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A Great Value for All Texans
TRS
Teacher Retirement System of TexasFebruary 2017
TRS Mission Statement
TRS Vision
Earning your trust every day.
TRS Core Values
Customer Satisfaction
Collaboration & Teamwork
Accountability
Respect
Ethics
Excellence
Employee Ful�llment
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Improving the retirement security of Texas educators by prudently investing and managing trust assets and delivering benefits that make a positive difference in members’ lives.
TRS Core Values
Teac
her R
etire
men
t Sys
tem
of T
exas
TRS has grown dramatically since
its inception in 1937, from 38,000 members to more than 1.5 million
participants.
T he Teacher Retirement
System of Texas (TRS) is one of
the largest retirement systems in the
nation. The system’s core mission is to
make a positive difference in the lives of
Texas educators by prudently investing
and managing trust assets and delivering
member benefits. Not only does TRS
provide great value to its members, it also
benefits all Texans by adding significant
dollars to the state and local economies.
A GreAt VAlue for All texAns
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Benefits Stay in Texas and Stimulate the Economy
Value to the Texas Economy
Upper Rio Grande $341
Upper East
Texas$539
NorthwestTexas$282
South Texas $902
Central Texas $545
Capital $718
West Texas$219
High Plains$381
Metroplex$2,236
SoutheastTexas $359
Gulf Coast $2,189Alamo
$1,191
Economic Benefits from Annuity Payments by Region
(2016 gross product in millions of dollars)
Coastal Bend$273.2
In 2016, TRS paid over $9.3 billion in retirement benefits to more than 393,000 retirees and their beneficiaries.
Over $8.9 billion of these retirement benefits were for service retirements, with the balance for disability and death and survivor benefits.
Over 94 percent of these benefit payments, or approximately $8.8 billion, went directly to retirees and their beneficiaries who live and spend these dollars in Texas.
Retirement Benefits
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Source: “The Impact of Annuity Payments by the Teacher Retirement System on Texas and Local Areas Within the State” (The Perryman Group, January 2017)
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Economic Stimulus
Retirees spending their benefits provide a notable economic stimulus to communities throughout the state.
When spent locally, these payments generate additional expenditures on an ongoing basis.
The estimated increase in business activity generated by retirement benefit payments is illustrated below:
Tax RevenueRetirement benefits and the economic stimulus the benefits produce generate tax revenue.
Over $975 million in state revenues and $368 million in local government revenues were generated in 2016.
Source: “The Impact of Annuity Payments by the Teacher Retirement System on Texas and Local Areas Within the State” (The Perryman Group, January 2017)
Every $1 in benefits paid by TRS generates $2.34
in economic activity.
Annual Impact of Payments on Texas Business (2016)
Retirement Benefits
Economic Stimulus
Tax Revenue
Total Expenditures $20.6 billion
Personal Income $6.1 billion
Permanent Jobs 131,422
Investing in Texas Businesses
TRS provides capital for businesses in Texas. TRS has $6.1 billion worth of holdings in Texas-based businesses and $11.4 billion invested or committed to Texas-based money managers.
Retiree Volunteer Hours
In 2015, retirees contributed almost 5.6 million volunteer hours to Texas communities valued at over $137 million.Source: Texas Retired Teachers Association
Economic Impact
by Industry
All major industrial sectors experienced gains in business activity resulting from TRS annuity payments. Industry groups experiencing the largest effects include:
Retail Trade $4,199.0 75,333
Other Services $1,012.8 17,641 Health Services $761.5 10,791
INDUSTRY GROSS PRODUCT JOBSIn millions
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Source: “The Impact of Annuity Payments by the Teacher Retirement System on Texas
and Local Areas Within the State” (The Perryman Group, January 2017)
(including restaurants)
Value for State & Member Contributions
Changes to Contributions
The member contribution rate increased beginning in fiscal year 2015 to 6.70 percent and will reach the ultimate contribution rate of 7.70 percent in fiscal year 2017.
In fiscal year 2015, non-Social Security school districts and charter schools began contributing 1.5 percent of the statutory minimum salary for employees whose positions are subject to the state minimum salary schedule.
