Texas Local Fire Fighters Retirement Act (TLFFRA) Pension Report

Transcription

1 Texas Local Fire Fighters Retirement Act (TLFFRA) Pension Report February 2018 Texas Pension Review Board

2 Texas Pension Review Board Joshua B. McGee, Chair Keith Brainard, Vice Chair Andrew W. Cable Stephanie V. Leibe J. Robert Massengale Robert M. May Ernest Richards, Esq. Anumeha Kumar, Executive Director Michelle Downie Kranes, Deputy Director

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4 Table of Contents Introduction... 1 About the Pension Review Board... 1 Texas Local Fire Fighters Retirement Act... 2 PRB Duties for TLFFRA Systems... 3 PRB Pension Funding Guidelines... 4 Executive Summary... 5 Financial... 6 Market Value of Assets for All Paid Systems... 7 Market Value of Assets Breakdown by Plan... 8 Plans Grouped by Asset Value (MVA) GASB Disclosure Information DROP Balance as a Percent of Assets Net Investment Rates of Return (by Plan) Asset Allocation Chart (2006 vs. 2016) Actuarial Actuarial Assumptions and Methods Actuarial Valuation Summary as of Valuation Date Actuarial Charts: Comparative Data Plans Grouped by Amortization Period Ranges Plans Grouped by Asset Value (AVA) Amortization Periods by Plan Actuarial Funded Ratio by Plan Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan Membership Plan Contributions Aggregate AVA to AAL Comparison... 38

5 Table of Contents (continued) Benefits Benefit Summary DROP Features Directory Plan Contact Information Plan Contractor Information Glossary... 75

6 About the Texas Pension Review Board The Texas Pension Review Board (PRB) was established in 1979 as the State s oversight body for Texas public retirement systems at the state and local level. The PRB s service population consists of the members, trustees, and administrators of 336 public retirement plans; state and local government officials; and the general public. The PRB monitors the financial and actuarial soundness of 94 actuarially funded defined benefit public retirement systems in Texas, as well as their compliance with state law. The agency also oversees 242 defined contribution and pay-as-you-go volunteer firefighter systems across the state. However, these retirement systems are only required to register with the PRB and submit plan description information. Board Composition The Board is composed of seven governor-appointed members, including three persons who have experience in the fields of securities investment, pension administration, or pension law and are not members or retirees of a public retirement system; one active public retirement system member; one retired member of a public retirement system; one person who has experience in the field of governmental finance; and one member who is an actuary. Primary Duties The agency s general duties as stated in of the Texas Government Code are: (1) conduct a continuing review of public retirement systems, compile and compare information about benefits, creditable service, financing, and the administration of systems; (2) conduct intensive studies of potential or existing problems that threaten the actuarial soundness of or inhibit an equitable distribution of benefits in one or more public retirement systems; (3) provide information and technical assistance on pension planning to public retirement systems on request; and (4) recommend policies, practices, and legislation to public retirement systems and appropriate governmental entities. Additionally, the PRB is charged with developing and administering an educational training program for trustees and system administrators of Texas public retirement systems. 1

7 Texas Local Fire Fighters Retirement Act (TLFFRA) The Texas Local Fire Fighters Retirement Act (TLFFRA) was originally created in 1937 by the 45th Legislature and named the Firemen s Relief and Retirement Fund. In 1989, the Act was restated under Article 6243e and renamed as the Texas Local Fire Fighters Retirement Act. The Act allows for paid and part-paid fire departments and volunteer fire departments in participating cities to administer their own local retirement systems. The Act provides general guidelines for fund management, including some investment restrictions, but leaves administration, plan design, contributions, and specific investments to each system s local board. Systems operating under TLFFRA are entirely locally-funded. Local retirement systems established under TLFFRA have authority to determine member contribution rates, benefit levels, and other plan provisions locally through procedures outlined in TLFFRA, however, the composition of TLFFRA boards of trustees is set in statute. Sponsoring municipalities of TLFFRA systems must meet a statutory minimum contribution rate, but may adopt by ordinance a higher contribution rate than set in statute. Currently, there are 42 retirement systems organized under TLFFRA. Volunteer TLFFRA Systems Volunteer members are eligible for full retirement at the age of 55 with 20 years of service and receive a benefit of $25 per month for the remainder of their life. Survivor, death, and disability benefits are also included under the TLFFRA statute. The volunteer benefit is funded through both employer and employee contributions. A majority of the volunteer TLFFRA pension systems do not have a trust fund balance; therefore, are considered pay-as-you-go-systems. The employer contribution is the total amount of benefits paid to retirees and beneficiaries in a calendar year. The volunteer firefighters contribute a very small amount each year (some volunteer TLFFRA systems require their members to pay an annual contribution of five dollars). The employer may at any time make the member contributions. There are currently 81 volunteer TLFFRA plans registered with the PRB. 2

8 PRB Duties for TLFFRA Systems TLFFRA Training The PRB is required to provide technical assistance, training, and information to members of the boards of trustees for TLFFRA plans. The agency works with the TLFFRA systems to present at their trustee training and annual conferences. The PRB has also developed online training, and the online training portal can be found here or on the PRB website. TLFFRA Appeals to SOAH The PRB is also designated as the facilitator of appeals from plan members to the State Office of Administrative Hearings (SOAH). The PRB created a procedure for the referral of TLFFRA appeals to SOAH and posted the TLFFRA Notice of Appeal Form on the PRB website for the convenience of TLFFRA systems and their members. To date, the PRB has referred four TLFFRA appeals to SOAH. TLFFRA Specialist Joey Evans is the designated PRB TLFFRA specialist who provides assistance and training to TLFFRA plans. Joey can be contacted at joey.evans@prb.state.tx.us. 3

