Teacher Retirement System of Texas
An Audit of the Financial Statements of the Teacher Retirement System of Texas Year Ended August 31, 1996
Report Number 97-057
April 1997
Overall Conclusion
The Teacher Retirement System's (System) general purpose financial statements for fiscal year 1996 are accurately presented in all material respects, in accordance with generally accepted accounting principles. We noted no material internal control weaknesses or noncompliance with laws and regulations. The actuarial valuation of the pension fund, a current reportable weakness in the System's internal control structure, and an update of progress on prior year comments are summarized below.
Key Facts and Findings
At August 31, 1996, the System had assets of $50.1 billion to fund pension and other benefits for 658,166 members and 142,631 annuitants. Actuarial accrued liabilities for pensions were 96.3 percent funded from the assets of the System. The unfunded remainder, $1.8 billion, was projected to be amortized over a period of 11.3 years. The System paid $2.1 billion in retirement benefits during the year, a 22 percent increase over the prior year.
Control procedures used to ensure the accuracy of membership data submitted to the System's external actuary should be strengthened. The actuary uses membership data in its annual actuarial valuation, which helps to judge the actuarial soundness of the pension plan.
The System has resolved three of the four prior year comments. The System is aware of weaknesses related to the proper anticipation of international dividends and is continuing efforts to implement a new investment accounting system it believes will strengthen anticipation controls.
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