Benefits from Member
Contributions
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Contributions to TRS Pension Fund
Contribution Rate
–
–
–
–
–
–
–
–
Fiscal Year State Member Employer1990 - 1991 7.65% 6.40%
1992 - 1995 7.31% 6.40%
1996 - 2007 6.00% 6.40%
2008 - 2009 6.58% 6.40%
2010 - 2011 6.64% 6.40%
2012 6.00% 6.40%
2013 6.40% 6.40%
2014 6.80% 6.40%
2015 6.80% 6.70% 1.50% 2016 6.80% 7.20% 1.50%
By contributing to TRS, school employees areinvesting in a retirement program thatprovides several major advantages.
Retirement SecurityOver 95 percent of TRS public schoolmembers do not participate in Social Security.As a result, employees in these districts arenot eligible for Social Security when theyretire.
Freedom from Investment DecisionsRather than having to buy and sellinvestments, rebalance portfolios, andreallocate assets based on their age, TRSmembers can count on a strong team tomanage their contributions before and afterretirement.
Protection from Investment RiskTRS members are assured that their pensionswill not be affected even by declines infinancial markets.
Certainty of PaymentsTRS members know that they will not outlivetheir monthly benefits. And, if they aremarried, they have the option of paymentsthat continue throughout their lifetime or thatof their spouse, whichever is longer.
In 2016, more than 847,000 active TRS members contributed over $2.9 billion to
the TRS Pension Trust Fund.
• Prior TRS actuarial modeling shows that to provide the same level of benefits, other plan designs (such as traditional defined contribution plans) are 10 percent to 130 percent more expensive than the current TRS defined benefit plan. Source: TRS Pension Benefit Design Study, Sept. 1, 2012
• The spending power of a typical retiree in the TRS defined benefit plan is about 44 percent more than it would be if that retiree were in a defined contribution plan. This means that a defined benefit plan has greater economic impact, including an impact on state and local tax revenues, than a defined contribution plan.
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Defined Benefit (TRS)
Members and state contribute to an investment pool which is professionally managed.
Retirement eligibility is based on service time and age. Members
receive an annuity determined by service time and salary.
Defined Contribution (Like 401(k), 403(b), & 457 plans)Investments are self-directed and member must manage account
for duration of retirement.
Defined Benefit
Defined Contribution
Total Expenditures $20.6 $14.0
Gross Product $9.9 $6.7
Personal Income $6.1 $4.2
Retail Sales $5.6 $3.8
Employment (Permanent Jobs)
131,422 89,282
Annual Economic Impact Monetary Values in Billions
Source: “The Impact of Annuity Payments by the Teacher Retirement System on Texas and Local Areas Within the State” (The Perryman Group, January 2017)
Source: “The Impact of Annuity Payments by the Teacher Retirement System on Texas and Local Areas Within the State” (The Perryman Group, January 2017)
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Value from Investments
Strengths of the TRS Pension Trust Fund
The TRS pension trust fund is:
Large – With a market value of $132.5 billion as of Jan. 1, 2017, TRS manages the sixth largest U.S. public pension fund. The fund’s size enables TRS to pursue large attractive opportunities not available to a majority of the marketplace.
Long-term – TRS’ size and membership composition allow for a long-term view in managing the investment portfolio and avoiding short-term investment limitations and constraints.
Liquid – With $94.5 billion in highly liquid assets as of Dec. 31, 2016 (approximately 70 percent of the total portfolio), the TRS portfolio is structured with access to liquidity well in excess of what is needed to pay regular monthly benefits.
Not Leveraged – The TRS investment portfolio has low levels of leverage (the use of borrowed funds to make investments). Because of this, TRS is better able to withstand periods of market volatility and less likely to sustain permanent capital losses during market downturns.
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Annualized Returns (Period ending Dec. 31, 2016)
Return (Percentage)
1
5
25
7.81%
8.41%
7.95%
Investments (62.2%)
Members (18.6%)
State & Employers (19.2%)
Over three-fifths of pension fund revenue comes from investments.
Time Period (Years)
3 5.47%
10 5.29%
Investment Performance is Vital to Funding Benefits
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TRS serves a vital role to more than 1.5 million active and retired members working in education.
• One out of every 20 Texans is a member of TRS; • 72 percent of annuitants are female; and • 393 annuitants are age 100 or older.
In 2016, TRS provided:
• $173 million in disability benefits; and• $266 million in death and survivor benefits.