9 PRB Pension Funding Guidelines To lend transparency to retirement systems actuarial processes and to establish minimum funding standards necessary to meet long-term obligations, the PRB created the Guidelines for Actuarial Soundness in Since the original adoption of the Guidelines, the PRB has reviewed and updated them as necessary, with the last revisions adopted on January 26, Among the updates, the title of the Guidelines was changed to PRB Pension Funding Guidelines. The updated Guidelines were made effective June 30, The purpose of the Pension Review Board's Pension Funding Guidelines is to provide guidance to public retirement systems and their sponsoring governmental entities in meeting their long-term pension obligations. The Guidelines are intended to foster communication between plans and their sponsors as they determine a reasonable approach to responsible funding, whether the contribution rate is fixed or actuarially determined. Public retirement systems should develop a funding policy, the primary objective of which is to fund the obligations over a time frame that ensures benefit security while balancing the additional, and sometimes competing, goals of intergenerational equity and a stable contribution rate. 1. The funding of a pension plan should reflect all plan obligations and assets. 2. The allocation of the normal cost portion of the contributions should be level or declining as a percentage of payroll over all generations of taxpayers, and should be calculated under applicable actuarial standards. 3. Funding of the unfunded actuarial accrued liability should be level or declining as a percentage of payroll over the amortization period. 4. Actual contributions made to the plan should be sufficient to cover the normal cost and to amortize the unfunded actuarial accrued liability over as brief a period as possible, but not to exceed 30 years, with years being a more preferable target range.* For plans that use multiple amortization layers, the weighted average of all amortization periods should not exceed 30 years.* Benefit increases should not be adopted if all plan changes being considered cause a material increase in the amortization period and if the resulting amortization period exceeds 25 years. 5. The choice of assumptions should be reasonable, and should comply with applicable actuarial standards. 6. Retirement systems should monitor, review, and report the impact of actual plan experience on actuarial assumptions at least once every five years. *Plans with amortization periods that exceed 30 years as of 6/30/2017 should seek to reduce their amortization period to 30 years or less as soon as practicable, but not later than 6/30/

10 Executive Summary This report provides general and comparative pension-related data for paid and part-paid retirement systems organized under the Texas Local Fire Fighters Retirement Act (TLFFRA). TLFFRA plans are statutorily required to report financial, actuarial, benefit, investment and contact information to the Pension Review Board (PRB). This report utilizes those reports to display the data in a comparative manner. This report includes several new charts and tables, and displays information on GASB disclosures, deferred retirement option plans (DROP), asset allocation, and contribution sufficiency. These additions are intended to give a more comprehensive amount of information on TLFFRA systems. Based on the information received by the PRB, the following trends can be observed: Increasing total net assets. The total combined revenue (contributions and investments) grew by about $55 million from the 2016 report, total disbursements (benefit payments/withdrawals and expenses) increased by about $28 million, and total net assets increased by $36 million (see page 7). Investment return fluctuations. One-year returns averaged 6.46%, an increase of 1.5% since the 2016 report, while 10-year returns decreased by 1.5% to 4.18%. Thirty-year/oldest available returns averaged 6.27%, a decrease of 0.6% (see pages 15-16). Changing asset allocation. Investments in fixed income fell from 28.46% in 2006 to 20.58%, and alternative investments grew from 0.86% to 7.87% (see page 17). Actuarial assumption changes. Since the publication of the 2016 PRB TLFFRA Report, the median payroll growth rate decreased from 4% to 3.75%, while the median investment rate of return remained at 7.75% (see pages 19-20). Amortization period increases. Since the 2016 report, amortization periods have generally remained stagnant or increased, with one plan moving from the group into the infinite group and three plans moving from the group into the group. One plan, The Woodlands Firefighters' Retirement System, was added into the group. This new plan registered with the PRB in 2015 and was not included in the previous report (see page 24). Increasing unfunded actuarial accrued liability (UAAL). The total actuarial value of assets (AVA) increased by $234 million while total actuarial accrued liability (AAL) increased by $306 million, resulting in an approximate UAAL increase of $72 million since the 2016 report (see page 38). 5

11 Financial 6

12 Market Value of Assets for All Paid and Part-Paid Systems As of Most Recent Annual Financial Report Revenue Employer Contributions $71,102, Member Contributions $54,578, Miscellaneous Contributions 1 $47, Investment Income $133,028, Miscellaneous Income 1 $1,342, Total Revenue $260,098, Disbursements Benefits Paid $156,191, Contributions Withdrawn 2 $4,203, Administrative Expenses $3,602, Investment Expenses 3 $7,890, Miscellaneous Expenses 4 $176, Total Disbursements $172,064, Gross Total Assets of All Systems $1,851,218, Total Liabilities of All Systems 5 $2,143, Net Total Assets of All Systems $1,849,074, Only a few systems have additional revenue, which has been noted here as miscellaneous contributions/income. 2 Contributions withdrawn include withdrawals and refunds of member contributions. 3 Not all systems disclose investment expenses; the total here reflects the total investment expenses reported. 4 Only a few systems have additional expenses, which has been noted here as miscellaneous expenses. 5 Includes financial liabilities, such as payables, securities lending obligation to return collateral, and debt for plans that use leverage. Total liabilites does not include the actuarial accrued liability. 7

13 Market Value of Assets Breakdown by Plan Plan (System) Fiscal Year End Combined Revenue Combined Disbursements Total (Gross) Assets Total Liabilities 1 Total Net Assets Abilene 9/30/2016 $8,746,081 $6,071,562 $55,026,645 $8,616 $55,018,029 Amarillo 12/31/2016 $20,273,522 $11,934,701 $153,647,883 $651,181 $152,996,702 Atlanta 12/31/2016 $461,119 $230,207 $3,744,867 $0 $3,744,867 Beaumont 12/31/2016 $13,863,994 $9,774,246 $102,439,795 $963 $102,438,832 Big Spring 12/31/2016 $1,490,897 $2,031,148 $10,387,399 $0 $10,387,399 Brownwood 12/31/2016 $706,051 $485,950 $3,622,455 $4,880 $3,617,575 Cleburne 12/31/2016 $3,118,250 $1,540,566 $21,323,149 $0 $21,323,149 Conroe 12/31/2016 $3,743,480 $1,561,776 $22,535,652 $6,603 $22,529,049 Corpus Christi 12/31/2016 $18,658,128 $14,770,300 $134,133,300 $231,669 $133,901,631 Corsicana 12/31/2016 $1,479,304 $1,256,605 $8,348,742 $4,425 $8,344,317 Denison 12/31/2016 $2,118,530 $1,611,898 $15,735,720 $14,352 $15,721,368 Denton 12/31/2016 $11,772,395 $4,444,362 $75,611,080 $306,330 $75,304,750 Galveston 12/31/2016 $4,649,313 $3,520,330 $40,157,900 $2,426 $40,155,474 Greenville 12/31/2016 $2,238,523 $1,987,981 $12,751,090 $22,927 $12,728,163 Harlingen 9/30/2016 $4,570,864 $2,729,198 $28,747,197 $114 $28,747,083 Irving 12/31/2016 $23,074,876 $10,556,456 $186,584,069 $28,062 $186,556,007 Killeen 9/30/2016 $6,416,077 $2,145,949 $35,366,140 $23,310 $35,342,830 Laredo 9/30/2016 $21,757,409 $9,890,596 $126,390,698 $85,494 $126,305,204 Longview 12/31/2016 $5,771,132 $6,527,293 $41,067,673 $11,135 $41,056,538 Lubbock 12/31/2016 $19,936,989 $16,756,354 $176,016,821 $0 $176,016,821 Lufkin 12/31/2016 $2,913,331 $2,300,579 $14,391,913 $56,116 $14,335,797 Marshall 12/31/2016 $1,501,212 $1,302,957 $7,712,228 $0 $7,712,228 McAllen 9/30/2016 $6,688,020 $4,229,929 $44,759,055 $0 $44,759,055 Midland 12/31/2016 $9,449,186 $7,726,623 $82,716,350 $51,402 $82,664,948 Odessa 12/31/2016 $7,516,037 $6,930,642 $44,332,397 $75,357 $44,257,040 Orange 12/31/2016 $1,069,573 $1,228,153 $8,175,242 $20,644 $8,154,598 Paris 12/31/2016 $1,094,884 $1,206,783 $4,764,272 $0 $4,764,272 Plainview 12/31/2016 $1,035,593 $904,548 $5,425,643 ($2,300) $5,427,943 Port Arthur 12/31/2016 $5,215,940 $4,550,208 $44,367,452 $231,786 $44,135,666 San Angelo 12/31/2016 $8,288,113 $6,354,243 $60,206,802 $0 $60,206,802 8

