Texas Local Fire Fighters Retirement Act (TLFFRA) Pension Report

Transcription

1 Texas Local Fire Fighters Retirement Act (TLFFRA) Pension Report February 2016 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, Executive Director Michelle 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 Guidelines for Actuarial Soundness... 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) Investment Rates of Return (by Plan) 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 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan Membership and Contributions Benefits Benefit Summary Directory Plan Contact Information Plan Contractor Information Glossary... 64

5 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 331 public retirement plans; state and local government officials; and the general public. The PRB monitors the financial and actuarial soundness of 93 actuarially funded defined benefit public retirement systems in Texas, as well as their compliance with state law. The agency also oversees 238 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

6 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. The newest plan, The Woodlands Firefighters Retirement System is not included in the Financial or Actuarial sections of this report, since it does not have assets to report at this time. 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

7 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 is also developing online training, and the online training portal can be found here or on the PRB website. Currently the Business Administration course is available; the remaining MET Core courses will be rolled out over 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 approved a procedure for the referral of TLFFRA appeals to SOAH on vember 13, 2013, and also created the TLFFRA tice of Appeal Form for the convenience of TLFFRA systems and their members. To date, the PRB has referred one TLFFRA appeal to SOAH. TLFFRA Specialist The PRB was required to assign one person to specialize in providing assistance and training to TLFFRA plans. The PRB designated Joey Evans to work as the TLFFRA specialist. He can be contacted at joey.evans@prb.state.tx.us. 3

8 PRB Guidelines for Actuarial Soundness Actuarial assumptions and methodologies are used to determine the proper funding policy for public pension plans. Actuaries include plan participant demographics, benefit obligations, and economic forecast assumptions to calculate the periodic contributions necessary to ensure the long-term financial viability of pension plans; and to estimate the impact that potential plan changes will have on their financial position. 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 September 28, Under the current version of the Guidelines, an actuarially funded defined benefit public retirement system is considered actuarially sound if an actuary determines that it has sufficient money to pay the ongoing normal cost and amortize the unfunded liability over a period of no more than 40 years, preferably 15 to 25 years. This measure of actuarial soundness represents one of the five guidelines, presented below. 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 percent 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 percent of payroll over the amortization period. 4. Funding should be adequate to amortize the unfunded actuarial accrued liability over a period not to exceed 40 years, with years being a more preferable target. 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. 4

9 Executive Summary This report provides general and comparative pension-related data for paid and part-paid retirement plans 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). Based on the information received by the PRB, this report is organized into four sections: Financial, Actuarial, Benefits, and Directory. The Financial section displays key data from the most recently received audited annual financial reports. The first item in the section shows the aggregate market value of TLFFRA plan assets, with the next table showing the market value of assets broken down by plan. The following section includes a chart to show the number of plans in each grouping of assets based on market value. The last table in this section shows the 1-year, 3- year, and 10-year period as well as long-term net investment rates of return from the most recent Investment Returns and Assumptions Report (PRB-1000) forms submitted by TLFFRA plans. The Actuarial section contains data from the most recently received actuarial valuation from each plan. According to the Texas Government Code Section , each plan must employ an actuary to make a valuation at least once every three years. The first table in this section describes the actuarial assumptions and methods for each plan. The second table summarizes key actuarial information for each plan as reported in their actuarial valuations. The summary includes the actuarial data, such as actuarial value of assets, unfunded actuarial accrued liability, funded ratio, and amortization period. The second part of the Actuarial section contains charts to show comparative data. The charts included in this section are as follows: plans grouped by amortization period ranges; plans grouped by amount of assets using the actuarial value of assets; amortization periods by plan; and actuarial funded status by plan. The next table in this section shows actuarial funding progress. This table tracks key actuarial data, including the funded ratios and amortization periods, from the last three actuarial valuations submitted to the PRB. The last table in this section lists membership numbers as well as employer and employee contribution rates for each plan. The Benefits section includes a breakdown of pension benefits offered by each plan. The table displays data that the PRB has received through various documents such as a summary plan description, plan document, or financial and actuarial reports. This section provides various pension benefit-related elements for each plan, such as eligibility requirements, benefit formula, and final average salary. The table also shows additional retirement benefit options, including whether a plan has a deferred retirement option plan (DROP) and the parameters of that DROP. The Directory section provides the contact information for each plan, including: mailing address, phone number, website, and name of the chairperson. This section also contains a contact list for volunteer TLFFRA plans. The last item in the directory section includes the contractor information for the paid and part-paid TLFFRA plans. The PRB surveyed the plans for this information. The tables consist of information on professional contractors used by each plan, including accountants, actuaries, attorneys, auditors, investment consultants, investment custodians, and investment managers. 5

10 Financial 6

11 Market Value of Assets for All Paid and Part Paid Systems As of Most Recent Annual Financial Report Revenue Employer Contributions $65,236, Member Contributions $48,294, Miscellaneous Contributions 1 $85, Investment Income $91,860, Miscellaneous Income 1 $222, Total Revenue $205,701, Disbursements Benefits Paid $130,279, Contributions Withdrawn 2 $2,899, Administrative Expenses $3,119, Investment Expenses 3 $8,051, Miscellaneous Expenses 4 $196, Total Disbursements $144,545, Gross Total Assets of All Systems $1,841,271, Total Liabilities of All Systems $27,808, Net Total Assets of All Systems $1,813,463, 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 t 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. 7

