Bob Lyons on TRS finances.

TRS FY 2018 Cash Flow Summary Beginning Balance (July 1, 2017) in billions        $49.400

    State appropriation for FY 2018   4.164 

    Teacher/Employer contribution     1.036Total Contributions to TRS $5.200    

Total annuity benefits             ($6.555)            

Cost of running TRS                 .023

                                                                 TRS Total outflow                         ($6.578)

The part of our profit that makes up the difference                                                 1.378

The part of our profit that is left to be invested                                                   1.905

Ending balance (June 30, 2018) in billions                                                      $51.300

The state appropriation for FY 2019 is     $4.466                                            

Note that TRS needs to make in its investments almost $1.4 billion just to break even for the year.  And even with making more than 8% for the year, our unfunded liability grew in FY 2018.For 2018 the TRS fund made 8.45% net of fees, but because the cost of benefits exceeds our contributions by $1.383 billion our fund only grew by $1.9 billion or 4.2%.For FY 2018 the thirty-year net of fees return was 8.4% and the forty-year return was 9.2%.

Due to state underfunding last year, the TRS unfunded liability grew by 2.8% from $71.4 billion to $73.4 billion. TRS funded status is by my calculation 41.14%. It was 40.2% in FT 2017. 

Bob Lyons

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