Teacher Retirement System of Texas Annual Financial Report: 1993 Page: 36
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TRS Annual Report 1993
Notes to the Financial Statements
D. Contributions Required and Contributions Made
The system's funding policy provides for periodic employer and employee contributions at actuarially determined rates
that, expressed as percentages of annual covered payroll, are sufficient to accumulate sufficient assets to pay benefits when
due. These rates, which are calculated using the entry age normal actuarial cost method, are established through state
statutes based upon testimony from the system's actuary. Actuarial implications due to changes between the recommended
rates and the established rates are determined by the system's actuary. A state statute prohibits benefit improvements
or contribution reductions if, as a result of the particular action, the time required to amortize TRS's unfunded actuarial
liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the
period would be increased by such action. Total contributions to the pension plan in 1993 amounted to $1,757,907,114 of which
$820,491,528 was from members, $899,663,369 was from the State of Texas, and $37,752,217 was from the local school
districts. These contributions consisted of $1,597,631,119 normal cost (12.46 percent of current covered payroll) and
$160,275,995 amortization of the unfunded actuarial accrued liability (1.25 percent of current covered payroll).
Significant actuarial assumptions used to compute the contribution requirements are the same as those used to
compute the pension benefit obligation. Current contribution rates are indicated in section A. of this note.
E. Ten-Year Historical Trend Information
This information is located immediately following the notes. This supplementary information provides information
about progress made in accumulating sufficient assets to pay benefits when due.
XII. ACTUARIAL VALUATION
The Actuarial Balance Sheet and Actuarial Letter, which were prepared by The Wyatt Company of Dallas, Texas,
are presented in the actuarial section of this report. These are considered to be necessary for adequate financial disclosure.
The board of trustees has established funding criteria for the actuarial balance sheet deficiency to be in the range of
approximately 30 years based on the assumption of a 6% growth in covered payroll. At August 31, 1993, the annual actuarial
valuation conducted by The Wyatt Company disclosed that the unfunded actuarial accrued liability of $3,440,297,245 will
be funded over a period of 25.1 years in the future assuming that payroll grows at an aggregate compound rate of 6% per year.36
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Teacher Retirement System of Texas. Teacher Retirement System of Texas Annual Financial Report: 1993, report, 1993; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth641193/m1/40/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.