14 Market Value of Assets Breakdown by Plan Plan (System) Fiscal Year End Combined Revenue Combined Disbursements Total (Gross) Assets Total Liabilities 1 Total Net Assets San Benito 9/30/2016 $118,703 $356,437 $2,987,515 $0 $2,987,515 Sweetwater 12/31/2016 $1,115,711 $869,568 $7,905,024 $78,145 $7,826,879 Temple 9/30/2016 $5,974,684 $3,499,899 $39,862,402 $0 $39,862,402 Texarkana 12/31/2016 $3,607,300 $2,849,649 $31,821,138 $43,958 $31,777,180 Texas City 12/31/2016 $2,428,997 $2,552,474 $14,517,750 $105,166 $14,412,584 The Woodlands 12/31/2016 $4,194,883 $190,190 $26,221,426 $32,622 $26,188,804 Travis County ESD #6 12/31/2016 $2,919,802 $136,453 $15,043,500 $0 $15,043,500 Tyler 12/31/2016 $9,069,479 $6,482,689 $62,536,196 $0 $62,536,196 University Park 12/31/2016 $1,760,340 $1,379,512 $9,466,803 $18,432 $9,448,371 Waxahachie 9/30/2016 $2,176,548 $1,555,590 $14,201,159 $0 $14,201,159 Weslaco 9/30/2016 $1,674,233 $743,294 $9,186,148 $0 $9,186,148 Wichita Falls 12/31/2016 $5,439,418 $4,886,291 $46,979,635 $29,593 $46,950,042 1 Includes financial liabilities, such as payables, securities lending obligation to return collateral, and debt for plans that use leverage. Total liabilites does not include the actuarial accrued liability. 9

15 Plans Grouped by Asset Value As of Most Recent Annual Financial Report Number of Plans 5 6 Less than $10 $10 - $25 $25 - $50 $50 - $100 Greater than $100 Market Value of Assets (in millions) 10

16 GASB Disclosure Information Plan (System) Fiscal Year End Total Pension Liability Fiduciary Net Position Net Pension Liability FNP as a Percentage of TPL Preliminary Discount Rate TPL Discount Rate NPL at Discount Rate -1% NPL at Discount Rate +1% (TPL) (FNP) (NPL) (% Funded) ( a ) ( b ) ( a ) - ( b ) ( b ) / ( a ) Abilene 9/30/ ,288,742 55,018,029 $49,270, % 8.00% 8.00% 60,138,904 40,020,783 Amarillo 12/31/ ,041, ,996,702 $37,044, % 8.00% 8.00% 59,343,586 18,297,796 Atlanta 12/31/2016 4,874,042 3,744,867 $1,129, % 7.50% 7.50% 1,732, ,895 Beaumont 12/31/ ,155, ,438,832 $91,716, % 8.00% 5.94% 109,729,736 76,198,702 Big Spring 12/31/ ,112,377 10,399,250 $9,713, % 8.00% 8.00% 12,089,526 7,729,068 Brownwood 12/31/2016 8,673,904 3,617,576 $5,056, % 7.40% 7.40% 6,141,156 4,148,721 Cleburne 12/31/ ,686,376 21,323,149 $12,363, % 7.50% 7.50% 15,895,910 9,364,369 Conroe 12/31/ ,731,311 22,529,049 $19,202, % 7.75% 7.75% 25,043,654 14,393,651 Corpus Christi 12/31/ ,572, ,901,631 $91,671, % 7.90% 7.90% 115,086,686 71,686,946 Corsicana 12/31/ ,181,665 8,344,317 $8,837, % 7.50% 7.50% 10,978,703 7,049,906 Denison 12/31/ ,769,788 15,721,368 $7,048, % 7.75% 7.75% 9,572,167 4,833,912 Denton 12/31/ ,898,178 75,304,750 $19,593, % 6.75% 6.75% 31,679,502 9,414,393 Galveston 12/31/ ,334,404 40,155,474 $25,178, % 8.00% 8.00% 32,777,321 18,834,959 Greenville 12/31/ ,437,710 12,728,162 $16,709, % 8.25% 8.25% 19,583,397 14,132,772 Harlingen 9/30/ ,750,313 28,747,083 $38,003, % 8.00% 5.25% 48,465,882 29,640,438 Irving 12/31/ ,248, ,556,007 $76,692, % 8.25% 8.25% 95,110,757 60,845,054 11

