TRS 2011 Comprehensive Annual Financial Report

More documents

Recommendations

Info

TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 Notes to the Financial Statements The results of the actuarial valuation reflect a long-term perspective, are dependent on the actuarial assumptions used, and are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actual results can differ, as actual experience deviates from the assumptions. Even seemingly minor changes in the assumptions can materially change the liabilities, calculated contribution rates and funding periods. The actuarial assumptions used are designed to reduce shortterm volatility in the liabilities and assets. The plan provisions used in the actuarial valuation are based on the expectations of cost sharing between the employer and plan members. The calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of the valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of the benefits for financial reporting does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. C. FUNDED STATUS AND FUNDING PROGRESS – OPEB PLAN See TRS-Care funded status below (dollar amounts in millions): (7) (3) (4) (5) UAAL as (1) (2) Actuarial Unfunded Funded Ratio (6) a % of Valuation Actuarial Accrued AAL Assets as a Annual Covered as of Value Liability (UAAL) % of AAL Covered Payroll August 31 of Assets (AAL) (3)-(2) (2)/(3) Payroll (4)/(6) 2011 $891 $29,785 $28,894 3.0% $30,515 95% The Schedule of Funding Progress located immediately following the Notes to the Financial Statements in the Required Supplementary Information (RSI) presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits paid. The required schedule reflects information beginning for the fiscal year ended August 31, 2007 as it was the date of the first actuarial valuation for TRS-Care. NOTE 11: RISK MANAGEMENT The 77th Texas Legislature enacted the Texas Active School Employees Uniform Group Benefits Act (H.B. 3343), establishing a new statewide health coverage program for public school employees and their dependents. TRS began administering this program, known as TRS-ActiveCare, September 1, 2002. The plan is available to all public school districts, charter schools, education service centers and certain other employers. The risk associated with this program is retained by the plan’s participants, and no risk is transferred to the plan’s administrators, to employers, or to the state. NOTE 12: PENSION DISCLOSURE A. PLAN DESCRIPTION TRS is the administrator of a multiple-employer public employee retirement system (PERS). It is a cost-sharing PERS with one exception: risks and costs are generally not shared by the employing district but are the liability of the State of Texas. That is, unless the employing district is a senior college, medical school, or state agency, in which case the employer is considered the State of Texas. By statute, the State of Texas contributes to the retirement system an amount equal to the current authorized rate times the aggregate annual compensation of all members of the pension trust fund during that fiscal year. However, for fiscal year 2011 the Pension Trust Fund paid the employer’s share for its own employees. For members of the system entitled to the minimum salary for certain school personnel under Section 21.402 Education Code, the employing district shall pay the state’s contribution on the portion of the member’s salary that exceeds the statutory minimum. 60 FINANCIAL SECTION
TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011 Notes to the Financial Statements At August 31, 2011, the number of reporting entities was as follows: Independent School Districts 1,030 Charter Schools 197 Community and Junior Colleges 51 Senior Colleges and Universities 46 Regional Education Service Centers 20 Education Districts 5 Medical and Dental Schools 9 State Agencies 2 Total 1,360 All employees of public, state-supported educational institutions in Texas who are employed for one-half or more of the standard work load and who are not exempted from membership under Texas Government Code, Title 8, Section 822.002, are covered by the system. At August 31, 2011, TRS gross membership before actuarial adjustments consisted of the following: Retirees and beneficiaries currently receiving benefits 312,680 Terminated employees entitled to benefits but not yet receiving them 64,703 Total 377,383 Current Active Members: Fully-Vested 588,694 Non-Vested 368,698 Total 957,392 Benefits are established primarily under the authority of the provisions of Texas Constitution, Article XVI, Section 67 and Texas Government Code, Title 8, Subtitle C. The normal service retirement is at age 65 with 5 years of credited service or when the sum of the member’s age and years of credited service equals or exceeds 80 years. Reduced service retirement is at age 55 with 5 years of credited service and any age below 50 with 30 years of credited service. A member is fully vested after 5 years of creditable service and entitled to any benefit for which eligibility requirements have been met. B. CONTRIBUTIONS Contribution requirements are not actuarially determined but are established pursuant to the following state funding policy: (1) The state constitution requires the legislature to establish a member contribution rate of not less than 6% of the member’s annual compensation and a state contribution rate of not less than 6% and not more than 10% of the aggregate annual compensation of all members of the system during the fiscal year; (2) state statute prohibits benefit improvements, if as a result of the particular action, the time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. Actuarial implications of the funding provided in this manner are determined by the system’s actuary. Current contribution rates and contributions for fiscal year 2011 are shown in the table on the following page. For fiscal years 2010- 11 the State of Texas contribution rate was 6.644% and in 2009 the state’s rate was 6.58%. The member contribution rate was 6.4% for fiscal years 2009-2011. These rates are set by the General Appropriations Act. In certain instances, the reporting entity (public school, college, university, medical school or other entity) is required to make all or a portion of the state’s and/or member’s contribution. FINANCIAL SECTION 61
Page 1 and 2:
Teacher Retirement System of Texas
Page 3 and 4:
TEACHER RETIREMENT SYSTEM OF TEXAS
Page 5 and 6:
INTRODUCTORY SECTION
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14: TEACHER RETIREMENT SYSTEM OF TEXAS
Page 63: TEACHER RETIREMENT SYSTEM OF TEXAS
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163:
Teacher Retirement System of Texas
show all

TRS 2011 Comprehensive Annual Financial Report

Create successful ePaper yourself

Delete template?

Save as template?