Finance and Administration - Board of Trustees - The University of ...

Finance and Administration Committee - V. Annual Report of the Treasurer, 2011 - Information14.91% of annual covered payroll. Contribution requirementsfor the university are established and may be amended bythe TCRS’ Board of Trustees. The university’s contributionsto TCRS for the years ended June 30, 2011, 2010, and 2009,were $43,343,861.11, $37,266,850.27, and $37,963,757.88,respectively. Contributions met the requirements for each year.2. FEDERAL RETIREMENT PROGRAMPlan DescriptionThe University of Tennessee contributes to the FederalRetirement Program, a cost-sharing multiple-employerdefined benefit pension plan administered by the Civil ServiceRetirement System (CSRS) for participants employed prior toJanuary 1, 1984, and the Federal Employees Retirement System(FERS) for participants employed after December 31, 1983.Both systems provide retirement, death, and disability benefits,as well as annual cost-of-living adjustments, to plan membersand their beneficiaries. All regular full-time employees ofthe University of Tennessee Agricultural Extension Servicewho hold federal appointments for 51% or more of their timeare required to participate in either one of the two FederalRetirement Programs. For both systems, benefit provisions areestablished in federal statutes. Federal statutes are amended bythe U.S. Congress.CSRS and FERS issue publicly available financial reportsthat include financial statements and required supplementaryinformation. These reports may be obtained by writing to theOffice of Personnel Management, Retirement InformationOffice, P.O. Box 45, Boyers, PA 16017-0045, or by calling(202) 606-0500.Funding PolicyParticipating employees, with some exceptions, are requiredby federal statute to contribute 7.0% of covered salaries to theCSRS plan. The university is currently required to contribute7.0%. Contributions to CSRS for the year ended June 30, 2011,were $655,375.40, which consisted of $339,588.48 from theuniversity and $315,786.92 from the employees; contributionsfor the year ended June 30, 2010, were $795,846.34, whichconsisted of $411,178.79 from the university and $384,667.55from the employees; and contributions for the year ended June30, 2009, were $1,050,294.31, which consisted of $540,493.79from the university and $509,800.52 from the employees.Federal statute requires employees participating in FERS tocontribute 0.8% of their salaries to the Basic Benefit Plan. Theuniversity is required to contribute 11.7%. In addition, theuniversity is required to contribute 1% of each participant’ssalary to the Thrift Savings Plan plus up to an additional 4%depending upon employees’ contributions, which can rangefrom 0 to 10% of their salaries. Contributions for the BasicBenefit Plan were $1,050,369.80 for the year ended June30, 2011, which consisted of $67,950.44 from employeesand $982,419.36 from the university; $1,027,500.74 for theyear ended June 30, 2010, which consisted of $68,500.09from employees and $959,000.65 from the university; and$1,050,561.11 for the year ended June 30, 2009, whichconsisted of $70,037.34 from employees and $980,523.77 fromthe university. Contributions for the Thrift Savings Plan were$984,569.00 for the year ended June 30, 2011, which consistedof $586,628.00 from employees and $397,941.00 from theuniversity; $994,264.00 for the year ended June 30, 2010, whichconsisted of $592,984.00 from employees and $401,280.00from the university; and $1,065,023.00 for the year ended June30, 2009, which consisted of $653,541.00 from employeesand $411,482.00 from the university. Contributions met therequirements for each year.B. DEFINED CONTRIBUTION PLANS1. OPTIONAL RETIREMENT PLANS (ORP)Plan DescriptionThe university contributes to three defined contribution plans:Teachers Insurance and Annuity Association-College RetirementEquities Fund (TIAA-CREF), ING Life Insurance and AnnuityCompany, and Variable Annuity Life Insurance Company(VALIC). These plans are administered by the TennesseeDepartment of the Treasury. Each plan provides retirementbenefits to faculty and staff who are exempt from the overtimeprovisions of the Fair Labor Standards Act and who waivemembership in the TCRS. Benefits depend solely on amountscontributed to the plan plus investment earnings.The Plan provisions are established by state statute in Title 8,Chapter 35, Part 4, Tennessee Code Annotated. State statutes areamended by the Tennessee General Assembly.Funding PolicyPlan members are noncontributory. The university contributesan amount equal to 10% of the employee’s base salary below thesocial security wage base and 11% above the social security wagebase. Contribution requirements are established and amendedby state statute. The contributions made by the university to theplans for the year ended June 30, 2011, were $41,479,557.03and for the year ended June 30, 2010, were $40,627,517.44.Contributions met the requirements for each year.2. JOINT CONTRIBUTORY RETIREMENT SYSTEMPLAN A (JCRS-A)Plan DescriptionThe Joint Contributory Retirement System Plan A (JCRS-A)is a defined contribution plan with minimum benefits and isadministered by the Tennessee Consolidated Retirement Systemand TIAA-CREF. Employees who were enrolled in the TeachersInsurance and Annuity Association-College Retirement EquitiesFund (TIAA-CREF) before July 1977 are members of JCRS-A.Enrollment in this plan for new employees has been closedsince July 1977.Although JCRS-A members participate in ING, TIAA-CREF, orVALIC, they may also, under certain circumstances, receive asupplementary benefit from the State of Tennessee. Plan provisionsare established by Tennessee Code Annotated, Chapter 35, Part 4.State statutes are amended by the Tennessee General Assembly.32052