17 GASB Disclosure Information Plan (System) Fiscal Year End Total Pension Liability Fiduciary Net Position Net Pension Liability FNP as a Percentage of TPL Preliminary Discount Rate TPL Discount Rate NPL at Discount Rate -1% NPL at Discount Rate +1% (TPL) (FNP) (NPL) (% Funded) ( a ) ( b ) ( a ) - ( b ) ( b ) / ( a ) Killeen 9/30/ ,453,533 35,342,830 $21,110, % 7.75% 7.75% 29,208,185 14,405,469 Laredo 9/30/ ,905, ,305,204 $93,600, % 8.00% 8.00% 121,601,258 70,213,822 Longview 12/31/ ,737,789 41,056,538 $55,681, % 8.00% 7.13% 67,578,809 45,725,085 Lubbock 12/31/ ,732, ,016,821 $90,715, % 7.75% 7.75% 109,545,238 58,337,527 Lufkin 12/31/ ,780,671 14,335,797 $20,444, % 7.50% 7.50% 24,465,520 17,074,627 Marshall 12/31/ ,669,078 7,712,228 $10,956, % 7.75% 7.75% 13,276,680 9,033,455 McAllen 9/30/ ,587,208 44,759,055 $27,828, % 7.50% 7.50% 36,722,681 20,387,242 Midland 12/31/ ,416,713 82,664,948 $57,751, % 8.00% 8.00% 73,087,109 44,895,102 Odessa 12/31/ ,186,193 44,257,038 $98,929, % 7.75% 5.05% 118,908,777 82,646,589 Orange 12/31/ ,101,284 8,154,599 $8,946, % 7.75% 7.66% 10,775,680 7,502,142 Paris 12/31/ ,406,838 4,764,272 $9,642, % 8.00% 8.00% 11,080,436 8,310,490 Plainview 12/31/ ,174,783 5,427,943 $10,746, % 7.75% 7.75% 12,583,859 9,221,507 Port Arthur 12/31/ ,462,131 44,135,662 $15,326, % 8.00% 8.00% 21,279,026 10,178,729 San Angelo 12/31/ ,449,191 60,206,802 $41,242, % 7.90% 7.90% 53,980,253 30,746,999 San Benito 12/31/2015 5,455,731 3,301,643 $2,154, % 7.50% 7.50% 2,910,378 1,528,605 Sweetwater 12/31/ ,792,573 7,826,879 $4,965, % 8.00% 8.00% 6,520,745 3,665,822 12

18 GASB Disclosure Information Plan (System) Fiscal Year End Total Pension Liability Fiduciary Net Position Net Pension Liability FNP as a Percentage of TPL Preliminary Discount Rate TPL Discount Rate NPL at Discount Rate -1% NPL at Discount Rate +1% (TPL) (FNP) (NPL) (% Funded) ( a ) ( b ) ( a ) - ( b ) ( b ) / ( a ) Temple 9/30/ ,277,136 39,862,402 $16,414, % 7.75% 7.75% 22,886,713 10,967,945 Texarkana 12/31/ ,052,755 31,777,180 $7,275, % 7.75% 7.75% 11,434,921 3,741,940 Texas City 12/31/ ,474,576 14,412,584 $17,061, % 7.75% 7.75% 20,658,199 14,074,879 The Woodlands 12/31/ ,446,391 26,188,804 $257, % 7.00% 7.00% 4,785,296-3,497,720 Travis County ESD #6 12/31/ ,975,426 15,043,500 $4,931, % 7.00% 7.00% 9,102,715 1,919,569 Tyler 12/31/ ,955,467 62,536,196 $25,419, % 7.65% 7.65% 34,862,765 17,373,278 University Park 12/31/ ,648,330 9,448,371 $13,199, % 8.00% 8.00% 15,707,188 11,064,106 Waxahachie 9/30/ ,240,580 14,201,159 $7,039, % 7.00% 7.00% 9,868,238 4,703,471 Weslaco 9/30/ ,775,101 9,186,148 $4,588, % 7.25% 7.25% 6,730,390 2,847,151 Wichita Falls 12/31/ ,125,679 46,950,042 $46,175, % 8.00% 6.31% 58,920,769 35,583,069 13

19 DROP Balance as a Percent of Assets Plan (System) Fiscal Year End DROP Balance Fiduciary Net Position (FNP) DROP Balance as a Percent of FNP Beaumont 12/31/ ,627, ,438, % Cleburne 12/31/ ,127 21,323, % Conroe 12/31/ ,102 22,529, % Harlingen 9/30/ ,538 28,747, % Irving 12/31/ ,284, ,556, % Longview 12/31/ ,224 41,056, % Lufkin 12/31/ ,416 14,335, % Marshall 12/31/ ,546 7,712, % Midland 12/31/ ,098 82,664, % Odessa 12/31/2016 4,330,981 44,257, % 14

20 Net Investment Rates of Return (by Plan) Plan (System) Effective Date 1-Year 3-Year 10-Year 30 Year/Oldest Available% 30 Year/Oldest Available Date Assumed Rate of Return Abilene 9/30/ % 3.68% 4.96% 6.27% 10/1/ % Amarillo 12/31/ % 4.48% 6.80% 8.50% 1/1/ % Atlanta 12/31/ % 5.52% 4.84% 5.87% 1/1/ % Beaumont 12/31/ % 2.77% 3.77% 6.46% 1/1/ % Big Spring 12/31/ % 2.91% 4.26% 7.77% 1/1/ % Brownwood 12/31/ % 0.54% 3.52% 5.13% 1/1/ % Cleburne 1 12/31/ % 4.11% N/A 5.64% 6/4/ % Conroe 2 12/31/ % 3.99% 2.84% N/A N/A 7.75% Corpus Christi 12/31/ % 3.65% 5.53% 7.55% 1/1/ % Corsicana 12/31/ % 0.26% 3.40% 4.08% 1/1/ % Denison 12/31/ % 2.95% 3.87% 6.37% 1/1/ % Denton 12/31/ % 3.94% 6.52% 7.73% 1/1/ % Galveston 12/31/ % 2.07% 3.74% 6.46% 1/1/ % Greenville 12/31/ % 3.05% 4.23% 6.57% 1/1/ % Harlingen 9/30/ % 5.07% 5.46% 8.58% 4/1/ % Irving 12/31/ % 3.05% 5.28% 6.14% 1/1/ % Killeen 9/30/ % 3.42% 4.01% 5.37% 10/1/ % Laredo 9/30/ % 3.62% 4.33% 4.77% 9/30/ % Longview 12/31/ % -0.01% 3.23% 6.18% 1/1/ % Lubbock 12/31/ % 0.81% 4.39% 7.55% 1/1/ % Lufkin 12/31/ % 3.08% 3.30% 4.82% 1/1/ % Marshall 12/31/ % 3.30% 4.67% 5.10% 10/1/ % McAllen 9/30/ % 2.71% 4.31% 6.90% 10/1/ % Midland 12/31/ % 1.84% 3.88% 7.84% 1/1/ % Odessa 12/31/ % 3.09% 2.58% 7.34% 1/1/ % Orange 12/31/ % 1.54% 3.72% 6.25% 1/1/ % Paris 12/31/ % 2.32% 2.16% 5.36% 1/1/ % Plainview 12/31/ % 0.47% 1.95% 4.69% 1/1/ % Port Arthur 12/31/ % 4.40% 5.15% 7.09% 1/1/ % San Angelo 12/31/ % 8.03% 6.34% 7.48% 12/31/ % San Benito 12/31/ % -1.43% 0.94% 2.15% 1/1/ % 15