12 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 9/30/2014 $7,353,271 $6,445,636 $55,316,535 $6,988 $55,309,547 Amarillo 12/31/2014 $12,490,623 $10,610,276 $176,736,913 $26,271,230 $150,465,683 Atlanta 12/31/2014 $367,099 $176,509 $3,628,834 $0 $3,628,834 Beaumont 12/31/2014 $8,592,993 $7,586,555 $102,800,571 $0 $102,800,571 Big Spring 12/31/2014 $1,385,660 $1,421,623 $11,157,022 $0 $11,157,022 Brownwood 2 12/31/2014 $516,138 $498,738 $3,443,807 $39,298 $3,404,509 Cleburne 12/31/2014 $2,739,688 $1,390,197 $20,983,672 $0 $20,983,672 Conroe 12/31/2014 $3,237,713 $1,502,591 $20,023,035 $80,088 $19,942,947 Corpus Christi 12/31/2014 $16,969,557 $12,314,371 $131,106,707 $292,288 $130,814,419 Corsicana 12/31/2014 $1,137,297 $1,185,310 $8,161,618 $0 $8,161,618 Denison 12/31/2014 $2,325,414 $1,313,823 $16,398,506 $0 $16,398,506 Denton 12/31/2014 $8,743,234 $4,136,888 $71,020,095 $1,577 $71,018,518 Galveston 12/31/2014 $3,785,791 $3,469,516 $41,358,330 $3,681 $41,354,649 Greenville 12/31/2014 $1,957,694 $1,909,873 $13,726,781 $129,579 $13,597,202 Harlingen 9/30/2014 $4,207,848 $2,188,358 $28,971,028 $11,205 $28,959,823 Irving 12/31/2014 $15,783,949 $8,238,416 $178,861,620 $21,788 $178,839,832 Killeen 9/30/2014 $4,917,903 $2,355,031 $31,855,151 $10,950 $31,844,201 Laredo 9/30/2014 $19,958,427 $9,083,410 $118,434,055 $94,417 $118,339,638 Longview 12/31/2014 $5,078,940 $5,874,046 $45,792,514 $364,819 $45,427,695 Lubbock 12/31/2014 $11,330,489 $14,261,330 $182,324,171 $0 $182,324,171 Lufkin 12/31/2014 $2,534,368 $1,564,225 $14,280,081 $15,600 $14,264,481 Marshall 12/31/2014 $1,266,802 $1,123,104 $8,003,545 $0 $8,003,545 McAllen 9/30/2014 $5,508,547 $2,945,062 $45,283,837 $0 $45,283,837 Midland 12/31/2014 $8,656,917 $7,055,311 $82,635,021 $82,601 $82,552,420 Odessa 12/31/2014 $6,471,247 $5,851,364 $47,457,532 $2,191 $47,455,341 Orange 12/31/2014 $924,791 $1,210,295 $9,330,655 $21,340 $9,309,315 Paris 12/31/2014 $885,136 $1,285,409 $5,483,857 $22,124 $5,461,733 Plainview 12/31/2014 $880,838 $873,455 $5,476,842 $0 $5,476,842 Port Arthur 12/31/2014 $5,383,939 $3,231,787 $45,269,684 $183,497 $45,086,187 San Angelo 12/31/2014 $7,037,189 $4,748,770 $62,680,087 $0 $62,680,087 San Benito 9/30/2014 $557,730 $381,697 $3,286,977 $43,089 $3,243,888 8

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 Sweetwater 12/31/2014 $922,123 $749,554 $8,323,259 $21,782 $8,301,477 Temple 9/30/2014 $4,509,375 $2,745,704 $39,633,562 $0 $39,633,562 Texarkana 12/31/2014 $3,271,509 $2,222,202 $33,273,517 $29,040 $33,244,477 Texas City 3 9/30/2013 $3,969,280 $1,997,006 $14,777,474 $14,801 $14,762,673 Travis County ESD #6 12/31/2014 $2,467,402 $176,646 $10,298,645 $0 $10,298,645 Tyler 12/31/2014 $6,490,047 $3,623,123 $64,362,549 $0 $64,362,549 University Park 12/31/2014 $1,558,111 $1,547,579 $9,515,461 $0 $9,515,461 Waxahachie 9/30/2014 $2,140,312 $724,078 $13,717,245 $0 $13,717,245 Weslaco 9/30/2014 $1,477,994 $578,753 $8,562,953 $44,657 $8,518,296 Wichita Falls 12/31/2014 $5,907,773 $3,948,114 $47,517,957 $0 $47,517,957 1 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. 2 Unaudited. The system has informed the PRB that they will be conducting an audit for fiscal year The system has informed the PRB that they are working to submit their 2014 audit as soon as it becomes available. 9

