​​The TRS Board of Trustees received a briefing on the annual actuarial valuation of the pension fund — the analysis of the retirement fund’s health as of Aug. 31, 2017. The valuation showed mostly positive news, including a 12.9 percent return on investments for the fiscal year, which was well above the assumed 8 percent. The TRS fund now holds more than $146 billion in overall assets, up from $134 billion in 2016.

The healthy investment returns were a major factor in the fund’s improved picture, which included a higher funded ratio (restoring the fund to just above 80 percent funded, a key indicator of pension fund health) and a lower amortization period (32 years, just barely above the statutory 31-year benchmark). Note: Think of the amortization period as you would a mortgage — the period represents the time that would be necessary to pay obligations (member benefits) given projected income (contributions and investment income). State law prohibits any benefit increase for retirees that would take the funding period above 31 years, so the lower that figure gets, the better.

However, the actuarial firm cautioned the TRS Board on some fronts, including:

  • TRS has become an outlier among peer pension funds with its assumed 8 percent investment rate. Most funds have lowered their assumptions to around 7.5 percent. The board is likely to reduce TRS’s assumed rate at its February meeting, which will negatively affect the funding period and other key indicators.
  • The state continues to underfund the pension plan, which means that liabilities will continue to outgrow assets over the next several years unless contributions are increased or benefits are decreased.

Other action

In other TRS news, the board welcomed two members who were re-appointed after an absence — Jarvis Hollingsworth (chair) and Nanette Sissney — as well as newly-appointed retiree representative Dick Nance. Departing members David Kelly and Karen Charleston were recognized.

TCTA members Sissney and Dolores Ramirez represent employees on the TRS Board, and will serve on the following committees:

  • Ramirez: Ethics Committee (chair), Benefits Committee, Budget Committee, and Investment Management Committee. She is also the Vice-Chair of the TRS Board.
  • Sissney: Benefits Committee (chair), Audit Committee, Budget Committee, and Policy Committee.

Both women were appointed to the Resolutions Committee of the National Council on Teacher Retirement, and Ramirez will serve as chair of that committee.​