21 Net Investment Rates of Return (by Plan) Plan (System) Effective Date 1-Year 3-Year 10-Year 30 Year/Oldest Available% 30 Year/Oldest Available Date Assumed Rate of Return Sweetwater 12/31/ % 2.71% 4.38% 7.89% 1/1/ % Temple 9/30/ % 3.95% 5.00% 6.14% 12/31/ % Texarkana 12/31/ % 2.67% 5.27% 7.76% 1/1/ % Texas City 12/31/ % 0.74% 3.56% 5.06% 1/1/ % The Woodlands 3 12/31/ % N/A N/A N/A 1/1/ % Travis County ESD #6 4 12/31/ % 3.94% N/A 6.50% 1/1/ % Tyler 12/31/ % 2.45% 4.77% 7.14% 1/1/ % University Park 12/31/ % 2.82% 3.29% 4.51% 1/1/ % Waxahachie 9/30/ % 3.38% 4.90% 5.45% 10/1/ % Weslaco 9/30/ % 5.06% 2.71% 4.91% 10/1/ % Wichita Falls 12/31/ % 4.38% 5.18% 7.23% 1/1/ % Median: 6.75% 3.05% 4.26% 6.32% 1/1/ % Average: 6.46% 2.96% 4.18% 6.27% 7/14/ % 1 Due to a recent change in portfolio managers, a 10-year return was not available from this plan. 2 The plan did not provide the PRB with a 30 year/oldest available rate of return in its latest PRB-1000 report. 3 The plan was less than three years old as of the end of FY 2016, thus it does not have annualized rolling rate of return data. 4 The plan was less than ten years old as of the end of FY 2016, thus it does not have 10-Year annualized rolling rate of return data. 16

22 Asset Allocation for TLFFRA Systems 2006 vs (% of Total Assets) *While mutual funds are not an asset class, the PRB did not receive sufficient information from certain retirement systems to identify the asset classes for investments reported as mutual funds. 17

23 Actuarial 18

24 Actuarial Assumptions and Methods Plan (System) AV Effective Date Actuarial Cost Method Asset Valuation Method Investment Rate of Return Inflation Payroll Growth Rate Abilene 10/1/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% Amarillo 12/31/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% Atlanta 12/31/2016 Entry Age Normal 5-Year Smoothing 7.40% 3.00% 3.00% Beaumont 12/31/2016 Entry Age Normal 5-Year Smoothing 8.00% 2.50% 3.50% Big Spring 1/1/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 5.00% Brownwood 12/31/2015 Entry Age Normal 5-Year Smoothing 7.40% 3.40% 3.40% Cleburne 12/31/2016 Entry Age Normal 5-Year Smoothing 7.25% 3.25% 3.25% Conroe 12/31/2015 Entry Age Normal 5-Year Smoothing 7.75% 2.50% 4.00% Corpus Christi 12/31/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.50% 3.50% Corsicana 12/31/2016 Entry Age Normal 5-Year Smoothing 7.00% 3.00% 3.00% Denison 12/31/2015 Entry Age Normal 5-Year Smoothing 7.75% 3.00% 4.00% Denton 12/31/2015 Entry Age Normal 5-Year Smoothing 6.75% 2.50% 3.00% Galveston 12/31/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.00% 3.00% Greenville 12/31/2016 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% Harlingen 12/31/2015 Entry Age Normal Market Value of Assets 8.00% 2.50% 3.50% Irving 12/31/2015 Entry Age Normal 5-Year Smoothing 8.25% 3.00% 4.25% Killeen 9/30/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.25% 3.25% Laredo 9/30/2016 Entry Age Normal 5-Year Smoothing 7.90% 3.25% 3.25% Longview 12/31/2016 Entry Age Normal Market Value of Assets 8.00% 3.00% 3.00% Lubbock 12/31/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.00% 4.00% Lufkin 1 12/31/2014 Entry Age Normal 5-Year Smoothing 7.50% 2.50% 3.00% Marshall 12/31/2016 Entry Age Normal Market Value of Assets 7.75% 2.50% 4.00% McAllen 10/1/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.00% 4.00% Midland 12/31/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.50% Odessa 1/1/2017 Entry Age Normal 5-Year Smoothing 7.75% 3.00% 3.50% Orange 1/1/2017 Entry Age Normal Market Value of Assets 7.75% 2.00% 4.00% Paris 12/31/2014 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.50% Plainview 12/31/2015 Entry Age Normal 5-Year Smoothing 7.75% 2.50% 3.50% Port Arthur 12/31/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% San Angelo 12/31/2015 Entry Age Normal 5-Year Smoothing 7.90% 3.50% 3.50% San Benito 12/31/2015 Entry Age Normal Market Value of Assets 7.50% 2.50% 4.00% 19

25 Actuarial Assumptions and Methods Plan (System) AV Effective Date Actuarial Cost Method Asset Valuation Method Investment Rate of Return Inflation Payroll Growth Rate Sweetwater 12/31/2016 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% Temple 9/30/2016 Entry Age Normal 5-Year Smoothing 7.75% 3.75% 3.75% Texarkana 12/31/2015 Entry Age Normal 5-Year Smoothing 7.75% 3.25% 3.25% Texas City 12/31/2016 Entry Age Normal 5-Year Smoothing 7.75% 2.50% 3.00% The Woodlands 1/1/2017 Entry Age Normal Market Value of Assets 7.00% 2.50% N/A Travis County ESD #6 12/31/2015 Entry Age Normal 5-Year Smoothing 7.00% 3.00% 4.00% Tyler 12/31/2015 Entry Age Normal 5-Year Smoothing 7.65% 3.50% 3.50% University Park 1/1/2015 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.00% Waxahachie 10/1/2016 Entry Age Normal Market Value of Assets 7.00% 2.50% 4.00% Weslaco 9/30/2016 Entry Age Normal 5-Year Smoothing 7.25% 2.50% 3.25% Wichita Falls 1/1/2017 Entry Age Normal 5-Year Smoothing 8.00% 3.00% 4.50% Median: 7.75% 3.00% 3.75% Average: 7.70% 2.93% 3.69% 1 The plan has submitted its 2016 actuarial valuation, however the PRB has been unable to reconcile the differences in actuarial liabilities that resulted from a change in actuarial firms so the data from that valuation has not been included in this table. 20