14 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

15 Net Investment Rates of Return (by Plan) Plan (System) Effective Date 1 Year 3 Year 10 Year Long Term 30 Year/Oldest Available Date Assumed Rate of Return Abilene 9/30/ % 10.86% 6.07% 6.64% 10/1/ % Amarillo 12/31/ % 12.97% 7.77% 8.91% 1/1/ % Atlanta 12/31/ % 10.21% 5.68% 6.28% 1/1/ % Beaumont 12/31/ % 8.88% 4.89% 6.83% 1/1/ % Big Spring 12/31/ % 9.95% 5.93% 8.36% 1/1/ % Brownwood 12/31/ % 8.95% 4.84% 5.65% 1/1/ % Cleburne 12/31/ % 11.05% 5.17% N/A N/A 7.50% Conroe 12/31/ % 8.21% 4.56% 4.95% 1/1/ % Corpus Christi 12/31/ % 12.46% 7.05% 7.32% 12/31/ % Corsicana 12/31/ % 6.97% 5.19% 4.43% 1/1/ % Denison 12/31/ % 11.60% 6.22% 7.01% 1/1/ % Denton 12/31/ % 9.67% 7.16% 7.99% 1/1/ % Galveston 12/31/ % 9.29% 5.07% 6.97% 1/1/ % Greenville 12/31/ % 10.84% 5.81% 6.99% 1/1/ % Harlingen 9/30/ % 13.00% 7.40% 8.63% 4/1/ % Irving 12/31/ % 12.75% 6.49% 6.51% 1/1/ % Killeen 9/30/ % 7.00% 5.49% 5.70% 10/1/ % Laredo 9/30/ % 10.23% 6.01% 5.11% 9/30/ % Longview 12/31/ % 8.17% 5.00% 6.93% 1/1/ % Lubbock 12/31/ % 8.52% 6.07% 8.21% 1/1/ % Lufkin 12/31/ % 10.60% 4.90% N/A N/A 7.50% Marshall 12/31/ % 10.60% N/A 5.80% 1/1/ % McAllen 9/30/ % 11.69% 6.13% 7.49% 10/1/ % Midland 12/31/ % 9.50% 5.51% 8.53% 1/1/ % Odessa 12/31/ % 8.78% 4.38% 7.88% 1/1/ % Orange 12/31/ % 9.35% 5.16% 6.78% 1/1/ % Paris 12/31/ % 5.16% 3.69% 5.72% 1/1/ % Plainview 12/31/ % 8.49% 4.61% 5.38% 1/1/ % Port Arthur 12/31/ % 11.43% 6.12% 7.51% 1/1/ % San Angelo 12/31/ % 6.82% 6.03% 7.32% 12/31/ % San Benito 9/30/ % 11.34% N/A N/A N/A 7.00% Sweetwater 12/31/ % 5.20% 6.12% 8.52% 1/1/ % 11

16 Net Investment Rates of Return (by Plan) Plan (System) Effective Date 1 Year 3 Year 10 Year Long Term 30 Year/Oldest Available Date Assumed Rate of Return Temple 9/30/ % 11.34% 6.55% 6.65% 12/31/ % Texarkana 12/31/ % 5.77% 7.07% 8.05% 1/1/ % Texas City 12/31/ % 8.77% 5.66% 5.56% 1/1/ % Travis County ESD #6 12/31/ % 10.60% N/A N/A N/A 7.00% Tyler 12/31/ % 12.01% 6.21% 7.69% 1/1/ % University Park 12/31/ % 10.37% 5.32% 6.41% 12/31/ % Waxahachie 9/30/ % 12.31% 6.22% 6.11% 9/30/ % Weslaco 9/30/ % 9.20% 3.40% 5.12% 10/1/ % Wichita Falls 12/31/ % 9.39% 6.18% 7.65% 1/1/ % 12

17 Actuarial 13

18 Actuarial Assumptions and Methods Plan (System) AV Effective Date Actuarial Cost Method Amortization Method Asset Valuation Method Investment Rate of Return Inflation Abilene 10/1/2013 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Amarillo 1/1/2014 Entry Age rmal Level Percent Open 5 year Smoothing 8.25% 3.00% Atlanta 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 7.50% 3.50% Beaumont 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.50% Big Spring 1/1/2013 Entry Age rmal Level Percent 5 year Smoothing 8.00% N/A Brownwood 12/31/2013 Entry Age rmal Level Percent Open 5 year Smoothing 7.50% 3.50% Cleburne 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 7.50% 3.50% Conroe 12/31/2013 Entry Age rmal Level Percent Open 5 year Smoothing 7.75% 4.00% Corpus Christi 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 7.90% 3.75% Corsicana 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 7.50% 3.50% Denison 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.50% Denton 12/31/2013 Entry Age rmal Level Percent 5 year Smoothing 7.00% 3.25% Galveston 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Greenville 12/31/2012 Entry Age rmal Level Percent 5 year Smoothing 8.25% 3.00% Harlingen 12/31/2013 Entry Age rmal Level Percent Open Market Value of Assets 8.00% 2.50% Irving 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 8.25% 3.00% Killeen 9/30/2014 Entry Age rmal Level Percent Open 5 year Smoothing 7.75% 3.50% Laredo 9/30/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.50% Longview 12/31/2014 Entry Age rmal Level Percent Market Value of Assets 8.00% 3.00% Lubbock 1/1/2015 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.00% Lufkin 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 7.50% 2.50% Marshall 12/31/2014 Entry Age rmal Level Percent Market Value of Assets 7.75% N/A McAllen 9/30/2014 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.00% Midland 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Odessa 1/1/2013 Entry Age rmal Level Percent 5 year Smoothing 8.25% 3.00% Orange 1/1/2015 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.00% Paris 1/1/2013 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Plainview 12/31/2013 Entry Age rmal Level Percent Open 5 year Smoothing 7.75% 2.50% Port Arthur 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% San Angelo 12/31/2013 Entry Age rmal Level Percent 5 year Smoothing 7.90% N/A San Benito 12/31/2013 Entry Age rmal Level Percent Open Market Value of Assets 7.00% 2.50% 14

