TRS – PROVIDING FOR YOUR FUTURE Gwinnett Retiree Luncheon Gwinnett Center Duluth, Georgia Stephen J. Boyers Chief Financial Officer November 8, 2012

Economy Improving On September 30, 2012, assets were $55.4 billion ($53.5 billion on June 30, 2012) ($54.1 billion on June 30, 2011) Assets were $55.14 billion on October 31, 2007 (High point before the Great Recession) During this 58 month period, TRS paid out $14 billion in retirement benefits Investment returns: 4.7% - 3 months ending Sept. 30, 2012 2.2% - Fiscal Year 2012 21.3% - Fiscal Year 2011 8.3% - Last 25 years

Asset Allocation – September 30, 2012 Equities ...... 70% or $38.9 billion 80% is internally managed ($31.0 Bil) 20% is externally managed ($7.9 Bil) Fixed …… 28% or $15.6 billion Other …… 2% or $900 million

STATS: Membership – November 1, 2012 Active Contributing Members .... 219,073 Retirees …. 98,659 Total .... 317,732

STATS: Benefits Paid Benefits Paid in FY2012 ...... $3.3 Billion Avg. Benefit as of November 1, 2012 ...... $ 3,038 per month $36,456 per year Avg. Benefit for New Service Retirees in FY2013 (w/ 25 + years of service)... $ 3,599 per month $43,188 per year

FUNDING: Liabilities Obligations that TRS currently owes its retired and active members based on current plan provisions. Present Value of Future Benefits Payable to Retired Members ...... $37.3 Billion Present Value of Future Benefits Payable to Active Members ...... $38.8 Billion Total Liabilities ...... $76.1 Billion Based on actuarial valuation dated June 30, 2011

FUNDING: Assets Funds currently available and funds anticipated to be collected to pay for the obligations. Actuarial Value of Assets ...... $55.4 Billion Present Value of Future Member & Employer Contributions ...... $10.1 Billion Total Assets ...... $65.5 Billion Based on actuarial valuation dated June 30, 2011

FUNDING: Liabilities vs. Assets Funding status of TRS. Total Liabilities ...... $76.1 Billion Total Assets ...... $65.5 Billion Difference is the Actuarial Accrued Liability .... $10.6 Billion (Excess of Liabilities Over Assets) Funded Ratio ...... 84.0% Based on actuarial valuation dated June 30, 2011

FUNDING: Source of Funds Over the Past 30 Years, total funding came from the following sources: Contributions: Employee .................................. 12% Employer: State ........................................ 14% Local …………………………... 10% Total ……………………………. 24% Investment Earnings ...................... 64%

U.S. Postal Service USPS took up to a week to deliver the 3,501 paper checks. (01/01/2012 payroll) Publicized cutbacks in USPS operations have and will continue to delay the delivery of mail. USPS states that local delivery of 1st class mail could take 2-3 days. USPS does not guarantee the timeliness of 1st class mail and delivery within Georgia could take 5-7 days. Approx. 750 of these retirees have switched to EFT. We need your help to reach out to the remaining 2,803 retirees receiving paper checks.

Income Tax Offset TRS is committed to maintaining a secure, stable and sustainable retirement system for all members – past, present and future. In 1989, U.S. Supreme Court ruled states had to tax federal and state retirement benefits the same. In 1990, Legislature gave TRS the authority to grant an adjustment on the first $37,500 in benefits at the time of retirement to offset state income tax. Board began granting a discretionary 3% increase on the first $37,500 in benefits to all retirees.

Income Tax Offset (cont.) Today, TRS retirees can exclude the first $35,000 of retirement income from their state taxable income beginning at age 62 ($65,000 at age 65) This is in addition to the discretionary 3% adjustment all TRS retirees receive at the time of retirement. Basically, TRS retirees are receiving a “double” benefit as it relates to state income taxes. In March 2012, the TRS Board voted to discontinue granting the tax offset adjustment for all members retiring on or after January 1, 2013.

TRS Resources TRS Website – www.trsga.com TRS Call Center General Information Legislative Updates News Updates Personal Account Information Payment history 1099 copies Address changes Withholding taxes changes EFT changes TRS Call Center 404-352-6500 or 800-352-0650

What To Keep Up With Retirement Issues? National Institute on Retirement Security www.nirsonline.org National Council on Teachers Retirement www.nctr.org National Association of State Retirement Administrators www.nasra.org Center for Retirement Research at Boston College www.crr.bc.edu

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