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

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NOTES TO FINANCIAL STATEMENTS CONTINUED The fair values of investments at December 31, 2004 and 2003, are categorized as follows: CATEGORY 1: U.S. Treasury securities U.S. government agency securities State/local government bonds Corporate bonds SUBTOTAL NOT CATEGORIZED: Investments held by broker-dealers under securities loans for cash collateral: U.S. Treasury securities U.S. government agency securities SUBTOTAL 2004 $ $77,626,202 3,368,586,648 618,096,198 2,718,887,371 6,783,196,419 $ 4,023,559,056 309,645,988 4,333,205,044 2003 188,153,580 2,933,528,036 - 2,142,704,263 5,264,385,879 3,723,265,532 1,314,385,631 5,037,651,163 TOTAL INVESTMENTS AT FAIR VALUE $ 11,116,401,463 $ 10,302,037,042 Short-term investments at December 31, 2004 and 2003, are not subject to categorization. Cash collateral received from securities lending activities is invested in a short-term investment fund managed by the custodial agent bank and, at December 31, 2004 and 2003, is not subject to categorization. 6. PROPERTY AND EQUIPMENT The following is a schedule of property and equipment balances as of December 31, 2004 and 2003, and changes to those account balances during the year ended December 31, 2004: PROPERTY AND EQUIPMENT: Balances, December 31, 2003 Additions Retirements Balances, December 31, 2004 LAND $254,388 - - 254,388 BUILDINGS AND IMPROVEMENTS $2,401,473 5,018,046 - 7,419,519 FURNITURE, SOFTWARE AND EQUIPMENT WORK IN PROGRESS TOTAL $5,014,917 106,909 (38,729) $3,269,793 1,728,023 - $10,940,571 6,852,978 (38,729) 5,083,097 4,997,816 17,754,820 ACCUMULATED DEPRECIATION: Balances, December 31, 2003 Additions Retirements Balances, December 31, 2004 - - - - 963,488 221,317 - 1,184,805 3,602,286 885,347 (38,729) - - - 4,565,774 1,106,664 (38,729) 4,448,904 - 5,633,709 NET BALANCES, DECEMBER 31, 2004 $254,388 $6,234,714 $634,193 $4,997,816 $12,121,111 Depreciation expense of $1,106,664 and $1,132,868 was incurred during 2004 and 2003, respectively. In accordance with Financial Accounting Standards Board Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use,” Work-in-Progress at December 31, 2004 and 2003, consists of capitalized costs of computer software that is being developed in-house and for internal use. 42 T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004
NOTES TO FINANCIAL STATEMENTS CONTINUED 7. FUND ALLOCATIONS The Act designates the calculation of the amount of interest to be distributed among the separate funds. On December 31 of each year, the Board of Trustees transfers from the interest reserve of the endowment fund the following amounts: (1) to the current service annuity reserve, supplemental disability benefits and supplemental death benefits funds, 5% interest on the mean amount of the respective fund during the year; (2) to the municipal accumulation fund, 5% (current interest) on the amount in the municipal accumulation fund on January 1 of that year; (3) to the interest reserve of the endowment fund, 5% (current interest) on the amount in the endowment fund on January 1 of that year; (4) to the employee savings fund, 5% (current interest) on the sum of the accumulated contributions in the employees savings fund credited on January 1 of that year to all persons who are members on December 31 of that year. The Board then provides for adequate reserves in the endowment fund. During the past several years, the Board has appropriated an additional amount of interest to be paid to the employee savings and municipal accumulation funds and an additional distributive benefit to the annuitants as of year-end. 8. RISK MANAGEMENT The System is exposed to various risks of loss related to torts; errors and omissions; violation of civil rights; theft of, damage to, and destruction of assets; and natural disasters. These risks, with the exception of pension and welfare fund fiduciary responsibility insurance, are covered by the System’s participation in the Texas Municipal League Intergovernmental Risk Pool. This is a pooled arrangement whereby the participants