19 Actuarial Assumptions and Methods Plan (System) AV Effective Date Actuarial Cost Method Amortization Method Asset Valuation Method Investment Rate of Return Inflation Sweetwater 12/31/2014 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Temple 9/30/2014 Entry Age rmal Level Percent Open 5 year Smoothing 8.00% 3.75% Texarkana 12/31/2013 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.50% Texas City 12/31/2014 Entry Age rmal Level Percent Open 5 year Smoothing 7.75% 2.50% Travis County ESD #6 1/1/2014 Entry Age rmal Level Percent 5 year Smoothing 7.00% 3.00% Tyler 12/31/2013 Entry Age rmal Level Percent 5 year Smoothing 7.75% 3.75% University Park 1/1/2015 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% Waxahachie 10/1/2014 Entry Age rmal Level Percent Market Value of Assets 7.00% 2.50% Weslaco 9/30/2014 Entry Age rmal Level Percent Open 5 year Smoothing 7.25% 3.25% Wichita Falls 1/1/2015 Entry Age rmal Level Percent 5 year Smoothing 8.00% 3.00% 15

20 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) (a)/(b) ( c ) (b a)/( c ) (YEARS) Abilene John M. Crider 10/1/2013 $52,920,100 $92,054,430 $39,134, % $12,623, % 33.5 Amarillo John M. Crider 1/1/2014 $132,542,271 $159,728,004 $27,185, % $16,649, % 28.8 Atlanta Rudd & Wisdom 12/31/2014 $3,549,153 $4,335,042 $785, % $602, % 36.2 Beaumont Foster & Foster 12/31/2014 $105,072,038 $144,479,947 $39,407, % $18,408, % 39.1 Big Spring Dean Actuaries 1/1/2013 $9,889,540 $17,433,912 $7,544, % $3,173, % 30.8 Brownwood Rudd & Wisdom 12/31/2013 $3,292,135 $7,522,774 $4,230, % $1,628, % 37.0 Cleburne Rudd & Wisdom 12/31/2014 $20,349,833 $31,165,605 $10,815, % $4,017, % 27.3 Conroe Corpus Christi Retirement Horizons 12/31/2013 $18,126,626 $29,344,347 $11,217, % $5,660, % 37.4 Rudd & Wisdom 12/31/2014 $126,273,629 $205,789,604 $79,515, % $29,484, % 23.1 Corsicana Rudd & Wisdom 12/31/2014 $8,427,052 $15,741,031 $7,313, % $3,761, % 24.2 Denison John M. Crider 1/1/2014 $14,577,695 $20,358,784 $5,781, % $3,093, % 29.1 Denton Rudd & Wisdom 12/31/2013 $62,089,743 $80,490,694 $18,400, % $13,790, % 24.0 Galveston John M. Crider 1/1/2014 $39,591,204 $56,839,842 $17,248, % $6,542, % 50.2 Greenville 1 John M. Crider 12/31/2012 $12,201,104 $25,717,409 $13,516, % $3,576, % 65.9 Harlingen Retirement Horizons 12/31/2013 $28,343,328 $39,930,327 $11,586, % $5,912, % 66.6 Irving 1 John M. Crider 1/1/2014 $156,223,428 $213,725,584 $57,502, % $25,482, %

21 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) (a)/(b) ( c ) (b a)/( c ) Amortization Period (YEARS) Killeen Rudd & Wisdom 9/30/2014 $32,604,554 $49,056,514 $16,451, % $12,457, % 29.5 Laredo Rudd & Wisdom 9/30/2014 $116,056,855 $194,345,799 $78,288, % $31,185, % 29.8 Longview Foster & Foster 12/31/2014 $45,224,598 $84,174,500 $38,949, % $11,141, % 41.4 Lubbock John M. Crider 1/1/2015 $186,077,176 $246,362,848 $60,285, % $28,340, % 27.6 Lufkin Marshall Retirement Horizons Retirement Horizons 12/31/2014 $14,203,277 $32,640,551 $18,437, % $4,966, % /31/2014 $8,003,545 $17,253,390 $9,249, % $2,466, % 43.2 McAllen John M. Crider 10/1/2014 $44,684,917 $63,124,660 $18,439, % $11,162, % 29.0 Midland John M. Crider 1/1/2015 $78,481,491 $117,444,545 $38,963, % $14,597, % 59.1 Odessa Foster & Foster 1/1/2015 $48,590,592 $97,677,142 $49,086, % $10,683, % Infinite Orange John M. Crider 1/1/2015 $9,383,309 $16,345,289 $6,961, % $2,292, % 58.2 Paris John M. Crider 1/1/2013 $6,111,951 $13,600,300 $7,488, % $2,323, % 29.2 Plainview Retirement Horizons 12/31/2013 $5,262,382 $13,493,203 $8,230, % $1,781, % 31.4 Port Arthur John M. Crider 1/1/2014 $40,754,274 $52,655,260 $11,900, % $7,423, % 17.0 San Angelo San Benito Retirement Horizons Retirement Horizons 12/31/2013 $54,227,452 $83,416,973 $29,189, % $10,412, % /31/2013 $3,216,957 $5,289,745 $2,072, % $1,220, % 21.7 Sweetwater John M. Crider 12/31/2014 $8,180,692 $11,854,720 $3,674, % $1,491, %

