aug 27 final collin county retirement plan briefing

8/9/2019 Aug 27 FINAL Collin County Retirement Plan Briefing

1/12

Collin County RetirementPlan Briefing

Revised August 27, 2010


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


3/12

3

Benefits Are FundedPrimarily by Investment Earnings

76%InvestmentEarnings

11%EmployeeDeposits

13%EmployerDepositsTCDRS

Asset Growth

(1967 through 2009)

3


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


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


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


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


8/12

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


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


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


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


12/12

aug 27 final collin county retirement plan briefing

Documents