Teacher Retirement System of Texas Annual Financial Report: 1984 Page: 3
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executive secretary's message
I am pleased to present this Annual Report for the Fiscal Year Ended August 31, 1984, the 47th year of
operation of the Teacher Retirement System of Texas and a year of growth, challenge, and achievement.
This report contains financial statements audited by the State Auditor, an actuarial valuation of the fiscal
year ended August 31, 1984 by The Wyatt Company of Dallas, a summary of benefits, and other pertinent
historical and statistical information.LEGISLATURE
On September 1, 1983, annual membership fees were in-
creased from $5 to $10 and a two year reduction of con-
tribution rates set by the 68th Legislature, Regular Ses-
sion, in 1983 began. The reduction, from 6.65 percent to
6 percent for members and from 8.5 percent to 7.1 per-
cent for the state, added .75 years to the actuarial funding
period during 1984. Another 1.5 years were added by the
salary adjustments provided in HB 72, the education re-
form bill. These losses were offset by actuarial gains in
other areas. The funding period remains below a 30 year
level which is considered good. Funding requirements and
actuarial trends are closely monitored by annual actuarial
valuations.
The 68th Legislature, Second Called Session, passed the
important education reform legislation (HB 72) and also
increased benefit payments to 70,184 TRS annuitants.
Increases ranged from 9.5 percent for those retired before
August 31, 1970 to 3 percent for those retired before
August 31, 1982. The increases were funded by TRS with
$133.4 million of released reserves which resulted from
greater than expected earnings by TRS investments. State
financed health insurance for retirees and increases to
keep up with inflation continue to be of concern.
Provision was also made during the session for school
districts to pay the state's TRS contribution on that por-
tion of salary exceeding the state statutory minimum sal-
ary beginning September 1, 1985. Some districts with a
high tax rate may qualify for exemption.
INVESTMENTS
TRS investment portfolio which reached $9.68 billion at
August 31, 1984, is well diversified into high quality in-
vestments: 31 percent equities; 62 percent fixed income;
3 percent real estate; and 4 percent cash equivalents.
Recently added real estate investments are in participating
mortgages and present an excellent alternative for invest-
ment diversification. Fifteen percent of the portfolio may
ultimately be invested in this area. TRS realized $126
million capital gains for the portfolio during the year.
Fund performance is measured by four different sources,
each reporting outstanding results. During the last five
years, the fund has outperformed the Standard and Poors
industrial Average for three years, tied it once, and was
slightly lower once. During 1984, 80 percent of all money
managers nationwide failed to outperform the average
while TRS succeeded. TRS has consistently been able to
achieve its main investment goals, meeting all actuarial
requirements and staying ahead of inflation.FEDERAL
TRS Board of Trustees and the Texas Legislature con-
tinued their opposition in 1984 to federal regulation of
public pensions. The Public Employee Pension Plan Re-
porting and Accountability Act was reintroduced in
Congress but failed to pass. It probably will be brought
up again. Congressional action removed most objections
to provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 which would have required changes in TRS
laws in order for the System to retain its status as a quali-
fied pension plan under the Internal Revenue Code.
SERVICE
During 1984, the members' annual Statement of Account
was redesigned to provide easier to read and more detailed
information. If a member is eligible for service retirement,
an estimate of retirement benefits and a description of
benefits available are printed on the statement.
Over 30,800 annuitants now make use of electronic fund
transfer for deposit of monthly annuity payments at their
financial institutions. This safe and convenient service
saves postage and processing costs for the System and is
expected to continue to grow.
During the 1983-84 school year, 5,735 service retire-
ments, a record number, were processed by TRS and the
outlook is for an even larger number in the coming years.
Requests for retirement information early in the 1984-85
school year were approximately 20 percent greater than
those in the previous year. This increase and the growing
complexity of retirement laws and rules have combined to
cause a greatly increased workload for TRS personnel who
provide individual retirement counseling and other ser-
vices for members. In 1983-84, service retirement coun-
selors met with 2,201 members for individual retirement
counseling at conferences held at 26 locations across
the state. Approximately 2,000 were counseled at the
TRS office in Austin.
A great effort is being made by the System to continue to
provide all services and to improve and expand those ser-
vices when possible.
Sincerely,
Bruce Hineman
EXECUTIVE SECRETARYTEACHER RETIREMENT SYSTEM OF TEXAS 3
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Teacher Retirement System of Texas. Teacher Retirement System of Texas Annual Financial Report: 1984, report, 1984; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth640380/m1/7/: accessed April 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.