TRS 2011 Comprehensive Annual Financial Report

TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011
Notes to the Financial Statements
That report may be obtained by visiting the ERS website at www.ers.state.tx.us, by writing to the Finance Division of the Employees
Retirement System of Texas at 200 East 18th Street, Austin, Texas 78701, or by calling 1-877-275-4377.
Benefits and contribution provisions of the SRHP are not actuarially determined, but are authorized by state law and may be amended
by the Texas Legislature. For the year ended August 31, 2011, the system contributed up to a maximum monthly amount on a pay-asyou-go
basis toward a retiree’s health and basic life insurance premiums as follows:
Employer Contribution Rates
Retiree Health and Basic Life Premium
Type of Coverage FY 2011 FY 2010 FY 2009
Member Only $ 411.04 $ 385.38 $ 360.54
Member/Spouse $ 647.38 $ 605.70 $ 566.57
Member/Children $ 569.30 $ 532.90 $ 498.49
Member/Family $ 805.64 $ 753.22 $ 704.52
The system covers 100% of a Member Only premium and 50% of their additional premiums for family coverage. The basic plan
includes up to $2,500 for life insurance for the retiree. The retiree contributes any premium over and above the system’s contribution
for additional coverage. The board has adopted contributions based on rates set by the Texas Legislature on a biennial basis. At August
31, 2011, there were 173 retirees and their beneficiaries receiving post-employment health care and basic life insurance benefits.
Contractually required contributions to the SRHP are currently based on the annual pay-as-you-go expenses of the SRHP. For the year
ended August 31, 2011, 2010, and 2009 the system recognized expenditures of $1,113,697, $996,954 and $908,334, respectively, for
these benefits. The system has annually made 100 percent of its contractually required contributions to the SRHP.
Public School Employees
TRS, as trustee, administers the Texas Public School Retired Employees Group Insurance Program (TRS-Care) and the related fund
in accordance with Texas Insurance Code, Chapter 1575. Sections 1575.202 to 204 establish state, active employee, and public school
contributions. Section 1575.052 grants the board the authority to establish basic and optional group insurance coverage for participants.
TRS-Care is a cost-sharing, multiple-employer, defined benefit, other post-employment benefit (OPEB) plan that is currently funded
on a pay-as-you-go basis and is subject to change based on available funding. The Texas Legislature determines the funding of benefits
and has no continuing obligation to provide benefits beyond each fiscal year.
At the inception of the plan in fiscal year 1986, funding was projected to last 10 years through fiscal year 1995. The original funding
was sufficient to maintain the solvency of the fund through fiscal year 2000. Since that time, appropriations and contributions have been
established to be sufficient to provide benefits for the biennium.
Eligibility generally includes TRS public school retirees with more than 10 years of service and their dependents. Retirees can
receive a free basic level of coverage, and optional coverage is also available. All dependent coverage is optional. Basic coverage is a
comprehensive major medical group health insurance plan. During fiscal year 2011, deductibles were $1,800 for those eligible for Part
A of Medicare, $3,000 for those not eligible for Part A, but eligible for Part B, and $4,000 for those not eligible for either Part A or Part B.
At August 31, 2011, the number of reporting entities was:
Independent School Districts 1,029*
Charter Schools 197
Regional Education Service Centers 20
Education Districts 5
Total 1,251
*Excludes Windham School District which is not covered by OPEB.
In addition, other contributing entities included the State of Texas and the Federal Government.
58 FINANCIAL SECTION