL STRUCTURE — as of June 30, 2020 8 Strong. Resilient. Secure. NYSTRS.org Introduction EXECUTIVE STAFF — as of June 30, 2020 Thomas K. Lee Executive Director & Chief Investment Officer Beth Bonacquist David C. Gillan Michael Gregoire Chief Administrative Officer Managing Director of Real Estate Chief Technology Officer Frederick W. Herrmann Joseph J. Indelicato Jr. Noreen Jones Managing Director of Public Equities General Counsel Chief Financial Officer Kenneth R. Kasper Edward Rezny Michael A. Wolfe Jr. Director of Internal Audit Chief Customer Officer Managing Director of Fixed Income Gerald J. Yahoudy II Richard A. Young Managing Director of Private Equity Actuary NYSTRS.org Strong. Resilient. Secure. 9 Introduction LETTER OF TRANSMITTAL New York State Teachers’ Retirement System RETIREMENT BOARD 10 Corporate Woods Drive Albany, NY 12211-2395 David P. Keefe Hempstead (800) 348-7298 or (518) 447-2900 NYSTRS.org President L. Oliver Robinson Clifton Park Vice President Sheila Sullivan Buck Rush-Henrietta Thomas K. Lee, Executive Director & CIO Elizabeth A. Chetney Baldwinsville Ron Gross William Floyd Phyllis S. Harrington Oceanside Daniel J. Hogarty Troy Jennifer J. Longtin Ballston Lake Christopher Morin Scarsdale Nicholas Smirensky Delmar October 29, 2020 Trustees of the Retirement System Board: On behalf of System staff, I present you with the Comprehensive Annual Financial Report (CAFR) of the New York State Teachers’ Retirement System (NYSTRS or the System) for the fiscal years ended June 30, 2020 and 2019. This report complies with all requirements governing the preparation and contents of annual reports. History and Overview Created in 1921 by an act of the state Legislature, NYSTRS administers the fund from which most New York State public school teachers and administrators receive retirement and ancillary benefits. Retirement benefits are provided in accordance with New York State law and may not under the New York Constitution be diminished or impaired. A summary of NYSTRS benefits is provided on pages 16-17 of this report. The System is governed by a 10-member Board of Trustees, which sets policy and oversees operations consistent with its fiduciary obligations under applicable law. A staff of approximately 380 is responsible for the day-to-day administration. NYSTRS serves 822 employers – including public school districts, BOCES, institutions of higher education and charter schools that elect to participate. NYSTRS has 433,801 active and retired members, including beneficiaries (see chart below). Membership Figures — as of June 30, 2020 Active Members: 261,232 Retired Members: 166,008 Beneficiaries: 6,561 Total Membership: 433,801 See page 113 for additional membership information. The retirement fund is one of the 10 largest public funds in the U.S. based on portfolio size. NYSTRS is also consistently among the top-performing and best-funded public pension plans. Consistent receipt of required employee and employer contributions; a disciplined, risk-controlled investment policy; and partnerships with top-performing fund managers are major contributing factors to this stability. As a long-term investor with liabilities often not payable for three decades or more, Board and staff take a prudent approach to asset management. 10 Strong. Resilient. Secure. NYSTRS.org Introduction LETTER OF TRANSMITTAL (continued) Awards Recognition from various industry organizations further demonstrates the System’s commitment to excellence. Honors received within the most recently completed fiscal year include: Certificate of Achievement for Excellence in Financial Reporting, awarded by the Government Finance Officers Association (GFOA) of the United States and Canada. Given in recognition of the System’s 2019 Comprehensive Annual Financial Report (CAFR), the award certifies the report was prepared in conformity with the highest standards in government accounting and financial reporting. Award for Outstanding Achievement in Popular