26 Actuarial Valuation Summary as of Valuation Date Plan (System) Certified Actuary Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liability Unfunded Actuarial Accrued Liability Funded Ratio Covered Payroll UAAL/ Payroll Ratio Amortization Period (AVA) (AAL) (UAAL) (% Funded) (%) (a) (b) (b) - (a) = (c) (a)/(b) (d) (c) / (d) (YEARS) Abilene John M. Crider Jr. 10/1/2015 $56,624,807 $100,037,237 $43,412, % $13,729, % 31.5 Amarillo John M. Crider Jr. 12/31/2015 $149,121,213 $182,249,969 $33,128, % $19,208, % 34.5 Atlanta Rudd & Wisdom 12/31/2016 $3,954,272 $4,814,808 $860, % $629, % 28.4 Beaumont Foster & Foster 12/31/2016 $109,972,497 $162,841,573 $52,869, % $19,246, % 104 Big Spring Dean Actuaries 1/1/2015 $10,962,120 $19,996,433 $9,034, % $3,634, % Brownwood Rudd & Wisdom 12/31/2015 $3,678,228 $8,242,106 $4,563, % $1,770, % 36.1 Cleburne Rudd & Wisdom 12/31/2016 $22,290,500 $34,074,747 $11,784, % $4,242, % 49.6 Conroe Corpus Christi Retirement Horizons 12/31/2015 $21,841,180 $35,508,575 $13,667, % $8,154, % 31.4 Rudd & Wisdom 12/31/2016 $141,141,270 $227,137,138 $85,995, % $32,381, % 23.1 Corsicana Rudd & Wisdom 12/31/2016 $9,225,595 $17,360,940 $8,135, % $3,847, % 28.9 Denison John M. Crider Jr. 12/31/2015 $16,377,196 $22,020,784 $5,643, % $3,095, % 27.1 Denton Rudd & Wisdom 12/31/2015 $72,693,078 $89,942,685 $17,249, % $14,965, % 31.6 Galveston Rudd & Wisdom 12/31/2016 $43,337,296 $63,690,564 $20,353, % $7,917, % Infinite Greenville 1 John M. Crider Jr. 12/31/2016 $13,695,526 $28,717,398 $15,021, % $3,881, % 38 Harlingen Retirement Horizons 12/31/2015 $27,704,447 $43,891,853 $16,187, % $6,561, % Infinite 21

27 Actuarial Valuation Summary as of Valuation Date Plan (System) Certified Actuary Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liability Unfunded Actuarial Accrued Liability Funded Ratio Covered Payroll UAAL/ Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (%) (a) (b) (b) - (a) = (c) (a)/(b) (d) (c) / (d) Amortization Period (YEARS) Irving 2 John M. Crider Jr. 12/31/2015 $184,782,020 $246,655,353 $61,873, % $27,073, % 33 Killeen Rudd & Wisdom 9/30/2016 $37,418,102 $53,652,777 $16,234, % $14,180, % 22.8 Laredo Rudd & Wisdom 9/30/2016 $134,249,115 $221,982,300 $87,733, % $35,063, % 28 Longview Foster & Foster 12/31/2016 $40,798,027 $89,598,884 $48,800, % $12,731, % 50.7 Lubbock John M. Crider Jr. 12/31/2016 $194,664,263 $268,017,378 $73,353, % $30,503, % 33.5 Lufkin 3 Marshall Retirement Horizons Retirement Horizons 12/31/2014 $14,203,227 $32,640,551 $18,437, % $4,966, % /31/2016 $7,712,228 $18,353,876 $10,641, % $2,670, % 56.4 McAllen John M. Crider Jr. 10/1/2016 $48,260,416 $69,831,849 $21,571, % $11,520, % 41.4 Midland John M. Crider Jr. 12/31/2015 $87,000,390 $132,269,082 $45,268, % $17,097, % 44.7 Odessa Foster & Foster 1/1/2017 $47,850,754 $106,053,931 $58,203, % $11,378, % 46.5 Orange Foster & Foster 1/1/2017 $8,154,674 $16,353,849 $8,199, % $2,440, % 69.3 Paris John M. Crider Jr. 12/31/2014 $5,980,762 $13,991,898 $8,011, % $2,575, % 26.1 Plainview Retirement Horizons 12/31/2015 $5,826,588 $15,608,454 $9,781, % $2,155, % 31.6 Port Arthur John M. Crider Jr. 12/31/2015 $45,290,253 $58,083,175 $12,792, % $7,959, % 18.3 San Angelo Retirement Horizons 12/31/2015 $61,469,721 $93,632,760 $32,163, % $11,457, %

28 Actuarial Valuation Summary as of Valuation Date Plan (System) San Benito Certified Actuary Retirement Horizons Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liability Unfunded Actuarial Accrued Liability Funded Ratio Covered Payroll UAAL/ Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (%) (a) (b) (b) - (a) = (c) (a)/(b) (d) (c) / (d) Amortization Period (YEARS) 12/31/2015 $3,301,643 $5,455,731 $2,154, % $1,374, % 21.7 Sweetwater John M. Crider Jr. 12/31/2016 $8,437,694 $12,054,904 $3,617, % $1,578, % 27.5 Temple Retirement Horizons 9/30/2016 $42,274,104 $56,277,136 $14,003, % $8,488, % 28.4 Texarkana Rudd & Wisdom 12/31/2015 $33,102,650 $37,889,368 $4,786, % $4,024, % 16.3 Texas City Retirement Horizons 12/31/2016 $15,853,841 $31,474,576 $15,620, % $5,186, % 28 The Woodlands Foster & Foster 1/1/2017 $26,198,326 $26,569,468 $371, % $11,383, % 2.7 Travis County ESD #6 John M. Crider Jr. 12/31/2015 $12,605,736 $17,603,910 $4,998, % $5,699, % 5.8 Tyler Rudd & Wisdom 12/31/2015 $64,892,871 $85,532,494 $20,639, % $11,576, % 21.6 University Park 4 John M. Crider Jr. 1/1/2015 $9,440,082 $20,598,361 $11,158, % $3,112, % 53.7 Waxahachie Weslaco Retirement Horizons Retirement Horizons 10/1/2016 $14,201,159 $21,240,580 $7,039, % $4,270, % /30/2016 $9,440,473 $13,775,101 $4,334, % $3,902, % 14.1 Wichita Falls Foster & Foster 1/1/2017 $49,802,579 $79,707,755 $29,905, % $11,279, % Amortization period reflects an employer contribution increase to 17.30% of payroll as of October 1, 2017 and an increase to 19.30% effective October 1, Amortization period reflects an employer contribution increase of 1.10% effective January 1, 2017, additional employees hired after the valuation date, and member contribution increases of 0.50% effective February 1, 2017 and January 1, The plan has submitted its 2016 actuarial valuation, however the PRB has been unable to reconcile the differences in actuarial liabilities that resulted from a change in actuarial firms so the data from that valuation has not been included in this table. 4 Based on the plan design changes made by HB 3056, the plan's actuary estimates the amortization period as of 1/1/2015 would be 88.4 years. However, this estimate does not take into account a subsequent reduction in the employee contribution rate. 23

