The 2008 TMRS CAFR - Texas Municipal Retirement System

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Notes to Financial Statements continued 4. Property and Equipment The following is a schedule of property and equipment balances as of December 31, 2008 and 2007, and changes to those account balances during the years then ended: Land Buildings and Improvements Furniture, Software, and Equipment Property and equipment Balances, December 31, 2006 $ 254,388 $ 11,860,286 $ 11,944,235 $ 24,058,909 Additions - 35,025 70,661 105,686 Retirements - - (73,727) (73,727) Balances, December 31, 2007 254,388 11,895,311 11,941,169 24,090,868 Additions - - 308,656 308,656 Retirements - - (94,195) (94,195) Balances, December 31, 2008 254,388 11,895,311 12,155,630 24,305,329 Accumulated depreciation Balances, December 31, 2006 - 1,851,834 7,811,276 9,663,110 Additions - 336,219 2,268,851 2,605,070 Retirements - - (73,727) (73,727) Balances, December 31, 2007 - 2,188,053 10,006,400 12,194,453 Additions - 336,219 1,412,055 1,748,274 Retirements - - (94,195) (94,195) Balances, December 31, 2008 - 2,524,272 11,324,260 13,848,532 Net balances, December 31, 2008 $ 254,388 $ 9,371,039 $ 831,370 $ 10,456,797 Total 5. 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 Municipality Accumulation Fund, current interest (lesser of 5% or calculated rate as specified in Section 855.316 of the TMRS Act) on the amount in the Municipality Accumulation Fund on January 1 of that year; (3) to the Interest Reserve of the Endowment Fund, current interest (lesser of 5% or calculated rate as specified in Section 855.316 of the TMRS Act) on the amount in the Endowment Fund on January 1 of that year; (4) to the Employees Saving Fund, current interest (lesser of 5% or calculated rate as specified in Section 855.316 of the TMRS Act) on the sum of the accumulated contributions in the Employees Saving Fund on January 1 of that year to all persons who are members on December 31 of that year. 46 TMRS Comprehensive Annual Financial Report 2008
Notes to Financial Statements continued The Board then provides for adequate reserves in the Endowment Fund. In addition, the Board, at its discretion, may appropriate an additional amount of interest to be paid to the Employees Saving and Municipality Accumulation Funds and an additional distributive benefit payment to the annuitants as of year-end. The System made no additional appropriations (above 5%) to the Employees Saving or Municipality Accumulation Funds and made no distributive benefit payments to annuitants during 2008 or 2007. 6. 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 $11,164,600; 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. No significant reductions in insurance coverage occurred in the past year, and settled claims have not exceeded insurance coverage in any of the past three fiscal years. 7. Subsequent Events During 2009, legislation was enacted that sets a guaranteed 5% interest credit to member accounts, sets the discount rate used in the annuity purchase rate for retirees at a minimum of 5%, provides a basis for utilizing unrealized gains/losses on investments for purposes of the interest credit, and allows municipality accounts to receive an annual interest credit at a rate different from the member rate, including negative interest. Market volatility attributable to the global credit crisis that began in 2008 continues into 2009, creating uncertainty with regard to the fair value of TMRS’ investment portfolio. As of April 30, 2009, the total fair value of investments is approximately $15.3 billion. ✦ TMRS Comprehensive Annual Financial Report 2008 47
Page 1 and 2: TMRS Texas Municipal Retirement Sys
Page 3 and 4: TMRS Texas Municipal Retirement Sys
Page 5 and 6: Table of Contents continued continu
Page 7 and 8: Introductory
Page 9 and 10: Letter of Transmittal June 9, 2009
Page 11 and 12: Letter of Transmittal continued 200
Page 13 and 14: Letter of Transmittal continued A C
Page 15 and 16: TMRS Board of Trustees Roel “Roy
Page 17 and 18: TMRS Professional Advisors Actuary
Page 19 and 20: Summary of Plan Provisions Purpose
Page 21 and 22: Summary of Plan Provisions continue
Page 23 and 24: Financial
Page 25 and 26: Independent Auditors’ Report cont
Page 27 and 28: Management’s Discussion and Analy
Page 29 and 30: Management’s Discussion and Analy
Page 31 and 32: Statements of Changes in Plan Net A
Page 33 and 34: Notes to Financial Statements conti
Page 47: Notes to Financial Statements conti
Page 51 and 52: Required Supplementary Information
Page 53 and 54: Supplemental Schedules Employees Sa
Page 55 and 56: Supplemental Schedules continued Sc
Page 57 and 58: Changes in Employees Saving Fund Ci
Page 59 and 60: Changes in Employees Saving Fund co
Page 83 and 84: Changes in Municipality Accumulatio
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Changes in Municipality Accumulatio
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Investment
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Report on Investment Activity conti
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Summary of Investments As of Decemb
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2008 Investment Results continued T
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Schedule of Investment Fees For the
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Actuarial
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Actuary’s Certification Letter (P
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Summary of Actuarial Assumptions (P
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Participating Employers & Active Me
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Funded Portion of Actuarial Liabili
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Contribution Rate Information (Pens
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Actuary’s Certification Letter (S
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Summary of Actuarial Assumptions (S
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Summary of Actuarial Liabilities &
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Actuarial Valuation of Participatin
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Statistical
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Schedule of Changes in Plan Net Ass
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Schedule of Average Benefit Payment
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Schedule of Principal Participating
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Plan Provisions For Participating M
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The 2008 TMRS CAFR - Texas Municipal Retirement System

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