General Government
A Review of Selected Controls at the Employees Retirement System
March 2002
Report Number 02-032
Overall Conclusion
The controls and processes at the Employees Retirement System (System) reasonably ensure that it will accomplish its mission, which is to provide retirement and health care benefits for state employees. However, the System needs to address issues related to its administration of the Uniform Group Insurance Program.
Key Facts and Findings
- The System does not ensure that health benefit claims are eligible before
paying them, even though it has the capability to verify claims electronically.
- The System's contract monitoring program is in development. Also, the System
did not enforce certain contract provisions that could have allowed it to
collect a $270,000 performance penalty.
- The System has not been funded to maintain the 60-day contingency reserve
mandated by the Texas Insurance Code.
- If adverse market conditions or actuarial losses cause the Plan's assets
to fall below liabilities, the Legislature would not be able to increase future
retirement benefits without also increasing state and/or employee retirement
contribution rates.
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