TRS Provides Financial Security to
Members and Their Families
Value to Education
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32%23%24%14%
5%3%
MonthlyBenefit
Number of Retired
Members
Percent of Retired
Members
$1 - $1,000$1,001 - $2,000$2,001 - $3,000$3,001 - $4,000$4,001 - $5,000 >$5,000
TOTAL
125,321
90,40193,358 54,73519,60610,493
100.0%393,914
2016 Benefit Distribution
2016 average monthly life annuity: $2,035
Investment Performance is Vital to Funding Benefits
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High Quality Service to Satisfied Members
In 2016, retiree satisfaction was particularly high, with an overall approval rating (satisfied or very satisfied) of 96.5 percent. Active members also gave TRS an overall rating (satisfied or very satisfied) of 88.8 percent.
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Continuously Improving Member Services
Source: 2016 TRS Member Satisfaction Survey, Texas A&M University – Public Policy Research Institute
As a retiree, you can: • View the most recent 1099-R form(s) • Change income tax withholding • View annual TRS-Care health benefits • View annuity verification • Sign up for email subscriptions
MyTRS allows active members and retirees to conduct convenient business transactions online, review important announcements, update contact information and receive TRS publications electronically.
As an active member, you can: • Calculate retirement estimates • View annual statements • Email a question to a benefit counselor • Register for group benefit presentations • Sign up for email subscriptions
MyTRS
Remote CounselingTRS offers members the option to meet with a counselor through the internet. All that is needed is a personal computer or tablet with a camera and a reliable internet connection. To schedule a live video counseling session, call 800-223-8778.
Board MeetingsTRS provides live webcasts of all board meetings. Board meeting agendas are linked to the meeting videos and archived for later viewing. Board meeting books are available online while watching a live broadcast. They are then archived for easy on-demand viewing through a cataloged, searchable agenda item menu.
Social MediaVisit us at www.trs.texas.gov and click on the social media icons.
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Low Administrative Cost
According to an independent study, the pension administration cost of TRS is well below that of other similarly sized systems.
Source: “Defined Benefit Administration Benchmarking Analysis, Fiscal Year 2015,” CEM Benchmarking, Inc. (April 2016)
TRS Facilitates Several Valuable Programs
TRS-Care – The health care program for public school retirees expended over $1.5 billion for services covering over 261,000 participants in 2016.
403(b) Certification and Product Registration – TRS publishes information on companies meeting 403(b) certification requirements and the 403(b) products registered by these companies.
