EMPLOYEES RETIREMENT SYSTEM OF TEXAS
AUGUST 31, 2008
FOR THE FISCAL YEAR
ENDING AUGUST 31, 2008
AND THE PLAN YEAR
BEGINNING SEPTEMBER 1, 2008
November 12, 2008
Board of Trustees
Employees Retirement System of Texas
1801 Brazos St.
Austin, TX 78701
Members of the Board:
This report presents the results of the annual actuarial valuation of the Employees Retirement
System of Texas as of August 31, 2008, prepared in accordance with the Texas Government
Code. The valuation takes into account all of the promised benefits to which members are
entitled as of August 31, 2008, including pension and survivor benefits.
The valuation was based on the actuarial assumptions and methods as adopted by the Board of
Trustees, including a valuation interest rate of 8% per annum compounded annually. Projected
future salaries were adjusted to reflect legislated across-the-board salary increases. All other
actuarial cost methods and procedures are the same as the prior valuation.
The actuarial assumptions and methods comply with the parameters set forth in Governmental
Accounting Standards Nos. 25 and 27.
Assets and Membership Data
The Retirement System reported to the actuary the individual data for members of the System as
of the valuation date. While we did not verify the data at their source, we did perform tests for
internal consistency and reasonableness. The amount of assets in the trust fund taken into
account in the valuation was based on statements prepared for us by the Retirement System.
The actuary uses an actuarial cost method to determine the portion of the System’s liabilities
accrued by the members as of the valuation date and the portion that is attributable to future
years of service. The portion of the liabilities accrued as of August 31, 2008 — the accrued
liability — is equal to $25,403,279,942; while the actuarial value of the System’s assets equals