Collin County Retirement

Plan Briefing
September 7, 2010
How Your Plan Works
 Five Simple Steps

A percentage of your employee’s paycheck is deposited into his or her TCDRS

account.

Your employee’s savings grow at an annual, compounded rate of 7% regardless

of market ups or downs.

You are also saving for your employee’s retirement. Your employer
contributions become matching dollars for employees that retire. Your rate is
determined annually based on your projected assets and estimated benefits
promised.

At retirement, you match the employee’s final account balance, including

interest, $2.50 for every dollar saved. We calculate a monthly retirement
payment based on that account balance and matching.

Your retiring employee receives a monthly benefit payment for life.

Benefits Are Funded
Primarily by Investment Earnings

76%
Investment
Earnings

11% 13%
Employer
Employee Deposits
TCDRS Deposits
Asset Growth
(1967 through 2009)
4
Investment Results
As Of December 31, 2009
 Collin County Retiree Profile
as of Dec. 31, 2009

Average Average Average

Average Average Current Annual Replacement
Age at Service at Annual Benefit at Ratio at
Retirement Retirement 1 Benefit 2 Retirement Retirement 3
62 18 $22,000 $18,000 39%

All averages reflect plan provisions in effect at the time of each retirement. The averages
are based on data that is currently available.

1
Includes service with other TCDRS employers and proportionate service
2
Includes cost-of-living adjustments adopted by Collin County
3
Based on the average annual benefit at retirement and final salary as available
Projection of Collin County Retirees
250% 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 23,323
2012 432 26,316 23,735
2013 479 27,625 24,073
2014 523 28,952 24,376
2015 567 30,153 24,529
2016 612 31,215 24,535
2017 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 25,198
2023 890 40,973 25,312
2024 920 42,744 25,513
2025 949 44,541 25,687
* Each year’s number of retirees reflects estimated number of new retirees and deaths. It is
estimated that only between 25% and 30% of all Collin County employees will eventually
receive a monthly benefit in retirement.
** 3.5% annual inflation
Projection of Collin County Retirees
200% Match Beginning in 2011
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 23,304
2012 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 24,235
2017 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
* Each year’s number of retirees reflects estimated number of new retirees and deaths. It is
estimated that only between 25% and 30% of all Collin County employees will eventually
receive a monthly benefit in retirement.
** 3.5% annual inflation
% of Final Salary Replaced by Collin County
Retirement Benefit at Age 65 for a New Hire

18 Yrs of Service
Average Collin County Retiree
110%
100% Final Salary
90%
80%
70%
60% 250% Employer Matching Rate
50% 200% Employer Matching Rate
150% Employer Matching Rate
40%
30%
20%
10%
0%
10 Years 15 Years 20 Years 25 Years

Above based on an employee deposit rate of 7% and annual salary increases using the graded valuation salary
scale.
Projection of Collin County Required Rate
Under Current and Proposed Plans

118%
8%

116%
6%

114%
4%

112%
2%

110%
0%

8%
8%

6%
6%

Current Plan with

Current Plan 2
w50% Match,
ith 250% a 13.50%
Employer Elected
Match and Rate
No and No Lum
Lump-Sum p-SumContribution
Contribution
4%
4%
Current Plan with 250%Match, a 13.50%Elected Rate and a $5,000,000 Lump-SumContribution in 2010
Current Plan w ith 250% Employer Match and a $5,000,000 Lump-Sum Contribution in 2010
Match Decrease to 200%with No Elected Rate and No Lump-SumContribution
2%
2% Employer Match
Match Decrease to 20Decrease
0%with ato13200%
.50%and a $5,000,000
Elected Lump-Sum
Rate and a Contribution
$5,000,000 Lump-Sum inC2010
ontribution in 2010
Elected
13.50% Rate
Elected Rate
0%
0%
2010
2010 2012
2012 2014
2014 2016
2016 2018
2018 22020
020 22022
022 22024
024 2026
2026 2028
2028 2030
2030 2032
2032 2034
2034
Year
Year

These are projections and actual results will vary. 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. The required rate increases for the first nine years as the investment losses from 2008
are recognized. The required rate drops after 20 years reflecting the UAAL being amortized over a closed 20-year
period.
Projection of Collin County Funded Ratio
Under Current and Proposed Plans

140%
140%

120%
120%

100%
100%

80%
80%

60%
60%

40%
40% Current Plan with 250%Match, a 13.50%Elected Rate and No Lump-SumContribution
Current Pla
Current n with
Plan 25250%
w ith 0%Ma tch, a 13.5
Employer 0%E
Match lecte
and dR
No ate and a $
Lump-Sum 5,000,000 Lump-SumContribution in 2010
Contribution
20%
Match Decrease to 200%with No Elected Rate and No Lump-SumContribution
20% Current Plan w ith 250% Employer Match and a $5,000,000 Lump-Sum Contribution in 2010
Match Decrease to 200%with a 13.50%Elected Rate and a $5,000,000 Lump-SumContribution in 2010
Employer Match Decrease to 200% and a $5,000,000 Lump-Sum Contribution in 2010
0%
0% 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
2009 2011 2013 2015 2017 2019 2021
Year 2023 2025 2027 2029 2031 2033

Year

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.
 Projection of Current Collin County Plan Funded Ratio and
Unfunded Liability Amortized Over 20-Year Closed Period

1,200 120%

1,000 100%

2031

Funded Percentage
800 Funded 99% 80%
LIab 952
Assets 947
Unfunded 5
Millions

600 60%
2023
Funded 91%
Liab 641
400 Asset 581 40%
2017 Unfunded 60
Funded 83%
Liab 453
2009 Actuarial Accrued Liability
200 Assets 376 20%
Funded 85%
Unfunded 77 Actuarial Value of Assets
LIab 260
Assets 220 Funded Ratio
Unfunded 40
0 0%
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

Year

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 actuarial
valuation, including a long-term investment return assumption of 8% per year. This projection assumes the current plan with
250% matching.
 TCDRS Plan Design

We have a unique structure that combines the best features of

defined benefit plans and defined contribution plans.

Defined Defined
Benefit TCDRS Contribution
Plans Plans
Example: traditional An employee-savings Example: 401(k)
pension plan based plan
Benefit based on
Benefit based on Benefit is based on employee’s savings and
employee’s final salary employee’s final account employer matching, if
and length of career balance, plus employer provided
matching
Benefit varies according
Monthly benefit lasts for
Employee must retire to to market performance
lifetime
earn employer matching
Benefit may not last a
Employer assumes Interest rate fixed at 7% lifetime
investment risk
Monthly benefit lasts for Employee assumes
lifetime investment risk
Employer assumes
investment risk 13
Questions?