870173 TMRS CAFR new8 fix 049-081.qxd - Texas Municipal ...

SUMMARY OF ACTUARIAL LIABILITIES AND FUNDING PROGRESS
(AMOUNTS IN MILLIONS OF DOLLARS)
ANNUAL NET ASSETS PERCENTAGE UNFUNDED ANNUAL UAL DIVIDED AVERAGE
REPORT AVAILABLE ACTUARIAL FUNDED ACTUARIAL COVERED BY PAYROLL CITY CITY RATE
YEAR FOR BENEFITS LIABILITIES (1) / (2) LIABILITIES PAYROLL (4) / (5) CONTRIBUTIONS (7) / (5)
1 2 3 4 5 6 7 8
1999 $ 7,685.7 $ 9,039.7 85.0% $ 1,354.0 $ 2,614.0 51.8% $ 276.7 10.6%
2000 8,438.3 9,944.4 84.9 1,506.1 2,820.1 53.4 294.2 10.4
2001 9,236.6 10,866.9 85.0 1,630.3 3,061.0 53.3 323.9 10.6
2002 9,998.7 11,868.1 84.2 1,869.4 3,277.4 57.0 353.6 10.8
2003* 10,815.1 13,100.1 82.6 2,285.0 3,426.6 66.7 371.3 10.8
2004* 11,619.1 14,036.9 82.8 2,417.8 3,580.3 67.5 401.4 11.2
Each city participating in TMRS is financially responsible for its own plan. Therefore, the aggregate numbers shown above reflect
only the aggregate condition of TMRS and are not indicative of the status of any one plan.
The net assets available for benefits for 2004 in column (1) above exclude the unrealized appreciation in fair value of investments of
$315.5 million.
*New actuarial assumptions were first used in the December 31, 2003 valuation.
FUNDED PORTION OF ACTUARIAL LIABILITIES BY TYPE
(AMOUNTS IN MILLIONS OF DOLLARS)
ACTUARIAL LIABILITIES FOR
(1) (2) (3)
VALUATION
DATE
CURRENT
MEMBER
CONTRIBUTIONS
RETIREES
AND
BENEFICIARIES
CURRENT MEMBERS
(EMPLOYER
FINANCED PORTION)
NET ASSETS
AVAILABLE
FOR BENEFITS
PORTION OF ACTUARIAL
LIABILITIES
COVERED BY NET ASSETS
(1) (2) (3)
12/31/1999 $ 2,280.6 $ 2,406.1 $ 4,353.0 $ 7,685.7 100.0% 100.0% 68.9 %
12/31/2000 2,468.9 2,798.6 4,676.9 8,438.3 100.0 100.0 67.8
12/31/2001 2,691.2 3,111.6 5,064.1 9,236.6 100.0 100.0 67.8
12/31/2002 2,913.1 3,534.4 5,420.6 9,998.7 100.0 100.0 65.5
12/31/2003 3,120.8 4,050.7 5,928.6 10,815.1 100.0 100.0 61.5
12/31/2004 3,309.3 4,579.6 6,148.0 11,619.1 100.0 100.0 60.7
The financing objective for each TMRS plan is to finance long-term benefit promises through contributions that remain approximately
level from year to year as a percent of the city's payroll. If the contributions to each plan are level in concept and soundly executed,
each plan will pay all promised benefits when due--the ultimate test of financial soundness. Testing for level contribution rates is
the long-term test.
Presented above is one short-term means of checking a system's progress under its funding program. The present assets are compared
with: (1) current member contributions on deposit; (2) the liabilities for future benefits to present retired lives; and (3) the
employer-financed portion of the liabilities for service already rendered by current members. In a system that has been following
the discipline of level percent of payroll financing, the liabilities for current member contributions on deposit (liability 1) and the liabilities
for future benefits to present retired lives (liability 2) will be fully covered by present assets (except in rare circumstances).
In addition, the employer-financed portion of liabilities for service already rendered by current members (liability 3) will be at least
partially covered by the remainder of present assets. Generally, if a system has been using level cost financing, the funded portion
of liability 3 will increase over time, if there are no changes in the plan of benefits.
Each city participating in TMRS is financially responsible for its own plan. Therefore, the aggregate numbers shown above reflect
only the aggregate condition of TMRS and are not indicative of the status of any one plan.
T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004
99