2011 Annual TCRS Report - Tennessee Department of Treasury

F I N A N C I A L S E C T I O N
TENNESSEE CONSOLIDATED RETIREMENT SYSTEM
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2011 & JUNE 30, 2010 (CONTINUED)
fiscal year 2010 can be attributed to more retirees being added to payroll than removed during this fiscal year. Total refunds
paid decreased $883,258 (2.4%) in fiscal year 2011 from fiscal year 2010. Total refunds paid had increased $4.4 million
(13.7%) in fiscal year 2010 over fiscal year 2009 and were attributed to the weak economy where more terminated members
are choosing to withdraw from the system instead of leaving the funds invested.
Administrative expenses for the year ended June 30, 2011 were $7,156,822, a decrease of 5.1 percent from fiscal year 2010
administrative expenses. The decrease was primarily due to the additional expense of the biennial actuarial study
performed in fiscal year 2010 and not being performed in fiscal year 2011. Administrative expenses for the year ended June
30, 2010 were $7,542,822, an increase of 4.7 percent over fiscal year 2009 administrative expenses.
Condensed financial information comparing the TCRS’ revenues and expenses for the past three fiscal years follows.
CHANGES IN PLAN NET ASSETS
For the For the FY11 - FY10 For the
Year Ended Year Ended Percentage Year Ended
June 30, 2011 June 30, 2010 Change June 30, 2009
FY10 - FY09
Percentage
Change
ADDITIONS
Contributions $ 1,255,926,943 $ 1,091,776,287 15.0 % $ 1,090,470,093 0.1 %
Investment income
Net appreciation (depreciation)
in fair value of investments 4,597,653,001 1,802,314,559 155.1 % (5,855,240,629) 130.8 %
Interest, dividends and other
investment income 963,313,744 918,842,338 4.8 % 1,018,043,263 (9.7) %
Less: Investment expense (32,213,243) (28,810,978) 11.8 % (21,288,813) 35.3 %
Net investment income 5,528,753,502 2,692,345,919 105.4 % (4,858,486,179) 155.4 %
TOTAL ADDITIONS 6,784,680,445 3,784,122,206 79.3 % (3,768,016,086) 200.4 %
DEDUCTIONS
Annuity benefits
Retirement benefits 1,248,538,286 1,164,713,725 7.2 % 1,083,753,159 7.5 %
Survivor benefits 76,298,394 71,380,041 6.9 % 66,732,833 7.0 %
Disability benefits 32,140,006 30,500,247 5.4 % 29,607,231 3.0 %
Cost of living 290,396,251 261,479,337 11.1 % 271,845,658 (3.8) %
Death benefits 5,498,139 7,114,008 (22.7) % 5,724,443 24.3 %
Refunds 35,539,393 36,422,651 (2.4) % 32,021,785 13.7 %
Administrative expenses 7,156,822 7,542,822 (5.1) % 7,202,572 4.7 %
TOTAL DEDUCTIONS 1,695,567,291 1,579,152,831 7.4 % 1,496,887,681 5.5 %
NET INCREASE (DECREASE) 5,089,113,154 2,204,969,375 130.8 % (5,264,903,767) 141.9 %
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS
BEGINNING OF YEAR 28,574,195,090 26,369,225,715 8.4 % 31,634,129,482 (16.6) %
END OF YEAR $33,663,308,244 $28,574,195,090 17.8 % $26,369,225,715 8.4 %
(continued)
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