22 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) (a)/(b) ( c ) (b a)/( c ) Amortization Period (YEARS) Temple Rudd & Wisdom 9/30/2014 $39,056,649 $50,613,335 $11,556, % $7,446, % 23.0 Texarkana Rudd & Wisdom 12/31/2013 $30,058,082 $35,519,165 $5,461, % $4,019, % 19.6 Texas City Travis County ESD #6 Retirement Horizons 12/31/2014 $16,274,374 $29,920,425 $13,646, % $4,716, % 31.6 John M. Crider 1/1/2014 $7,554,521 $13,496,644 $5,942, % $5,199, % 7.3 Tyler Rudd & Wisdom 12/31/2013 $56,547,675 $76,823,319 $20,275, % $10,937, % 22.9 University Park Waxahachie Weslaco John M. Crider 1/1/2015 $9,440,082 $20,598,361 $11,158, % $3,112, % 53.7 Retirement Horizons Retirement Horizons 10/1/2014 $13,717,245 $19,907,219 $6,189, % $3,688, % /30/2014 $8,355,918 $12,070,005 $3,714, % $3,043, % 15.9 Wichita Falls John M. Crider 1/1/2015 $47,133,894 $72,251,770 $25,117, % $9,629, % Amortization period calculated by the PRB in consultation with the plan actuary, reflecting a contribution increase. 18

23 Plans Grouped by Amortization Period Ranges As of Most Recent Actuarial Valuation Number of Systems Infinite Infinite Years 19

24 Plans Grouped by Asset Value As of Most Recent Actuarial Valuation Number of Plans Less than $10 $10 - $25 $25 - $50 $50 - $100 Greater than $100 Actuarial Value of Assets (in millions) 20

25 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 Travis County ESD #6 Tyler University Park Waxahachie Weslaco Wichita Falls KEY: Plans with infinite amortization periods Plans with amortization periods > 40 years, but not infinite Plans with amortization periods > 25 years < 40 years Plans with amortization periods > 15 years < 25 years Plans with amortization periods < 15 years Years 21

26 Actuarial Funded Ratio As of Most Recent Actuarial Valuation 90.00% 80.00% 70.00% Percent Funded 60.00% 50.00% 40.00% 30.00% Funded Ratio (AVA/AAL) 20.00% 10.00% 0.00% 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 Travis County ESD #6 Tyler University Park Waxahachie Weslaco Wichita Falls 22

27 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Abilene Amarillo Atlanta Beaumont Big Spring Brownwood Cleburne Conroe (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 9/30/2009 $47.17 $77.28 $ % $ % /30/2011 $49.43 $88.41 $ % $ % /1/2013 $52.92 $92.05 $ % $ % /1/2010 $ $ $ % $ % /1/2012 $ $ $ % $ % /1/2014 $ $ $ % $ % /31/2009 $2.64 $3.55 $ % $ % /31/2012 $2.98 $4.09 $ % $ % Infinite 12/31/2014 $3.55 $4.34 $ % $ % /31/2010 $91.47 $ $ % $ % /31/2012 $92.03 $ $ % $ % /31/2014 $ $ $ % $ % /1/2010 $10.70 $16.07 $ % $ % /1/2012 $11.13 $18.15 $ % $ % /1/2013 $9.89 $17.43 $ % $ % /31/2009 $2.46 $6.21 $ % $ % /31/2011 $2.85 $7.14 $ % $ % /31/2013 $3.29 $7.52 $ % $ % /31/2010 $14.58 $25.67 $ % $ % /31/2012 $16.29 $28.40 $ % $ % /31/2014 $20.35 $31.17 $ % $ % /31/2009 $12.94 $22.48 $ % $ % /31/2011 $15.39 $25.41 $ % $ % /31/2013 $18.13 $29.34 $ % $ %

