The pension fund for most public school teachers in Illinois generated just 0.76 percent in fiscal 2012, a big drop from the 23.6 percent rate of return in the previous fiscal year, the Teachers' Retirement System reported on Thursday.

The fund saw its strongest gains from real estate but investments in international stocks lost 11.71 percent, which pulled down the positive gains in the other investment categories.

TRS, which is the state's largest public pension fund, said it ended fiscal 2012 on June 30 with $36.3 billion in assets.

Last month, the pension fund for teachers in all Illinois school districts with the exception of the Chicago Public Schools, lowered its long-term assumed investment rate of return to 8 percent from 8.5 percent.

The move will depress TRS' funded ratio to 42.5 percent and increase Illinois' fiscal 2014 payment to the fund to $3.36 billion instead of $3.07 billion under the previous return rate.

Faced with a huge $83 billion unfunded pension liability for its five pension funds, including TRS, Illinois is struggling to reduce pension payments that threaten to squeeze out funding for essential services.

Jerry Stermer, Illinois' budget director, said on Wednesday that he expects state lawmakers to take up pension reform legislation during a lame-duck session in early January. He also said Gov. Pat Quinn is backing legislation that would phase in over 12 years the responsibility of individual school districts to make payments into TRS that are currently made by the state.

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Editor's Note: With $36.3 billion in assets, why hasn't TRS separated itself from the financially struggling Illinois State Pension System? Why? Because then they would have to be responsible for managing investments in the private sector...as well as not providing a gateway for politicians to "borrow" against said assets...That said, imagine the profit margin if in fact this $36.3 billion fund would glean if it were privatized...