Teachers Retirement System (TRS) held its biannual meeting May 11, 2022. The TRS net position in April 2022 was $92,898,480,066. The board heard a presentation of the FY 2021 actuarial report from actuarial firm Cavanaugh Macdonald. The board approved the maximum percentage increase for two-year average salary for FY 2023 and adopted the Employer and Employee contribution rates for FY 2024. Dr. L. C. "Buster" Evans presented a final legislative report, and the board elected its officers for next year. Dr. Deborah Simonds will serve as board chair, and Jason Branch will serve as vice-chair.
TRS net position in March 2021 $97,429,297,326
TRS net position in March 2022 $99,546,619,313
TRS net position in April 2021 $100,539,706,398
TRS net position in April 2022 $92,898,480,066
In April, there were 283,336 members in active status, 236,976 actively contributing, and 141,058 retirees.
Review of June 30, 2021 Actuarial Valuation Rates
Actuarial firm Cavanaugh Macdonald presented the TRS June 30, 2021 Actuarial Valuation. The following are general observations:
Market value investment return of 29.20% for FYE 2021
Recommend a decrease in the assumed annual rate of return on investments from 7.25% to 6.90%, and a decrease in the payroll growth assumption from 3.00% to 2.50%. Recommend modified asset smoothing method to increase the amount of the asset gain recognized this year by an amount such that the total unfunded actuarial accrued liability (UAAL) is the same as if no assumptions or methods had been changed. The remaining unrecognized asset gain will be spread equally over the four-year period following this valuation.
Recommend change to Board funding policy to define a new transitional UAAL amortization base as of June 30, 2021, and reduce the amortization period for this base to a period not to exceed 23 years and reduce the amortization period for future incremental UAAL bases from 30 years to 25 years.
Decrease in UAAL and increase in funded ratio from prior valuation primarily due to valuation asset growth more than expected
1.3% decrease in active membership, 0.1% decrease in payroll
Adoption of FY 2024 Employee and Employer Contribution Rates
Based on the Actuarial Valuation, the Board adopted FY 2024 contribution rates of:
6.00% for employees (capped at the statutory limits)
19.98% for employers
Adoption of Maximum Percentage Increase for Two-Year Average Salary for FY 2023
Georgia law limits the amount of salary increases that can be used to calculate retirement benefits for TRS members whose current date of membership is on or after July 1, 1984. For FY 2023 those numbers are:
Employees of the board of Regents 10.79%
All other employees 4.22%
For updates on legislation impacting TRS and legislation on all other issues affecting educators, please see the PAGE 2022 Legislative Session Summary.
The next TRS Board Meeting is scheduled for Wednesday, July 27, 2022.