Teachers Retirement System of Georgia, comprehensive annual financial report, fiscal year ended June 30, 2010 [June 30, 2010]

TEACHERS RETIREMENT
SYSTEM OF GEORGIA
A COMPONENT UNIT OF THE STATE OF GEORGIA

65
years

Comprehensive

Annual

Financial

Report

2010 Fiscal Year
Ended June 30,

TEACHERS RETIREMENT
SYSTEM OF GEORGIA
A COMPONENT UNIT OF THE STATE OF GEORGIA
Comprehensive Annual
Financial Report
2010 Fiscal Year
Ended June 30,
Jeffrey L. Ezell Executive Director
65
years

Table of Contents

Introductory Section

Certificate of Achievement

1

Public Pension Standards Award

2

Board of Trustees

3

Letter of Transmittal

4

Your Retirement System

7

System Assets

8

Administrative Staff and Organization 9

Summary of Plan Provisions

10

Financial Section

Independent Auditors' Report

13

Management's Discussion & Analysis 14

Basic Financial Statements:

Statements of Plan Net Assets

18

Statements of Changes in

Plan Net Assets

19

Notes to Financial Statements

20

Required Supplementary Schedules:

Schedule of Funding Progress

30

Schedule of Employer Contributions 30

Notes to Required Supplementary

Schedules

31

Additional Information:

Schedule of Administrative

Expenses

32

Schedule of Investment Expenses 33

Investment Section

Investment Overview

34

Rates of Return

35

Asset Allocation

36

Schedule of Fees and Commissions

36

Investment Summary

36

Portfolio Detail Statistics

37

Actuarial Section

Actuary's Certification Letter

38

Summary of Actuarial Assumptions

and Methods

39

Actuarial Valuation Data

41

Statistical Section

Statistical Section Overview

44

Financial Trends

45

Operating Information

47

Certificate of Achievement

Introductory Section

1

Public Pension Standards Award

2

Introductory Section

Mr. J. Alvin Wilbanks** CHAIR
Administrator Appointed by the Governor
Term Expires 6/30/13

Board of Trustees
as of November 1, 2010*
Mr. Russell W. Hinton** VICE-CHAIR State Auditor Ex-Officio

Dr. Virginia J. Dixon** Retired Teacher
Elected by the Board of Trustees Term Expires 6/30/12

Dr. Lorelle C. "Buster" Evans** TRS Member
Appointed by the Governor Term Expires 6/30/12

Mr. Thomas D. Hills State Treasurer Ex-Officio

Mr. Charles D. Moseley** Citizen of the State
Appointed by the Governor Term Expires 6/30/11

Mr. Thomas W. Norwood** Investment Professional
Elected by the Board of Trustees Term Expires 6/30/11

Dr. Ralph E. Steuer TRS Member
Appointed by the Board of Regents Term Expires 6/30/12

*There are two vacancies on the Board. **Investment Committee Member

Introductory Section

3

Letter of Transmittal

Teachers Retirement System of Georgia
December 15, 2010 Board of Trustees Teachers Retirement System of Georgia Atlanta, Georgia
I am pleased to present the Comprehensive Annual Financial Report of the Teachers Retirement System of Georgia (the "System") for the fiscal year ended June 30, 2010. Responsibility for both the accuracy of the data, and completeness and fairness of the presentation, including all disclosures, rests with the management of the System. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the System. I trust that you will find this report helpful in understanding your retirement system.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Teachers Retirement System of Georgia for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009. This was the 22nd consecutive year that the System has achieved this prestigious award.
In order to be awarded a Certificate ofAchievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements,