29 Plans Grouped by Amortization Period Ranges As of Most Recent Actuarial Valuation Number of Plans Infinite Infinite Years 24

30 Plans Grouped by Asset Value As of Most Recent Actuarial Valuation Number of Plans 5 6 Less than $10 $10 - $25 $25 - $50 $50 - $100 Greater than $100 Actuarial Value of Assets (in millions) 25

31 Amortization Periods by Plan (System) As of Most Recent Actuarial Valuation Abilene Amarillo Atlanta Beaumont Big Spring Brownwood Cleburne Conroe Corpus Christi Corsicana Denison Denton Galveston Greenville Harlingen Irving Killeen Laredo Longview Lubbock Lufkin Marshall McAllen Midland Odessa Orange Paris Plainview Port Arthur San Angelo San Benito Sweetwater Temple Texarkana Texas City The Woodlands Travis County ESD #6 Tyler University Park Waxahachie Weslaco Wichita Falls I n f i n i t e I n f i n i t e KEY: Plans with infinite amortization periods Plans with amortization periods >= 40, but not infinite Plans with amortization periods > 30 years, < 40 years Plans with amortization periods > 25 years, <= 30 years Plans with amortization periods >= 10 years, <= 25 years Plans with amortization periods > 0 years, < 10 years Years 26

32 Actuarial Funded Ratio As of Most Recent Actuarial Valuation Funded Ratio = (AVA/AAL) 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% % Abilene Amarillo Atlanta Beaumont Big Spring Brownwood Cleburne Conroe Corpus Christi Corsicana Denison Denton Galveston Greenville Harlingen Irving Killeen Laredo Longview Lubbock Lufkin Marshall McAllen Midland Odessa Orange Paris Plainview Port Arthur San Angelo San Benito Sweetwater Temple Texarkana Texas City The Woodlands Travis County ESD #6 Tyler University Park Waxahachie Weslaco Wichita Falls 27

33 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Abilene Amarillo Atlanta Beaumont Big Spring Brownwood Cleburne Conroe Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period 9/30/2011 $49.43 $88.41 $ % $ % /1/2013 $52.92 $92.05 $ % $ % /1/2015 $56.62 $ $ % $ % /1/2012 $ $ $ % $ % /1/2014 $ $ $ % $ % /31/2015 $ $ $ % $ % /31/2012 $2.98 $4.09 $ % $ % Infinite 12/31/2014 $3.55 $4.34 $ % $ % /31/2016 $3.95 $4.81 $ % $ % /31/2012 $92.03 $ $ % $ % /31/2014 $ $ $ % $ % /31/2016 $ $ $ % $ % /1/2012 $11.13 $18.15 $ % $ % /1/2013 $9.89 $17.43 $ % $ % /1/2015 $10.96 $20.00 $ % $ % /31/2011 $2.85 $7.14 $ % $ % /31/2013 $3.29 $7.52 $ % $ % /31/2015 $3.68 $8.24 $ % $ % /31/2012 $16.29 $28.40 $ % $ % /31/2014 $20.35 $31.17 $ % $ % /31/2016 $22.29 $34.07 $ % $ % /31/2011 $15.39 $25.41 $ % $ % /31/2013 $18.13 $29.34 $ % $ % /31/2015 $21.84 $35.51 $ % $ % 31.4 (YEARS) 28

34 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Corpus Christi Corsicana Denison Denton Galveston Greenville 1 Harlingen Irving 2 Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period 12/31/2012 $ $ $ % $ % /31/2014 $ $ $ % $ % /31/2016 $ $ $ % $ % /31/2012 $6.96 $14.52 $ % $ % /31/2014 $8.43 $15.74 $ % $ % /31/2016 $9.23 $17.36 $ % $ % 28.9 (YEARS) 1/1/2012 $13.68 $19.23 $ % $ % /1/2014 $14.58 $20.36 $ % $ % /31/2015 $16.38 $22.02 $ % $ % /31/2011 $54.17 $75.23 $ % $ % /31/2013 $62.09 $80.49 $ % $ % /31/2015 $72.69 $89.94 $ % $ % /1/2014 $39.59 $56.84 $ % $ % /31/2015 $42.43 $62.30 $ % $ % /31/2016 $43.34 $63.69 $ % $ % Infinite 12/31/2012 $12.20 $25.72 $ % $ % Infinite 12/31/2014 $13.44 $27.46 $ % $ % /31/2016 $13.70 $28.72 $ % $ % /31/2011 $22.27 $34.22 $ % $ % Infinite 12/31/2013 $28.34 $39.93 $ % $ % /31/2015 $27.70 $43.89 $ % $ % Infinite 1/1/2012 $ $ $ % $ % Infinite 1/1/2014 $ $ $ % $ % /31/2015 $ $ $ % $ %