28 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Corpus Chris Corsicana Denison Denton Galveston Greenville 1 Harlingen Irving 1 (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 12/31/2010 $ $ $ % $ % /31/2012 $ $ $ % $ % /31/2014 $ $ $ % $ % /31/2010 $6.35 $12.22 $ % $ % /31/2012 $6.96 $14.52 $ % $ % /31/2014 $8.43 $15.74 $ % $ % /1/2010 $13.97 $17.18 $ % $ % 9.9 1/1/2012 $13.68 $19.23 $ % $ % /1/2014 $14.58 $20.36 $ % $ % /31/2009 $46.26 $66.19 $ % $ % /31/2011 $54.17 $75.23 $ % $ % /31/2013 $62.09 $80.49 $ % $ % /1/2010 $37.63 $51.72 $ % $ % /1/2012 $37.29 $54.15 $ % $ % /1/2014 $39.59 $56.84 $ % $ % /31/2008 $11.17 $22.02 $ % $ % /31/2010 $13.03 $23.83 $ % $ % /31/2012 $12.20 $25.72 $ % $ % /31/2009 $20.19 $30.95 $ % $ % Infinite 12/31/2011 $22.27 $34.22 $ % $ % Infinite 12/31/2013 $28.34 $39.93 $ % $ % /31/2009 $ $ $ % $ % /1/2012 $ $ $ % $ % Infinite 1/1/2014 $ $ $ % $ %

29 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Killeen Laredo Longview Lubbock Lufkin Marshall McAllen Midland (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 9/30/2010 $23.98 $37.16 $ % $ % /30/2012 $27.53 $41.14 $ % $ % /30/2014 $32.60 $49.06 $ % $ % /31/2010 $84.63 $ $ % $ % /30/2012 $95.14 $ $ % $ % /30/2014 $ $ $ % $ % /31/2011 $39.58 $76.09 $ % $ % Infinite 12/31/2013 $46.33 $82.40 $ % $ % /31/2014 $45.22 $84.17 $ % $ % /31/2010 $ $ $ % $ % /1/2013 $ $ $ % $ % /1/2015 $ $ $ % $ % /31/2010 $10.10 $27.05 $ % $ % /31/2012 $11.27 $29.03 $ % $ % /31/2014 $14.20 $32.64 $ % $ % /31/2010 $6.65 $14.17 $ % $ % /31/2012 $6.99 $15.82 $ % $ % /31/2014 $8.00 $17.25 $ % $ % /30/2010 $36.64 $51.57 $ % $ % /30/2012 $37.84 $57.22 $ % $ % /1/2014 $44.68 $63.12 $ % $ % /1/2010 $70.55 $90.34 $ % $ % /1/2012 $73.07 $ $ % $ % /1/2014 $78.48 $ $ % $ %

30 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Odessa Orange Paris Plainview Port Arthur San Angelo San Benito Sweetwater (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 1/1/2011 $46.17 $74.36 $ % $ % /1/2013 $42.76 $87.59 $ % $ % Infinite 1/1/2015 $48.59 $97.68 $ % $ % Infinite 12/31/2010 $9.04 $13.68 $ % $ % /31/2012 $8.77 $15.31 $ % $ % /1/2015 $9.38 $16.35 $ % $ % /1/2009 $6.14 $12.18 $ % $ % /1/2011 $6.74 $12.96 $ % $ % /1/2013 $6.11 $13.60 $ % $ % /31/2009 $4.46 $11.35 $ % $ % /31/2011 $4.97 $12.70 $ % $ % /31/2013 $5.26 $13.49 $ % $ % /1/2010 $33.23 $45.89 $ % $ % /1/2012 $36.12 $49.64 $ % $ % /1/2014 $40.75 $52.66 $ % $ % /31/2009 $47.96 $69.45 $ % $ % /31/2011 $49.90 $76.89 $ % $ % /31/2013 $54.23 $83.42 $ % $ % /31/2008 $1.70 $3.70 $ % $ % /31/2011 $2.52 $4.24 $ % $ % /31/2013 $3.22 $5.29 $ % $ % /31/2010 $7.44 $9.69 $ % $ % /31/2012 $7.22 $10.38 $ % $ % /31/2014 $8.18 $11.85 $ % $ %

31 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Temple Texarkana Texas City Travis County ESD #6 Tyler University Park Waxahachie Weslaco (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 9/30/2010 $33.27 $43.37 $ % $ % /30/2012 $34.40 $45.15 $ % $ % /30/2014 $39.06 $50.61 $ % $ % /31/2009 $24.69 $28.82 $ % $ % /31/2011 $26.72 $33.24 $ % $ % /31/2013 $30.06 $35.52 $ % $ % /31/2010 $13.56 $25.30 $ % $ % /31/2012 $14.86 $28.06 $ % $ % /31/2014 $16.27 $29.92 $ % $ % /1/2010 $1.16 $4.11 $ % $ % 9.1 1/1/2012 $3.88 $10.55 $ % $ % /1/2014 $7.55 $13.50 $ % $ % /31/2009 $45.39 $64.24 $ % $ % /31/2011 $49.22 $70.47 $ % $ % /31/2013 $56.55 $76.82 $ % $ % /31/2010 $9.01 $17.78 $ % $ % /31/2012 $8.56 $19.33 $ % $ % /1/2015 $9.44 $20.60 $ % $ % /1/2010 $8.16 $13.32 $ % $ % /1/2012 $10.46 $16.23 $ % $ % /1/2014 $13.72 $19.91 $ % $ % /30/2009 $4.98 $9.29 $ % $ % /30/2012 $6.99 $11.03 $ % $ % /30/2014 $8.36 $12.07 $ % $ %

