Teacher Retirement System
An Audit of the Financial Statements of the Teacher Retirement System of Texas for the Fiscal Year Ended August 31, 1998
December 1998
Report Number 99-018
Overall Conclusion
The Teacher Retirement System of Texas' (System) fiscal year 1998 financial statements covered by our audit opinion dated November 18, 1998, are materially correct in accordance with generally accepted accounting principles. In addition, during fiscal year 1998 and as of August 31, 1998:
- Pension trust fund net assets increased by $4.3 billion to $66.5 billion.
- The System's pension plan became fully funded. The plan's actuarial assets exceed its actuarial liabilities by $2.46 billion. As a result, the plan presently has enough assets to pay benefits to retirees and to current active members when they retire.
- Expenditures of the group insurance plans for active and retired participants exceeded revenues by $32 million. The ending fund balance for the combined plans was $194 million. System management estimates the retiree insurance plan has sufficient funding to continue operating through fiscal year 2000. Continuation of the retiree insurance plan will require legislative action to address long-term funding needs.
Key Facts and Findings
Portfolio and Accounting Management for Securities System (PAM)
The System achieved an important goal in fiscal year 1998 by implementing Portfolio and Accounting Management for Securities System (PAM), a new investment accounting software package. PAM tracks approximately $65 billion in investments.
Internal Controls and Compliance
We reported no weaknesses in the System's internal controls or noncompliance with laws and regulations that would significantly affect the financial statements.
The System resolved two previous audit recommendations.
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