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

More documents

Recommendations

Info

SUMMARY OF ACTUARIAL ASSUMPTIONS CONTINUED D. SERVICE RETIREMENT RATES MALE ENTRY AGE GROUPS FEMALE ENTRY AGE GROUPS AGE 20, 25, 30 35, 40, 45 50, 55, 60 20, 25, 30 35, 40, 45 50, 55, 60 40-44 45-49 50-54 55-59 60 61 62 63 64 65 66-69 70-74 75 and over .030 .060 .080 .120 .200 .240 .500 .280 .350 .750 .550 .500 1.000 - - - - .175 .150 .450 .250 .250 .600 .450 .500 1.000 - - - - .150 .120 .400 .250 .250 .550 .350 .500 1.000 .023 .045 .075 .100 .350 .250 .400 .200 .250 .500 .450 .500 1.000 - - - - .300 .140 .350 .200 .160 .450 .330 .500 1.000 - - - - .250 .120 .300 .200 .160 .450 .330 .500 1.000 Note: For cities without a 20-year/any age retirement provision, the rates for all ages under 45 are 0.000. For cities with fewer than 500 contributing members, the rates for all ages over 69 are 1.000. E. SERVICE RETIREE AND BENEFICIARY MORTALITY RATES 1. For calculating the actuarial liability and the retirement contribution rates, the UP-1984 Table with an age set back of one year for males and an age set back of eight years for females. 2. For determining the amount of the monthly retirement benefit at the time of retirement, the UP- 1984 Table with an age set back of two years for retirees and an age set back of eight years for beneficiaries. F. DISABLED ANNUITANT MORTALITY RATES 1. For calculating the actuarial liability and the retirement contribution rates, the 1983 Railroad Retirement Board Disabled Annuitants Mortality Table. 2. For determining the amount of monthly retirement benefit at the time of retirement, the UP-1984 Table with an age setback of two years for retirees and an age setback of eight years for beneficiaries. G. INTEREST RATE 1. An annual rate of 7.0% for calculating the actuarial liability and the retirement contribution rates for the retirement plan of each participating city. Because of the money-purchase nature of the plans, the interest rate assumption does not have as significant an impact on the results of the actuarial valuation as it does for a defined benefit plan. 2. An annual rate of 5.0% according to the TMRS Act for (1) accumulating prior service credit and updated service credit after the valuation date, (2) determining the amount of the monthly benefit at future dates of retirement or disability, and (3) calculating the actuarial liability of the system-wide Current Service Annuity Reserve Fund and of the system-wide Supplemental Disability Benefits Fund. H. SALARY INCREASES Since no benefits earned to date are dependent upon future salaries, there is no need to make an assumption about future salary increases. I. PAYROLL INCREASE A payroll increase of 3%, 4%, or 5% per year as is considered appropriate for each individual city based primarily on experience during the periods 1993-1997 and 1998-2002. J. VALUATION OF ASSETS TMRS continues to operate under a long-term, buy and hold philosophy, maintaining a predominantly bond portfolio (i.e.- no stock owned by the System at year-end). Neither a decline in nor rise in market value of the System’s fixed-income portfolio is of material significance to its objectives. The actuarial value of assets is adjusted cost for bonds (original cost adjusted for amortization of premium or accrual of discount), cost for short-term securities, and cost for corporate stocks, which is the same as book value. K. SMALL CITY METHODOLOGY For cities with fewer than 3 employees, more conservative methods and assumptions are used. These effectively establish a lower limit for the normal cost rate and shorten the amortization period for the unfunded actuarial liability from 25 years to the average years remaining until normal retirement. 96 T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004