32 Schedule of Actuarial Funding Progress (Three Most Recent Valuations) Plan (System) 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 Remaining Amortization Period Wichita Falls (AVA) (AAL) (UAAL) (% Funded) (UAAL/Payroll) ( a ) ( b ) ( b ) ( a ) ( a ) / ( b ) ( c ) ( b a ) / ( c ) (YEARS) 12/31/2010 $41.11 $60.15 $ % $ % /31/2012 $41.96 $66.61 $ % $ % /1/2015 $47.13 $72.25 $ % $ % Most recent amortization period calculated by the PRB in consultation with the plan actuary, reflecting a contribution increase. 28

33 Plan Membership and Contributions Plan (System) Effective Date Active Members Total Annuitants Inactive Members Total Members Employer Contribution Member Contribution Abilene 9/30/ % 13.20% Amarillo 12/31/ % 13.00% Atlanta 12/31/ % 13.00% Beaumont 12/31/ % 15.00% Big Spring 12/31/ % 13.00% Brownwood 12/31/ % 8.00% Cleburne 12/31/ % 13.00% Conroe 12/31/ % 13.24% Corpus Christi 12/31/ % 13.10% Corsicana 12/31/ % 14.00% Denison 12/31/ % 12.00% Denton 12/31/ % 12.60% Galveston 12/31/ % 16.00% Greenville 12/31/ % 15.30% Harlingen 12/31/ % 13.00% Irving 12/31/ % 12.00% Killeen 12/31/ % 11.00% Laredo 9/30/ % 15.00% Longview 12/31/ % 15.00% Lubbock 1 12/31/ % 12.43% Lufkin 12/31/ % 13.20% Marshall 12/31/ % 14.00% McAllen 9/30/ % 11.00% Midland 12/31/ % 13.20% Odessa 12/31/ % 15.00% Orange 12/31/ % 11.00% Paris 12/31/ % 15.00% Plainview 2 12/31/ % 14.00% Port Arthur 12/31/ % 13.00% San Angelo 3 12/31/ % 14.20% San Benito 12/31/ % 12.00% 29

34 Plan Membership and Contributions Plan (System) Effective Date Active Members Total Annuitants Inactive Members Total Members Employer Contribution Member Contribution Sweetwater 12/31/ % 16.00% Temple 9/30/ % 15.00% Texarkana 9/30/ % 13.50% Texas City 12/31/ % 16.00% Travis County ESD #6 4 12/31/ % 20.00% Tyler 12/31/ % 13.50% University Park 1/1/ % 13.00% Waxahachie 10/1/ % 12.00% Weslaco 9/30/ % 12.00% Wichita Falls 12/31/ % 12.00% 1 Employer contribtuion effective 1/1/ Employer contribution effective 10/1/ Employer contribution rate reflects a weighted average of contributions for the plan's two tiers. 4 Member contribution effective 10/1/

35 Benefits 31

36 Benefit Summary Plans (Systems) Tier Eligible Members Eligibility Requirements (Age/YCS) Benefit Formula Final Average Salary Automatic COLA Retirement Benefit Options Social Security Abilene All 50/20 Amarillo All 50/20 Years of Credited Service x 3% x Final Average Salary + additional YCS x 3% for YCS between 20 and 21.5 years and $80 per month for YCS > 21.5 years Years of Credited Service x 3.45% x Final Average Salary Atlanta All 50/20 61% x Final Average Salary Beaumont All 50/20 Big Spring All 50/ % x Final Average Salary + $123 per month for each year of service in excess of 20 Years of Credited Service x 2.55% x Final Average Salary Highest 36 Month Salary or 78 biweekly pay periods Highest 36 Month Salary Highest 60 Month Salary, but not less than $1,000 Highest 60 Month Average Salary Highest 60 Month Average Salary BackDROP, 3 yr. max. Employee contributions credited, no interest or COLA. BackDROP, 3 yr. max. Employee contributions credited, no interest or COLA. RetroDROP, 2 yr. max. Employee contributions credited, no interest or COLA. RetroDROP, 5 or 7 yr. max. Employee contributions credited, no interest or COLA. DROP, 5 yr. max. 4% interest and employee contributions credited, no COLA. Or Partial Lump Sum Option. Yes Brownwood All 50/20 50% x Final Average Salary + $54.50 per month for YCS > 20 Highest 60 consecutive months DROP, 2 yr. max. Employee contributions and COLA credited, no interest. Or RetroDROP, max 2 years. Employee contributions credited, no interest or COLA. Yes Cleburne All 50/20 68% x Final Average Salary + $97 per year >20 Final 60 Month Average ReverseDROP, 5 yr. max. Employee contributions and COLA credited, no interest. N/A 32