TRS-ActiveCare – The health care program for active public school employees expended almost $2.0 billion for services covering over 484,000 participants in 2016.
In addition to delivering pension benefits to public educators, TRS offers participation in other optional health and retirement programs for members:
A large part of the $3.5 billion in expenditures for
TRS-Care and TRS-ActiveCare is paid to providers in Texas.
403(b)
$0
$20
$40
$60
$80
$100
TRS Peer Average
$29
$92
Pension Administration Cost
Per Active Member and Annuitant
ANDERSON 20.7 949
ANDREWS 6.6 255
ANGELINA 33.6 1,564
ARANSAS 13.5 591
ARCHER 4.0 194
ARMSTRONG 1.1 - 5.0 50 - 250
ATASCOSA 19.7 885
AUSTIN 15.3 641
BAILEY 1.9 104
BANDERA 12.4 527
BASTROP 33.0 1,533
BAYLOR 2.1 91
BEE 12.0 576
BELL 96.6 4,207
BEXAR 587.4 25,351
BLANCO 6.9 295
BORDEN < 1.1 < 50
BOSQUE 10.8 487
BOWIE 36.6 1,581
BRAZORIA 119.5 4,756
BRAZOS 108.2 4,653
BREWSTER 5.0 - 11.0 251 - 500
BRISCOE < 1.1 < 50
BROOKS 4.8 216
BROWN 20.7 937
BURLESON 11.0 - 25.0 500 - 1,200
BURNET 29.2 1,184
CALDWELL 19.0 881
CALHOUN 9.4 425
CALLAHAN 7.3 313
CAMERON 134.9 5,677
CAMP 5.8 263
CARSON 3.5 156
CASS 15.6 705
CASTRO 2.6 119
CHAMBERS 17.5 691
CHEROKEE 19.8 912
CHILDRESS 2.9 134
CLAY 5.3 248
COCHRAN 1.4 54
COKE 1.1 - 5.0 50 - 250
COLEMAN 5.2 235
COLLIN 198.8 7,605
COLLINGSWORTH 1.8 82
COLORADO 12.2 522
COMAL 87.1 3,382
COMANCHE 9.0 390
CONCHO 2.1 97
COOKE 16.8 749
CORYELL 20.3 933
COTTLE 1.1 - 5.0 50 - 250
CRANE 1.9 77
CROCKETT 1.4 75
CROSBY 2.9 143
CULBERSON < 1.1 < 50
DALLAM 1.1 62
DALLAS 585.2 22,543
DAWSON 4.7 223
DE WITT 9.7 473
DEAF SMITH 5.0 249
DELTA 1.1 - 5.0 50 - 250
DENTON 193.4 7,557
DICKENS 1.2 63
DIMMIT 4.3 203
DONLEY 2.1 98
DUVAL 7.3 337
EASTLAND 9.7 443
ECTOR 38.8 1,680
EDWARDS 1.1 - 5.0 50 - 250
EL PASO 250.0 11,201
ELLIS 60.5 2,387
ERATH 21.8 956
FALLS 6.4 302
FANNIN 15.3 703
FAYETTE 15.6 682
FISHER 1.1 - 5.0 50 - 250
FLOYD 3.3 164
FOARD < 1.1 < 50
FORT BEND 216.7 8,151
FRANKLIN 5.3 210
FREESTONE 8.5 392
FRIO 6.1 286
GAINES 5.1 224
GALVESTON 189.4 7,610
GARZA 1.9 89
GILLESPIE 11.0 - 25.0 500 - 1,200
GLASSCOCK < 1.1 < 50
GOLIAD 5.1 202
GONZALES 9.1 422
GRAY 7.3 333
GRAYSON 51.2 2,207
GREGG 51.2 2,226
GRIMES 14.3 656
GUADALUPE 54.4 2,389
HALE 12.7 525
HALL 1.1 59
HAMILTON 5.0 - 11.0 251 - 500
HANSFORD 2.3 97
HARDEMAN 2.5 108
HARDIN 22.7 1,068
HARRIS 1073.7 43,052
HARRISON 25.4 1,169
HARTLEY 1.7 80
HASKELL 4.1 161
HAYS 79.6 3,356
HEMPHILL 1.6 72
HENDERSON 37.0 1,658
HIDALGO 235.0 10,043
HILL 18.0 796
HOCKLEY 12.7 550
HOOD 35.4 1,429
HOPKINS 15.2 718
HOUSTON 11.5 524
HOWARD 11.0 512
HUDSPETH 1.1 57
HUNT 35.4 1,569
HUTCHINSON 7.6 337
IRION < 1.1 < 50
JACK 3.4 154
JACKSON 8.2 331
JASPER 18.8 808
JEFF DAVIS 1.1 - 5.0 50 - 250
JEFFERSON 101.8 4,236
JIM HOGG 3.4 143
JIM WELLS 18.1 858
JOHNSON 49.3 2,140
JONES 6.5 308
KARNES 7.2 348
KAUFMAN 37.5 1,559
COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS
$ $ $
12
KENDALL 28.5 1,068
KENEDY < 1.1 < 50
KENT < 1.1 < 50
KERR 31.0 1,329