Jeffrey L. Ezell Executive Director
and we are submitting it to the GFOA to determine its eligibility for another certificate.
History and Overview
The System was created in 1943, by an act of the Georgia General Assembly to provide retirement security to those individuals who choose to dedicate their lives to educating the children of the State of Georgia, and began operations in 1945. A summary of the System's benefits is provided on pages 10-12 of this report.
The System is the largest public pension fund in the State of Georgia, the 24th largest public pension fund in the United States and the 52nd largest pension fund in the world.
The System is governed by a ten-member Board of Trustees which appoints the Executive Director who is responsible for the administration and operations of the System, which serves more than 391,000 active and retired members, and 386 employers.
Legislation
The 2010 Georgia General Assembly amended Georgia law to mirror federal Internal Revenue Code regarding 401(a) pension plans. The legislation also amended the provisions for purchasing air time service only in conjunction with the member's application for retirement. If the retirement application is withdrawn or denied, the air time service purchase shall be void. Finally, technical corrections were made to ensure that age 60 is the age reported as the normal retirement age in all sections of TRS statutory language.

4

Introductory Section

Letter of Transmittal

Financial Information
The management of the System is charged with the responsibility of maintaining a sound system of internal accounting controls. The objectives of such a system are to provide management with reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations, and that they are recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Even though there are inherent limitations in any system of internal control, the management of the System makes every effort to ensure that through systematic reporting and internal reviews, errors or fraud would be quickly detected and corrected.
Please refer to Management's Discussion andAnalysis starting on page 14 of this report for an overview of the financial status of the System, including a summary of the System's Net Assets, Changes in Net Assets, and Asset Allocations.
INVESTMENTS -- The System has continued to invest in a mix of high quality bonds and stocks as it historically has done. These types of investments have allowed the System to participate in rising markets, while moderating the risks on the downside. New funds continue to be invested in high quality securities. A high quality balanced fund has proven to be a successful strategy in a variety of markets over a long period of time.
As in previous years, maintaining quality was a primary goal and was successfully met. "Conservation of Capital" and "Conservatism" continue to be the principal guides in investment decisions. The System continued to use a diversified portfolio to accomplish these objectives.
FUNDING -- The System's funding policy provides for employee and employer contributions at rates, expressed as a percentage of annual covered payroll, that are sufficient to provide resources to pay benefits when due.

Auseful indicator of the funded status of a retirement system is the relationship between the actuarial value of assets and the actuarial accrued liabilities. The System continues to remain strong as evidenced by the ratio of the actuarial value of assets to the actuarial accrued liabilities. This ratio was 87.2% for the fiscal year ended June 30, 2009. The ultimate test of the financial soundness of a retirement system is its ability to pay all promised benefits when due. I am proud to say that through the continued wisdom and the support of Governor Sonny Perdue and the Georgia General Assembly, the System has been and will continue to be funded on an actuarially sound basis, thus providing the membership the comfort and security they expect from their retirement system.
Initiatives
The System continuously looks for innovative ways to make the services it provides to its members faster, friendlier, and easier by a continued focus on providing excellent customer service throughout the System.
During the year, the System implemented a webbased retirement application process providing a more efficient, paperless and user-friendly way to retire which decreases processing time and increases member satisfaction. The online retirement application process became operational in January, 2010. Since that time, approximately 40% of the retirement applications have been submitted online resulting in a faster and easier retirement process for the member and also for the System's staff.
Anew web-based payment process was implemented for use by the employers to pay monthly contributions to the system. All employers are using this easier payment process.
Pre-retirement workshops have been introduced to the System's Atlanta office. These workshops provide members in the metro-Atlanta area with a convenient location and workshops are being held during school breaks and teacher workdays. Additionally, the Customer Excellence Program continues to grow by reaching its