37 Benefit Summary Plans (Systems) Tier Eligible Members Eligibility Requirements (Age/YCS) Benefit Formula Final Average Salary Automatic COLA Retirement Benefit Options Social Security Conroe All 50/ % x Final Average Salary plus $69 per month for YCS > 20 years prior to 12/31/2010 and $110 per month for YCS > 20 years earned after 12/31/2010 Highest 60 Month Average Salary ForwardDROP, 7 yr. max. employee contributions or interest credited. Yes Corpus Christi All 54/20 52% x Final Average Salary + $150 x YCS in excess of 20 Highest 60 Month Average Salary RetroDROP, 3 yr. max. Employee contributions credited, no interest. Corsicana All 50/20 53% x Final Average Salary (First 20 YCS) + $90/month x YCS > 20 Highest 60 Month Average Salary plus $90 per month for each year of service in excess of 20 years. RetroDROP, 3 yr. max. Employee contributions credited, no interest or COLA. Yes Denison All 50/20 Years of Credited Service x 2.65% x Final Average Salary Highest 24 Month Average Salary ne Denton All 50/20 Years of Credited Service x 2.59% x Final Average Salary Highest 36 Month Average Salary RetroDROP, 4 yr. max. Employee contributions credited, no interest or COLA. Galveston Tier 1 Hired before 1/1/ /20 Years of Credited Service x 3% x Final Average Salary Highest 60 Month Average Salary 0.6% compounded, not to exceed CPI U increase BackDROP, 3 yr. max. Employee contributions credited, no interest or COLA. Galveston Tier 2 Hired on/after 1/1/ /20 Years of Credited Service x 3% x Final Average Salary Highest 60 Month Average Salary ne BackDROP, 3 yr. max. Employee contributions credited, no interest or COLA. Greenville All 50/20 Years of Credited Service x 3.15% x Final Average Salary Highest 36 Month Average Salary BackDROP, 2 yr. max. Employee contributions credited, no interest. N/A 33

38 Benefit Summary Plans (Systems) Tier Eligible Members Eligibility Requirements (Age/YCS) Benefit Formula Final Average Salary Automatic COLA Retirement Benefit Options Social Security Harlingen All 50/ % x Final Average Salary plus a "longevity" benefit equal to $65 for each year of service in excess of 20 years. Highest 60 Month Average Salary DROP, 3 yr. max. Employee contributions credited, no interest. Or Reverse DROP a partial lump sum option of 24 months of benefit. Irving All 50/20 Years of Credited Service x 3.175% x Final Average Salary Highest Consecutive 78 Biweekly Pay Periods DROP, 9 yr. max. Interest credit: Actuarial valuation assumed return minus 2%. Employee contributions credited. Killeen All 55/20 or 50/25 (58.4% x Final Average Salary) + (2.275% x Final Average Salary for YCS>20) Highest 60 Month Average Salary RetroDROP, 2 yr. max. Employee contributions credited, no interest or COLA. Yes Laredo All 50/20 Years of Credited Service x 3.03% x Final Average Salary Highest 78 Biweekly Pay Period out of the Last 208 Biweekly Pay Periods RetroDROP, 2 yr. max. Employee contributions credited, no interest or COLA. Plan offers an increasing payment form option. Longview Tier 1 Members with >= 20 YCS as of 1/22/ /20 80% x Final Average Salary + $80.00 per month for YCS > 20 Highest 78 Biweekly Pay Periods Forward and ReverseDROP, 3 yr. max. Employee contributions credited, no interest. Longview Tier 2 Members with < 20 YCS as of 1/22/ /20 80% x Final Average Salary + $80.00 per month for YCS > 20 Highest 130 Biweekly Pay Periods Forward and ReverseDROP, 3 yr. max. Employee contributions credited, no interest. 34

39 Benefit Summary Plans (Systems) Tier Eligible Members Eligibility Requirements (Age/YCS) Benefit Formula Final Average Salary Automatic COLA Retirement Benefit Options Social Security Lubbock All 50/ % x Final Average Salary plus $335.05/month for each YCS over 20 Final 48 Month Average Salary RetroDROP, 2 yr. max. Employee contributions credited, no interest or COLA. Or Partial Lump Sum Option of up to 36 months of benefit. Lufkin Tier 1 Hired before 09/01/ /10 Years of Credited Service up to 20 years x 3.35% x Final Average Salary plus $66/month for each YCS over 20 Highest 60 Month Average Salary DROP (6 yr. max) and RetroDROP (3 yr. max). Employee contributions credited, no interest. Lufkin Tier 2 Hired on/after 09/01/2005 and before 6/25/ /15 Years of Credited Service up to 20 years x 3.35% x Final Average Salary plus $66/month for each YCS over 20 Highest 60 Month Average Salary DROP (6 yr. max) and RetroDROP (3 yr. max). Employee contributions credited, no interest. Lufkin Tier 3 Hired on/after 06/25/ /20 Years of Credited Service up to 20 years x 3.35% x Final Average Salary plus $66/month for each YCS over 20 Highest 60 Month Average Salary DROP (6 yr. max) and RetroDROP (3 yr. max). Employee contributions credited, no interest. Marshall All 50/10 Years of Credited Service up to 20 years x 3.125% x Final Average Salary plus $65/month for each YCS over 20 Last 36 Month Average Salary DROP, 3 yr. max. Employee contributions credited, no interest. N/A McAllen All 50/20 Years of Credited Service x 2.90% x Final Average Salary plus either 2.9% of FAS or $58/month for YCS 21 & 22 plus $58/month for each YCS over 22 Highest 60 Months BackDROP, 2 yr. max. Employee contributions credited, no interest or COLA. Yes 35