KIMBLE 3.2 138
KING < 1.1 < 50
KINNEY 2.4 97
KLEBERG 18.3 855
KNOX 1.1 - 5.0 50 - 250
LA SALLE 2.6 107
LAMAR 11.0 - 25.0 500 - 1,200
LAMB 5.0 234
LAMPASAS 11.0 - 25.0 500 - 1,200
LAVACA 11.7 544
LEE 7.9 373
LEON 11.1 492
LIBERTY 22.7 1,026
LIMESTONE 10.7 474
LIPSCOMB 1.8 80
LIVE OAK 5.2 247
LLANO 11.0 - 25.0 500 - 1,200
LOVING < 1.1 < 50
LUBBOCK 141.9 5,740
LYNN 2.9 126
MADISON 5.8 273
MARION 4.1 193
MARTIN 1.7 79
MASON 1.1 - 5.0 50 - 250
MATAGORDA 17.4 755
MAVERICK 17.0 670
MCCULLOCH 5.6 248
MCLENNAN 90.7 4,025
MCMULLEN < 1.1 < 50
MEDINA 23.8 1,040
MENARD 1.4 69
MIDLAND 43.0 1,779
MILAM 12.4 574
MILLS 1.1 - 5.0 50 - 250
MITCHELL 3.4 177
MONTAGUE 10.2 445
MONTGOMERY 164.8 6,733
MOORE 5.9 215
MORRIS 7.6 327
MOTLEY < 1.1 < 50
NACOGDOCHES 35.8 1,538
NAVARRO 20.2 877
NEWTON 4.6 227
NOLAN 8.0 370
NUECES 134.1 5,675
OCHILTREE 2.8 128
OLDHAM 1.1 - 5.0 50 - 250
ORANGE 31.6 1,463
PALO PINTO 11.4 504
PANOLA 10.6 481
PARKER 47.4 1,967
PARMER 2.9 136
PECOS 6.0 273
POLK 24.8 1,091
POTTER 27.2 1,345
PRESIDIO 2.8 119
RAINS 4.9 237
RANDALL 70.9 2,943
REAGAN < 1.1 < 50
REAL 1.1 - 5.0 50 - 250
RED RIVER 5.7 284
REEVES 4.0 197
REFUGIO 3.7 169
ROBERTS < 1.1 < 50
ROBERTSON 11.2 528
ROCKWALL 33.6 1,265
RUNNELS 6.2 268
RUSK 22.7 1,040
SABINE 5.0 242
SAN AUGUSTINE 4.9 218
SAN JACINTO 13.0 558
SAN PATRICIO 25.4 1,205
SAN SABA 1.1 - 5.0 50 - 250
SCHLEICHER 1.6 74
SCURRY 9.3 373
SHACKELFORD 1.6 64
SHELBY 11.1 496
SHERMAN < 1.1 < 50
SMITH 101.4 4,286
SOMERVELL 5.8 242
STARR 19.7 956
STEPHENS 4.2 173
STERLING < 1.1 < 50
STONEWALL < 1.1 < 50
SUTTON 1.9 75
SWISHER 3.7 174
TARRANT 507.1 20,078
TAYLOR 63.8 2,509
TERRELL < 1.1 < 50
TERRY 5.2 221
THROCKMORTON 1.1 - 5.0 50 - 250
TITUS 11.2 486
TOM GREEN 50.7 2,149
TRAVIS 338.5 13,458
TRINITY 8.6 394
TYLER 9.3 433
UPSHUR 16.3 760
UPTON 1.2 51
UVALDE 14.1 646
VAL VERDE 18.9 787
VAN ZANDT 23.7 1,090
VICTORIA 37.1 1,689
WALKER 40.2 1,599
WALLER 21.9 908
WARD 4.4 207
WASHINGTON 20.2 890
WEBB 74.3 2,973
WHARTON 23.0 986
WHEELER 2.6 121
WICHITA 47.2 1,961
WILBARGER 6.6 294
WILLACY 9.5 417
WILLIAMSON 163.5 6,666
WILSON 21.0 926
WINKLER 3.2 127
WISE 21.3 916
WOOD 24.7 1,069
YOAKUM 3.8 159
YOUNG 8.3 379
ZAPATA 5.6 244
ZAVALA 5.0 223
- TRS has provided selected data in ranges to avoid disclosure of confidential information and to comply with Sections 552.0038 and
825.507, Texas Government Code.
COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS COUNTY NAME
ANNUITYPAYMENTS(in millions)
NUMBER OFANNUITANTS
$ $ $
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Board of Trustees
R. David Kelly, Chair Plano
Dolores Ramirez, Vice ChairSan Benito
T. Karen Charleston Houston
Joe ColonnettaDallas
David CorpusHumble
John ElliottAustin
Dr. Greg GibsonSchertz
Christopher MossLufkin
Anita Smith Palmer †Jacksboro
Executive DirectorBrian K. Guthrie
1000 Red River Street
Austin, Texas 78701-2698
www.trs.texas.gov
512.542.6400
800.223.8778
† Trustee appointed to Retiree Position. Deceased January 2017.