TRS 2011 Comprehensive Annual Financial Report

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TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 November 1, 2011 BOARD OF TRUSTEES Teacher Retirement System of Texas 1000 Red River Street Austin, TX 78701-2698 Subject: GASB 43 Actuarial Valuation as of August 31, 2011 for TRS-Care Submitted in this report are the results of an Actuarial Valuation of the liabilities associated with the employer financed retiree health benefits provided through TRS-Care, a benefit program designed to provide post retirement medical benefits for certain members of the Teacher Retirement System of Texas (TRS). The date of the valuation was August 31, 2011. This report was prepared at the request of TRS. The actuarial calculations were prepared for purposes of complying with the requirements of Statements 43 and 45 of the Governmental Accounting Standards Board (GASB). The calculations reported herein have been made on a basis consistent with our understanding of these accounting standards. Determinations of the liability associated with the benefits described in this report for purposes other than satisfying the financial reporting requirements of TRS-Care and participating employers may produce significantly different results. The valuation was based upon information, furnished by TRS, concerning retiree health benefits, members’ census, and financial data. Data was checked for internal consistency but was not otherwise audited. Certain demographic and economic assumptions are identical to the set of demographic and economic assumptions adopted by the Board based on the 2010 Experience Study of TRS. Assumptions applicable only to TRS-Care have changed since the prior report, and they are disclosed in the assumptions section of this report. To the best of our knowledge, this report is complete and accurate and was made in accordance with generally recognized actuarial methods. One or more of the undersigned are members of the American Academy of Actuaries and meet the Qualification Standards of the Academy of Actuaries to render the actuarial opinion herein. Respectfully submitted, William J. Hickman Joseph P. Newton, FSA, MAAA Mehdi Riazi, ASA, EA, MAAA Senior Consultant Senior Consultant Actuary 120 ACTUARIAL SECTION
TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 Actuarial Information TRS-Care Actuarial Present Value of Future Benefits From Actuarial Valuation as of August 31, 2011 (With Comparative Data for August 31, 2010) Based on a 5.25% discount rate 2011 2010 Present Value of Benefits Being Paid Future Medical Claims $ 8,970,466,574 $ 7,098,035,116 Future Rx Claims 9,560,281,792 8,484,675,649 Retiree Premiums Collected (4,820,521,600) (4,664,226,865) NET PRESENT VALUE OF BENEFITS FOR CURRENT RETIREES $ 13,710,226,766 $ 10,918,483,900 Present Value of Benefits Payable in the Future to Present Active Members Future Medical Claims $ 22,513,074,606 $ 21,258,228,041 Future Rx Claims 19,700,869,923 20,923,712,165 Retiree Premiums Collected (10,795,062,742) (12,748,598,151) NET PRESENT VALUE OF BENEFITS FOR FUTURE RETIREES $ 31,418,881,787 $ 29,433,342,055 TOTAL ACTUARIAL PRESENT VALUE OF FUTURE BENEFITS $ 45,129,108,553 $ 40,351,825,955 Summary of Cost Items 2011 2010 Actuarial Present Value of Future Benefits $ 45,129,108,553 $ 40,351,825,955 Present Value of Future Normal Costs (15,343,939,596) (14,544,057,386) Actuarial Accrued Liability $ 29,785,168,957 $ 25,807,768,569 Actuarial Value of Assets (890,870,306) (814,964,303) UNFUNDED ACTUARIAL ACCRUED LIABILITY $ 28,894,298,651 $ 24,992,804,266 ACTUARIAL SECTION 121
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TRS 2011 Comprehensive Annual Financial Report

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