pay experience rated annual premiums that are designed to pay claims and build sufficient reserves so that the pool will be able to protect the participating entities with its own capital. The pool reinsures excess losses to preserve the capital base. Property physical damage is insured to replacement value with a $1,000 deductible and a limit of coverage of $2,896,600; automobile liability limits are set at $1,000,000 for each occurrence and physical damage is insured to actual value with a $10,000 deductible per occurrence; general liability is limited to $1,000,000 per occurrence; sudden events involving pollution are limited to $1,000,000 for each occurrence with an annual aggregate of $2,000,000; workers’ compensation coverage is in compliance with the workers’ compensation laws of the State of Texas with no accident or aggregate deductibles. The System maintains a pension and welfare fund fiduciary responsibility insurance policy with a commercial carrier. The policy has an aggregate limit of liability of $1,000,000. There have been no claims in any of the past three fiscal years. 9. COMMITMENTS Fiduciary Fund – Pension Trust Fund On January 9, 2004, the System entered into a contract for the construction of an addition to the TMRS building. The contract currently totals $8.1 million, of which approximately $5.0 million has been expended as of December 31, 2004. Completion of the construction project is estimated for 2005. T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004 43
Page 1 and 2: ★ Texas Municipal Retirement Syst
Page 3 and 4: TMRS® TEXAS MUNICIPAL RETIREMENT S
Page 5 and 6: TABLE OF CONTENTS ACTUARIAL SECTION
Page 7 and 8: DENISON Population: 22,773 INTRODUC
Page 9 and 10: LETTER OF TRANSMITTAL T M R S COMPR
Page 11 and 12: LETTER OF TRANSMITTAL CONTINUED T M
Page 13 and 14: LETTER OF TRANSMITTAL CONTINUED T M
Page 15 and 16: TMRS HIGHLIGHTS 2001 2002 2003 2004
Page 17 and 18: TMRS PROFESSIONAL ADVISORS LEGAL CO
Page 19 and 20: TMRS STAFF CONTINUED MEMBER SERVICE
Page 21 and 22: TMRS ADMINISTRATIVE ORGANIZATION T
Page 23 and 24: SUMMARY OF PLAN PROVISIONS CONTINUE
Page 25 and 26: SUMMARY OF PLAN PROVISIONS CONTINUE
Page 27 and 28: GREENVILLE FINANCIAL SECTION Popula
Page 29 and 30: INDEPENDENT AUDITORS’ REPORT CONT
Page 31 and 32: MANAGEMENT'S DISCUSSION AND ANALYSI
Page 33 and 34: STATEMENTS OF PLAN NET ASSETS FIDUC
Page 35 and 36: STATEMENTS OF NET ASSETS PROPRIETAR
Page 37 and 38: STATEMENTS OF CASH FLOWS PROPRIETAR
Page 39 and 40: NOTES TO FINANCIAL STATEMENTS CONTI
Page 41 and 42: NOTES TO FINANCIAL STATEMENTS CONTI
Page 43: NOTES TO FINANCIAL STATEMENTS CONTI
Page 47 and 48: SUPPLEMENTAL SCHEDULES SCHEDULE OF
Page 49 and 50: SUPPLEMENTAL SCHEDULES CONTINUED SC
Page 51 and 52: Additions Deductions Transfers to W
Page 67 and 68: Additions Deductions Transfers to S
Page 85 and 86: A small city 18 miles east of Waco
Page 87 and 88: REPORT ON INVESTMENT ACTIVITY CONTI
Page 89 and 90: SUMMARY OF INVESTMENTS AS OF DECEMB
Page 91 and 92: 2004 INVESTMENT RESULTS CONTINUED T
Page 93 and 94: LARGEST HOLDINGS (BY FAIR VALUE) AS
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TEXARKANA Population: 34,782 A Pine
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SUMMARY OF ACTUARIAL ASSUMPTIONS I.
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SUMMARY OF ACTUARIAL ASSUMPTIONS CO
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SUMMARY OF ACTUARIAL LIABILITIES AN
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CONTRIBUTION RATE INFORMATION CONTI
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ACTUARIAL VALUATION OF PARTICIPATIN
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WEIMAR Population: 1,981 STATISTICA
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SCHEDULE OF BENEFIT EXPENSES BY TYP
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SCHEDULE OF RETIRED MEMBERS BY TYPE
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PLAN PROVISIONS FOR PARTICIPATING M
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Vesting Requirement PLAN PROVISIONS
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