TRS 2011 Comprehensive Annual Financial Report

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TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 Actuarial Information Pension Trust Fund b) Probability of Decrement Due to Withdrawal: The following tables are used for the first 10 years of employment. Probability of Decrement Due to Withdrawal Male Members Years of Service Age 0 1 2 3 4 5 6 7 8 9 20 0.2606 0.2266 0.1716 0.1335 0.1050 0.0000 0.0000 0.0000 0.0000 0.0000 30 0.2173 0.1890 0.1560 0.1233 0.0952 0.0789 0.0652 0.0648 0.0628 0.0536 40 0.2172 0.1888 0.1430 0.1253 0.0873 0.0833 0.0690 0.0608 0.0542 0.0464 50 0.1937 0.1684 0.1245 0.0993 0.0754 0.0684 0.0644 0.0544 0.0512 0.0466 60 0.2021 0.1757 0.1324 0.1160 0.0751 0.0664 0.0518 0.0495 0.0426 0.0341 70 0.2371 0.2062 0.1724 0.1174 0.1017 0.0000 0.0000 0.0000 0.0000 0.0000 Female Members Years of Service Age 0 1 2 3 4 5 6 7 8 9 20 0.1938 0.1685 0.1438 0.1263 0.1075 0.0000 0.0000 0.0000 0.0000 0.0000 30 0.1948 0.1694 0.1435 0.1218 0.1007 0.0935 0.0825 0.0724 0.0564 0.0570 40 0.1807 0.1571 0.1235 0.1052 0.0826 0.0743 0.0641 0.0578 0.0560 0.0459 50 0.1755 0.1526 0.1199 0.0971 0.0792 0.0708 0.0638 0.0549 0.0472 0.0402 60 0.1959 0.1703 0.1356 0.1082 0.0846 0.0660 0.0671 0.0509 0.0463 0.0438 70 0.2483 0.2159 0.1929 0.1994 0.1254 0.0000 0.0000 0.0000 0.0000 0.0000 c) Probability of Decrement Due to Retirement (Rates of Retirement - for members hired after August 21, 2007) Probability of Decrement Due to Retirement Male Members Years of Service Age 5-9 10-14 15-18 19 20-24 25-29 30+ 50 0.000 0.000 0.000 0.000 0.000 0.000 0.010 55 0.010 0.010 0.010 0.010 0.010 0.010 0.010 60 0.020 0.020 0.020 0.020 0.240 0.240 0.240 65 0.250 0.250 0.250 0.250 0.250 0.250 0.250 70 0.200 0.200 0.200 0.200 0.200 0.200 0.200 74 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Female Members Years of Service Age 5-9 10-14 15-18 19 20-24 25-29 30+ 50 0.000 0.000 0.000 0.000 0.000 0.000 0.010 55 0.010 0.010 0.010 0.010 0.010 0.010 0.010 60 0.030 0.030 0.030 0.030 0.250 0.250 0.250 65 0.250 0.250 0.250 0.250 0.250 0.250 0.250 70 0.250 0.250 0.250 0.250 0.250 0.250 0.250 74 1.000 1.000 1.000 1.000 1.000 1.000 1.000 For members hired after August 31, 2007, the retirement rates for members once they reach unreduced retirement eligibility at age 60 are increased 10% for each year the member is beyond the rule of 80 (i.e. if the member reached the Rule of 80 at age 58 then the probability of retirement at age 60 is 120% of the rate shown above). 114 ACTUARIAL SECTION
TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 Actuarial Information Pension Trust Fund 3. Rates of Salary Increase: The following table reflects an inflation rate of 3.00%, plus productivity component of 1.25%, plus step-rate/promotional component as shown: Rates of Salary Increase Annual Step Rate/ Promotional Rates of Increase Total Annual Rate of Increase Years of Service Male Members Female Members Male Members Female Members 1 3.00% 3.00% 7.25% 7.25% 2 3.00 3.00 7.25 7.25 3 2.75 2.75 7.00 7.00 4 2.50 2.50 6.75 6.75 5 2.25 2.25 6.50 6.50 6 2.00 2.00 6.25 6.25 7-8 1.75 1.75 6.00 6.00 9-10 1.50 1.50 5.75 5.75 11 1.25 1.25 5.50 5.50 12 1.00 1.00 5.25 5.25 13-18 0.75 0.75 5.00 5.00 19-21 0.50 0.50 4.75 4.75 22-24 0.25 0.25 4.50 4.50 25 or more 0.00 0.00 4.25 4.25 This weighted average salary increase rate is 6.49% based on the active member service distribution as of August 31, 2011. Disability Annuitants 1. Investment Rate of Return: 8.00% per annum, compounded annually. 2. Mortality: The PBGC Male Disabled Mortality Table for plan terminations after December 1, 1980, with a six-year setback and the PBGC Female Disabled Mortality Table for plan terminations after December 1, 1980, with a four-year setback. Service Retirement Annuitants, Nominees and Survivors 1. Investment Rate of Return: 8.00% per annum, compounded annually (benefit increase reserve account eliminated by the 1995 legislative session). 2. Mortality: Client specific tables; used for service retirement annuitants, beneficiaries and survivors. These tables are selected to best reflect the experience developed in the actuarial investigation as of August 31, 2010. Probability of Mortality and Life Expectancy Male Members Female Members Probability of Life Expectancy Probability of Life Expectancy Age Mortality (Years) Mortality (Years) 55 0.003684 27.42 0.002806 31.16 65 0.010893 18.83 0.006117 22.22 75 0.032206 11.53 0.019424 14.04 85 0.095215 6.14 0.068615 7.83 95 0.231740 3.33 0.163248 4.68 ACTUARIAL SECTION 115
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