35 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Killeen Laredo Longview Lubbock Lufkin 3 Marshall McAllen Midland Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period (YEARS) 9/30/2012 $27.53 $41.14 $ % $ % /30/2014 $32.60 $49.06 $ % $ % /30/2016 $37.42 $53.65 $ % $ % /30/2012 $95.14 $ $ % $ % /30/2014 $ $ $ % $ % /30/2016 $ $ $ % $ % /31/2014 $45.22 $84.17 $ % $ % /31/2015 $41.66 $88.00 $ % $ % /31/2016 $40.80 $89.60 $ % $ % /1/2013 $ $ $ % $ % /1/2015 $ $ $ % $ % /31/2016 $ $ $ % $ % /31/2010 $10.10 $27.05 $ % $ % /31/2012 $11.27 $29.03 $ % $ % /31/2014 $14.20 $32.64 $ % $ % /31/2012 $6.99 $15.82 $ % $ % /31/2014 $8.00 $17.25 $ % $ % /31/2016 $7.71 $18.35 $ % $ % /30/2012 $37.84 $57.22 $ % $ % /1/2014 $44.68 $63.12 $ % $ % /1/2016 $48.26 $69.83 $ % $ % /1/2012 $73.07 $ $ % $ % /1/2014 $78.48 $ $ % $ % /31/2015 $87.00 $ $ % $ %

36 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Odessa Orange Paris Plainview Port Arthur San Angelo San Benito Sweetwater Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period (YEARS) 1/1/2015 $48.59 $97.68 $ % $ % Infinite 1/1/2016 $48.03 $ $ % $ % Infinite 1/1/2017 $47.85 $ $ % $ % /31/2012 $8.77 $15.31 $ % $ % /1/2015 $9.38 $16.35 $ % $ % /1/2017 $8.15 $16.35 $ % $ % /1/2011 $6.74 $12.96 $ % $ % /1/2013 $6.11 $13.60 $ % $ % /31/2014 $5.98 $13.99 $ % $ % /31/2011 $4.97 $12.70 $ % $ % /31/2013 $5.26 $13.49 $ % $ % /31/2015 $5.83 $15.61 $ % $ % /1/2012 $36.12 $49.64 $ % $ % /1/2014 $40.75 $52.66 $ % $ % /31/2015 $45.29 $58.08 $ % $ % /31/2011 $49.90 $76.89 $ % $ % /31/2013 $54.23 $83.42 $ % $ % /31/2015 $61.47 $93.63 $ % $ % /31/2011 $2.52 $4.24 $ % $ % /31/2013 $3.22 $5.29 $ % $ % /31/2015 $3.30 $5.46 $ % $ % /31/2012 $7.22 $10.38 $ % $ % Infinite 12/31/2014 $8.18 $11.85 $ % $ % /31/2016 $8.44 $12.05 $ % $ %

37 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Temple Texarkana Texas City The Woodlands 4 Travis County ESD #6 Tyler University Park 5 Waxahachie Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period (YEARS) 9/30/2012 $34.40 $45.15 $ % $ % /30/2014 $39.06 $50.61 $ % $ % /30/2016 $42.27 $56.28 $ % $ % /31/2011 $26.72 $33.24 $ % $ % /31/2013 $30.06 $35.52 $ % $ % /31/2015 $33.10 $37.89 $ % $ % /31/2012 $14.86 $28.06 $ % $ % /31/2014 $16.27 $29.92 $ % $ % /31/2016 $15.85 $31.47 $ % $ % /1/2016 $22.18 $22.08 ($0.10) % $ % 0.0 1/1/2017 $26.20 $26.57 $ % $ % /31/2013 $7.55 $12.00 $ % $ % 7.3 1/1/2014 $7.55 $12.22 $ % $ % /31/2015 $12.61 $17.60 $ % $ % /31/2011 $49.22 $70.47 $ % $ % /31/2013 $56.55 $76.82 $ % $ % /31/2015 $64.89 $85.53 $ % $ % /31/2010 $9.01 $17.78 $ % $ % /31/2012 $8.56 $19.33 $ % $ % /1/2015 $9.44 $20.60 $ % $ % /1/2012 $10.46 $16.23 $ % $ % /1/2014 $13.72 $19.91 $ % $ % /1/2016 $14.20 $21.24 $ % $ %

38 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) Weslaco Wichita Falls Actuarial Valuation Date Actuarial Value of Assets (in Millions) Actuarial Accrued Liability (in Millions) Unfunded Actuarial Accrued Liability (in Millions) Funded Ratio Covered Payroll (in Millions) UAAL / Payroll Ratio (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) - ( a ) ( a ) / ( b ) ( c ) ( b - a ) / ( c ) Remaining Amortization Period (YEARS) 9/30/2012 $6.99 $11.03 $ % $ % /30/2014 $8.36 $12.07 $ % $ % /30/2016 $9.44 $13.78 $ % $ % /1/2015 $47.13 $72.25 $ % $ % /1/2016 $48.59 $75.48 $ % $ % /1/2017 $49.80 $79.71 $ % $ % Current amortization period reflects an employer contribution increase to 17.30% of payroll as of October 1, 2017 and an increase to 19.30% effective October 1, Current amortization period reflects an employer contribution increase of 1.10% effective January 1, 2017, additional employees hired after the valuation date, and member contribution increases of 0.50% effective February 1, 2017 and January 1, The prior amortization period is calculated by the PRB in consultation with the plan actuary, reflecting an employer contribution rate increase of 0.65% effective January 1, The plan has submitted its 2016 actuarial valuation, however the PRB has been unable to reconcile the differences in actuarial liabilities that resulted from a change in actuarial firms so the data from that valuation has not been included in this table. 4 The Woodlands Firefighters' Retirement System is a new plan with only two actuarial valuations submitted to the PRB as of the time this report was created. 5 Based on the plan design changes made by HB 3056, the plan's actuary estimates the amortization period as of 1/1/2015 would be 88.4 years. However, this estimate does not take into account a subsequent reduction in the employee contribution rate. 33

39 Plan Membership Plan (System) Effective Date Active Members Total Annuitants Terminated Members Total Members Actives / Annuitants Abilene 9/30/ Amarillo 12/31/ Atlanta 12/31/ Beaumont 12/31/ Big Spring 12/31/ Brownwood 12/31/ Cleburne 12/31/ Conroe 12/31/ Corpus Christi 12/31/ Corsicana 12/31/ Denison 12/31/ Denton 12/31/ Galveston 12/31/ Greenville 12/31/ Harlingen 9/30/ Irving 12/31/ Killeen 9/30/ Laredo 9/30/ Longview 12/31/ Lubbock 12/31/ Lufkin 12/31/ Marshall 12/31/ McAllen 10/1/ Midland 12/31/ Odessa 1/1/ Orange 1/1/ Paris 12/31/ Plainview 12/31/ Port Arthur 12/31/ San Angelo 12/31/ San Benito 9/30/