TRS 2011 Comprehensive Annual Financial Report

TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011
Actuarial Information Pension Trust Fund
Actuarial Value of Assets
The actuarial value of assets is equal to the market value of assets less a five-year phase in of the excess (shortfall) between
expected investment return and actual income with the resulting value not being less than 80% or more than 120% of the market
value of assets.
Funding of Unfunded Actuarial Accrued Liability
Funded by the excess of future state contributions required by Law over the amount of such contributions required to fund the
normal cost of benefits. Based on a study of all new entrants hired in the period from 2007 through 2010 and taking into account
all changes in benefit provisions, the normal cost for benefits provided by the System is 10.60% of payroll (6.40% by members
plus 4.20% by the State), which is 1.80% of payroll less than the total contributions required by Law. It is intended that the excess
amount of 1.80% of payroll will be used to amortize any unfunded actuarial accrued liabilities of the System, assuming that total
payroll increases by 3.50% per year.
As of the valuation as of August 31, 2011, these excess contributions of 1.80% of pay are insufficient to amortize the UAAL under
the required time period.
Assumed State Contribution Rate
Effective September 1, 2011, the General Appropriations Act decreased the State contribution rate to 6.00% for fiscal year 2012
and will increase it to 6.40% in fiscal year 2013. For purposes of determining the funding period, it was assumed that the State
contribution rate (6.40%) would remain in place indefinitely.
Schedule of Active Member Valuation Data
See table below:
Schedule of Active Member Valuation Data
Annual
Valuation Annual Average Percentage
as of Payroll in Annual Increase in
August 31 Number Thousands Pay Average Pay
2006 761,658 $28,397,283 $37,284 2.8%
2007 777,789 31,114,096 40,003 7.3
2008 801,455 33,237,904 41,472 3.7
2009 817,537 35,096,890 42,930 3.5
2010 834,060 36,628,844 43,916 2.3
2011 828,919 36,797,011 44,392 1.1
116 ACTUARIAL SECTION