aug 27 final collin county retirement plan briefing
TRANSCRIPT
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
1/12
Collin County RetirementPlan Briefing
Revised August 27, 2010
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
2/12
A percentage of your employees paycheck is deposited into his or her TCDRSaccount.
Your employees savings grow at an annual, compounded rate of 7% regardlessof market ups or downs.
You are also saving for your employees retirement. Your employer
contributions become matching dollars for employees that retire. Your rate isdetermined annually based on your projected assets and estimated benefitspromised.
At retirement, you match the employees final account balance, including
interest, $2.50 for every dollar saved. We calculate a monthly retirementpayment based on that account balance and matching.
Your retiring employee receives a monthly benefit payment for life.
Five Simple Steps
2
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
3/12
3
Benefits Are FundedPrimarily by Investment Earnings
76%InvestmentEarnings
11%EmployeeDeposits
13%EmployerDepositsTCDRS
Asset Growth
(1967 through 2009)
3
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
4/12
Collin County Retiree Profileas of Dec. 31, 2009
AverageAge at
Retirement
AverageService at
Retirement 1
Average
CurrentAnnual
Benefit 2
Average
AnnualBenefit at
Retirement
Average
ReplacementRatio at
Retirement 3
62 18 $22,000 $18,000 39%
Includes service with other TCDRS employers and proportionate service
Includes cost-of-living adjustments adopted by Collin County
Based on the average annual benefit at retirement and final salary as available
1
2
3
All averages reflect plan provisions in effect at the time of each retirement. The averagesare based on data that is currently available.
4
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
5/12
Projection of Collin County Retirees250% Match Continuing
Year Number Average Average Benefit
Ended of Retirees * Benefit in 2010 Dollars **
2009 281 $22,267 $22,267
2010 337 23,678 22,877
2011 385 24,984 23,3232012 432 26,316 23,735
2013 479 27,625 24,0732014 523 28,952 24,376
2015 567 30,153 24,529
2016 612 31,215 24,5352017 656 32,335 24,556
2018 700 33,510 24,588
2019 742 34,755 24,638
2020 782 36,230 24,815
2021 820 37,858 25,054
2022 857 39,409 25,1982023 890 40,973 25,312
2024 920 42,744 25,513
2025 949 44,541 25,687
Each years number of retirees reflects estimated number of new retirees and deaths. It isestimated that only between 25% and 30% of all Collin County employees will eventuallyreceive a monthly benefit in retirement.3.5% annual inflation
*
**5
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
6/12
Projection of Collin County Retirees200% Match Beginning in 2011
Each years number of retirees reflects estimated number of new retirees and deaths. It isestimated that only between 25% and 30% of all Collin County employees will eventuallyreceive a monthly benefit in retirement.3.5% annual inflation
Year Number Average Average Benefit
Ended of Retirees * Benefit in 2010 Dollars **
2009 281 $22,267 $22,267
2010 337 23,678 22,877
2011 385 24,964 23,3042012 432 26,255 23,680
2013 479 27,505 23,969
2014 523 28,758 24,214
2015 567 29,871 24,300
2016 612 30,834 24,2352017 656 31,846 24,184
2018 700 32,902 24,141
2019 742 34,013 24,113
2020 782 35,340 24,206
2021 820 36,808 24,359
2022 857 38,189 24,418
2023 890 39,571 24,446
2024 920 41,140 24,556
2025 949 42,721 24,638
*
**6
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
7/12
% of Final Salary Replaced by Collin CountyRetirement Benefit at Age 65 for a New Hire
Above based on an employee deposit rate of 7% and annual salary increases using the graded valuation salary
scale.