Introductory Section

5

Letter of Transmittal

two-and-a-half-year goal of having at least one event in each of the 159 Georgia counties.
The disability retirement process was reengineered to provide a faster, easier, and more comprehensive disability retirement. This reengineering has resulted in a reduction in the time required to process and pay disability claims by more than 20% and a reduction in the number of temporary disability approvals by 65%.
The System continues to refresh and enhance the technology infrastructure supporting its line-of-business information systems. Doing so facilitated 99% uptime availability for these systems, permitted our employees to quickly respond to customer needs, and provided 24hour availability to the customer via the Internet through the System's customer web portal. The System continues its efforts to keep up with developing technologies and provide the best that these new technologies have to offer.
Other Information
INDEPENDENTAUDIT -- The Board of Trustees requires an annual audit of the financial statements of the System by independent, certified public accountants. The accounting firm of KPMG LLP was selected by the Board. The independent auditors' report on the statements of plan net assets and the related statements of changes in plan net assets is included in the Financial Section of this report.
ACKNOWLEDGMENTS -- The compilation of this report reflects the combined effort of the staff under the leadership of the Board of Trustees. It is intended to provide complete and reliable information as a basis for making management decisions, as a means of determining compliance with legal provisions, and as a means for determining responsible stewardship of the assets contributed by the System's members, their employers, and the State of Georgia.

Copies of this report can be obtained by contacting the System, or may be downloaded from the System's website.
I would like to take this opportunity to express my gratitude to Governor Sonny Perdue, members of the Georgia General Assembly, the staff, the advisors, and the many people who have worked so diligently to ensure the successful operation of the System. Sincerely,
Jeffrey L. Ezell Executive Director

6

Introductory Section

Your Retirement System

Financial Highlights
Member Contributions Employer Contributions Interest and Dividend Income Benefits Paid to Retired Members Member Withdrawals Interest Credited to Member Contributions
Statistical Highlights
Active Membership Members Leaving the System Retired Members Average Monthly Benefit

June 30,

2010

2009

$ 592,264,000 $ 1,057,416,000 $ 1,236,647,000 $ 2,800,424,000 $ 53,638,000

$ 567,635,000 $ 1,026,287,000 $ 1,401,719,000 $ 2,534,487,000 $ 49,414,000

% Change
+ 4.3 + 3.0 _ 11.8
+ 10.5 + 8.5

$ 253,031,000 $ 241,359,000

+ 4.8

222,046 6,944 87,017
$ 2,682

226,560 6,939 82,382
$ 2,620

_ 2_.0
+ 5.6 + 2.4

Introductory Section

7

System Assets

Total System Assets at June 30 (in thousands)

Equities Fixed Income Other(1)

2005 2006 2007

$27,121,761 $28,654,452 17,075,215 17,243,798 1,160,906 1,489,478

$32,928,370 17,115,170 3,249,443

2008
$29,530,826 19,801,442 1,287,660

Total System Assets

$45,357,882 $47,387,728 $53,292,983 $50,619,928

(1) Includes receivables, cash, short-term securities, and capital assets, net.

2009

2010

$23,733,154 17,944,548 1,175,665

$28,237,867 16,075,686 1,675,244

$42,853,367 $45,988,797

Growth of Total System Assets (in billions) Equities Fixed Income Other

$55

$45

$45.4

$47.4

$53.3

$50.6

$42.9

$46.0

$35

$25

$15

05

06

07 08

09 10

8

Introductory Section

Administrative Staff & Organization

Jeffrey L. Ezell Executive Director

Stephen J. Boyers Chief Financial Officer

Charles W. Cary, Jr. Chief Investment Officer
Investment Services

Diann F. Green Director
Retirement Services

Lisa M. Hajj Director
Communications

Dina N. Jones Director
Member Services

Gregory J. Rooks Controller
Financial Services

J. Gregory McQueen Director
Information Technology

Tonia T. Morris Director
Human Resources

Charles P. Warren Director
Employer Services and Contact Management

Consulting Services
Actuary Cavanaugh Macdonald
Consulting, LLC
Auditor KPMG LLP
Medical Advisors Gordon J. Azar, M.D. Atlanta, Georgia Arthur S. Booth, Jr., M.D. Atlanta, Georgia Joseph W. Stubbs, M.D. Albany, Georgia

Investment Advisors
Albritton Capital Management Barrow, Hanley, Mewhinney
& Strauss Cooke & Bieler Cramer Rosenthal McGlynn Fisher Investments Mesirow Financial Investment
Management Mondrian Investment Partners Limited Montag & Caldwell Munder Capital Management

