The 2008 TMRS CAFR - Texas Municipal Retirement System

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Awards Public Pension Coordinating Council Public Pension Standards Award For Funding and Administration 2008 Presented to Texas Municipal Retirement System In recognition of meeting professional standards for plan funding and administration as set forth in the Public Pension Standards. Presented by the Public Pension Coordinating Council, a confederation of National Association of State Retirement Administrators (NASRA) National Conference on Public Employee Retirement Systems (NCPERS) National Council on Teacher Retirement (NCTR) Alan H. Winkle Program Administrator 6 TMRS Comprehensive Annual Financial Report 2008
Letter of Transmittal June 9, 2009 To: The Participants and Employers of the Texas Municipal Retirement System and the Readers of the Comprehensive Annual Financial Report We are pleased to present the Comprehensive Annual Financial Report (CAFR) of the Texas Municipal Retirement System (TMRS, or the System) for the year ended December 31, 2008. We hope you will find this report informative. The CAFR is prepared by the TMRS staff under the direction of the Board of Trustees. Management of TMRS assumes full responsibility for both the accuracy of the data and the completeness and fairness of its presentation, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatement. This report complies with generally accepted accounting principles as established by the Governmental Accounting Standards Board (GASB). The TMRS Act requires that independent auditors perform an annual audit on the financial statements contained in this report. The Board selected KPMG LLP to perform the audit for the 2008 fiscal year. For information regarding the scope of the audit, please see the Independent Auditors’ Report in the Financial Section. Management’s Discussion and Analysis (MD&A) is found in the Financial Section immediately following the Independent Auditors’ Report and provides an analysis of condensed financial information for the current and prior fiscal years. MD&A should be read in conjunction with this transmittal letter. About TMRS The Texas Municipal Retirement System is a statewide agent multiple-employer public employee retirement system created by law in 1947 to provide retirement, disability, and death benefits to employees of participating cities. TMRS has delivered financial security to generations of municipal employees. Accomplishments and Milestones in 2008 The 2008 fiscal year marked two major milestones for TMRS — asset diversification and a change in actuarial cost method. The Board of Trustees in November 2007 approved the diversification of the System’s assets from its predominately fixed income portfolio, beginning with dollar-cost-averaged commitments of 1% per month into equity index funds. By December 31, 2008, approximately 12% of the fund was invested in passively managed equity index funds: 6% in the Russell 3000 and 6% in the MSCI-EAFE. The remaining 88% of the fund was invested in fixed-income securities. The income rate of return on the $14.5 billion investment portfolio was 5.89%; total return for the year was (1.30%). In May 2008, TMRS undertook a project to reduce the duration of the System’s fixed income portfolio. At that time, the duration of TMRS’ bond portfolio was 13.8 years, exposing the System to significant interest rate risk. See the Investments section of this letter, for details about the restructuring of the fixed-income portfolio. TMRS Comprehensive Annual Financial Report 2008 7
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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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Funded Portion of Actuarial Liabili
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Summary of Actuarial Liabilities &
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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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The 2008 TMRS CAFR - Texas Municipal Retirement System

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