SUMMARY OF ACTUARIAL ASSUMPTIONS CONTINUED II. The actuarial cost method used was the Unit Credit Actuarial Cost Method. Actuarial gains and losses are recognized immediately and decrease or increase the unfunded actuarial liability, which is being amortized over a constant 25-year amortization period as a level percent of payroll. This actuarial cost method has been used since the inception of TMRS in 1948. However, the use of a constant 25-year amortization period was begun in the December 31, 1993 valuation. For those cities that have adopted annually repeating updated service credits and annually repeating annuity increases, the expected benefits payable one year later are included so that the required contribution shown in this report is reflective of the amount required for the appropriate budget year. DEFINITIONS 1. ACTUARIAL GAIN (LOSS) - A measure of the difference between actual experience and that expected based upon the actuarial assumptions, during the period between two actuarial valuation dates, as determined in accordance with the actuarial cost method used. 2. ACTUARIAL LIABILITY - The actuarial present value of benefits attributable to all periods prior to the valuation date. 3. ACTUARIAL PRESENT VALUE - The value of an amount or series of amounts payable or receivable at various times, determined as of a given date (the valuation date) by the application of the actuarial assumptions. 4. AVERAGE AGE OF CONTRIBUTING MEMBERS - The average attained age as of the valuation date, weighted by the average monthly deposit for the year preceding the valuation date. 5. AVERAGE LENGTH OF SERVICE OF CONTRIBUTING MEMBERS - The average length of total credited service in TMRS as of the valuation date, weighted by the average monthly deposit for the year preceding the valuation date. 6. CURRENT SERVICE BENEFITS - Benefits attributable to the member's accumulated deposits and an amount provided by the municipality at retirement to match the accumulated deposits at the matching ratio in effect when the deposits were made. 7. NORMAL COST CONTRIBUTION RATE - The actuarial present value of benefits allocated to a valuation year by the Unit Credit Actuarial Cost Method, expressed as a percent of the covered payroll. It is equal to the sum for the members as of the valuation date of the actuarial present value of benefits that accrued during the year divided by the covered payroll during the year. 8. OVERFUNDED ACTUARIAL LIABILITY - The excess of assets over the actuarial liability. 9. PRIOR SERVICE BENEFITS - Benefits other than current service benefits. These include all benefits arising from prior service credits, special prior service credits, antecedent service credits, and updated service credits and from ad hoc increases in monthly benefit payments to annuitants. 10. PRIOR SERVICE CONTRIBUTION RATE - The level percentage of payroll required to amortize the unfunded or overfunded actuarial liability over a period of 25 years. If the rate is negative, it is offset against the normal cost contribution rate, with the limitation that the sum of the two rates cannot be negative. For cities with two or fewer employees, a more conservative amortization is used. 11. RETIREMENT CONTRIBUTION RATE - The sum of the normal cost contribution rate and the prior service contribution rate. 12. UNFUNDED ACTUARIAL LIABILITY - The excess of the actuarial liability over the assets. 13. UNIT CREDIT ACTUARIAL COST METHOD - A method under which the benefits of each individual included in the valuation are allocated by a consistent formula to valuation years. Current service benefits are a function of a member's deposits, and are allocated to the year in which deposits are made. Prior service benefits are allocated to the time preceding the date of the actuarial valuation. Under this method, actuarial gains (or losses), as they occur, reduce (or increase) the unfunded actuarial liability. T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004 97
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:
Page 43 and 44:
Page 45 and 46:
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
Page 95 and 96: TEXARKANA Population: 34,782 A Pine
Page 97: SUMMARY OF ACTUARIAL ASSUMPTIONS I.
Page 101 and 102: SUMMARY OF ACTUARIAL LIABILITIES AN
Page 103 and 104: CONTRIBUTION RATE INFORMATION CONTI
Page 105 and 106: ACTUARIAL VALUATION OF PARTICIPATIN
Page 149 and 150:
ACTUARIAL VALUATION OF PARTICIPATIN
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
WEIMAR Population: 1,981 STATISTICA
Page 157 and 158:
SCHEDULE OF BENEFIT EXPENSES BY TYP
Page 159 and 160:
SCHEDULE OF RETIRED MEMBERS BY TYPE
Page 161 and 162:
PLAN PROVISIONS FOR PARTICIPATING M
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191:
Vesting Requirement PLAN PROVISIONS
show all

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?