0%
10%
20%
30%
40%
50%
60%
70%
80%90%
100%
110%
10 Years 15 Years 20 Years 25 Years
250% Employer Matching Rate
200% Employer Matching Rate150% Employer Matching Rate
Final Salary
18 Yrs of ServiceAverage Collin County Retiree
7
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
8/12
Projection of Collin County Required RateUnder Current and Proposed Plans
These are projections and actual results will vary. The projections are based on the same data, methods andassumptions as those used in the December 31, 2009 actuarial valuation, including a long-term investment returnassumption of 8% per year. The required rate increases for the first nine years as the investment losses from 2008are recognized. The required rate drops after 20 years reflecting the UAAL being amortized over a closed 20-yearperiod.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Year
Current Plan w ith 250% Employer Match and No Lump-Sum Contribution
Current Plan with 250% Employer Match and a $5,000,000 Lump-Sum Contribution in 2010
Employer Match Decrease to 200% and a $5,000,000 Lump-Sum Contribution in 2010
Elected Rate
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Year
Current Plan with 250% Match, a 13.50% Elected Rate and No Lump-SumContribution
Current Plan with 250% Match, a 13.50% Elected Rate and a $5,000,000 Lump-SumContribution in 2010
Match Decrease to 200% with No Elected Rate and No Lump-SumContribution
Match Decrease to 200% with a 13.50% Elected Rate and a $5,000,000 Lump-SumContribution in 2010
13.50% Elected Rate
8
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
9/12
Projection of Collin County Funded RatioUnder Current and Proposed Plans
The projections are based on the same data, methods and assumptions as those used in the December 31, 2009
actuarial valuation, including a long-term investment return assumption of 8% per year.
0%
20%
40%
60%
80%
100%
120%
140%
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
Year
Current Plan w ith 250% Employer Match and No Lump-Sum Contribution
Current Plan w ith 250% Employer Match and a $5,000,000 Lump-Sum Contribution in 2010
Employer Match Decrease to 200% and a $5,000,000 Lump-Sum Contribution in 20100%
20%
40%
60%
80%
100%
120%
140%
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
Year
Current Plan with 250% Match, a 13.50% Elected Rate and No Lump-SumContribution
Current Plan with 250% Match, a 13.50% Elected Rate and a $5,000,000 Lump-SumContribution in 2010
Match Decrease to 200% with No Elected Rate and No Lump-SumContribution
Match Decrease to 200% with a 13.50% Elected Rate and a $5,000,000 Lump-SumContribution in 2010
9
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
10/12
0
200
400
600
800
1,000
1,200
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
Millions
Year
0%
20%
40%
60%
80%
100%
120%
Actuarial Accrued Liability
Actuarial Value of Assets
Funded Ratio
Projection of Current Collin County Plan Funded Ratio andUnfunded Liability Amortized Over 20-Year Closed Period
The difference between the actuarial accrued liability and the actuarial value of assets (the red area) represents the unfunded
actuarial accrued liability.The projections are based on the same data, methods and assumptions as those used in the December 31, 2009 actuarialvaluation, including a long-term investment return assumption of 8% per year. This projection assumes the current plan with250% matching.
Funded
Percentage
2009
Funded 85%
LIab 260
Assets 220
Unfunded 40
2017
Funded 83%
Liab 453
Assets 376
Unfunded 77
2023
Funded 91%Liab 641
Asset 581
Unfunded 60
2031
Funded 99%
LIab 952
Assets 947
Unfunded 5
10
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
11/12
1111
TCDRS Plan Design
We have a unique structure that combines the best features ofdefined benefit plans and defined contribution plans.
DefinedBenefitPlans
Example: traditional
pension plan
Benefit based onemployees final salaryand length of career
Monthly benefit lasts forlifetime
Employer assumesinvestment risk
TCDRS
An employee-savings
based plan
Benefit is based onemployees final accountbalance, plus employermatching
Employee must retire toearn employer matching
Interest rate fixed at 7%
Monthly benefit lasts for
lifetimeEmployer assumesinvestment risk
DefinedContribution
Plans
Example: 401(k)
Benefit based onemployees savings andemployer matching, ifprovided
Benefit varies according
to market performance
Benefit may not last alifetime
Employee assumes
investment risk
11
-
8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing
12/12