PENN Capital Management Philadelphia International
Advisors RidgeWorth Capital Management Sands Capital Management

Introductory Section

9

Summary of Plan Provisions

Purpose
The Teachers Retirement System of Georgia (the "System") was established in 1943, by an act of the Georgia GeneralAssembly for the purpose of providing retirement allowances and other benefits for teachers of this state, and began operations in 1945. The System has the power and privileges of a corporation, and the right to bring and defend actions.
The major objectives of the System are (1) to pay monthly benefits due to retirees accurately and in a timely manner, (2) to soundly invest retirement funds to insure adequate financing for future benefits due and for other obligations of the System, (3) to accurately account for the status and contributions of all active and inactive members, (4) to provide statewide educational and counseling services for System members, and (5) to process refunds due terminated members.
Administration
State statutes provide that the administration of the System be vested in a ten-member Board of Trustees comprised as follows:
Ex-officio members:
the State Auditor,
the State Treasurer,
Governor's appointees:
two active members of the System who are classroom teachers and not employees of the Board of Regents,
one active member of the System who is a public school administrator,
one active member of the System who is not an employee of the Board of Regents,
one member to be selected by the Governor,
Board of Regents appointee:
one active member of the System who is an employee of the Board of Regents,
Trustee appointees:
one member who has retired under the System,
one individual who is a citizen of the state, not a member of the System and experienced in the investment of money.
A complete listing of the current Board of Trustees is included on page 3 of this report.

Management of the System is the responsibility of the Executive Director who is appointed by the Board and serves at its pleasure. On behalf of the Board, the Executive Director is responsible for the proper operation of the System, engaging such actuarial and other services as shall be necessary to transact business, and paying expenses necessary for operations.Alisting of the administrative staff is included on page 9 of this report.
Membership
All personnel in covered positions of the state's public school systems, technical colleges, RESA units and all colleges and universities comprising the University System of Georgia who are employed one-half time or more, except eligible faculty members electing to participate in the Board of Regents of the University System of Georgia Optional Retirement Plan, are required to be members of the System as a condition of employment.
Eligibility
Service Retirement
Active members may retire and elect to receive monthly retirement benefits after one of the following conditions: 1) completion of 10 years of creditable service and attainment of age 60, or 2) completion of 25 years of creditable service.
Disability Retirement
Members are eligible to apply for monthly retirement benefits under the disability provision of the law if they are an active member, have at least 10 years of creditable service, and are permanently disabled.

10

Introductory Section

The Formula
Normal Retirement
Any member who has at least 30 years of creditable service or who has at least 10 years of creditable service and has attained age 60 will receive a benefit calculated by using the percentage of salary formula. Simply stated, two percent (2%) is multiplied by the member's years of creditable service established with the System, including partial years (not to exceed 40 years). The product is then multiplied by the average monthly salary for the two highest consecutive membership years of service. The resulting product is the monthly retirement benefit under the maximum plan of retirement.
Early Retirement
Any member who has not reached the age of 60 and has between 25 and 30 years of creditable service will receive a reduced benefit. The benefit will be calculated using the percentage of salary formula explained above. It will then be reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or 7% for each year or fraction thereof the member has less than 30 years of creditable service. The resulting product is the monthly retirement benefit under the maximum plan of retirement.
Disability Retirement
Disability retirement benefits are also calculated using the percentage of salary formula explained above. The resulting product is the monthly disability retirement benefit under the maximum plan. There is no age requirement for disability retirement.
Plan A - Maximum Plan of Retirement
This plan produces the largest possible monthly benefit payable to the member only during his or her lifetime. There are no survivorship benefits under this plan.

Summary of Plan Provisions
Plan B - Optional Plans of Retirement
Upon retirement, a member of the System may elect one of six optional plans that provide survivorship benefits. The election of an optional form of payment is made upon application for retirement and it becomes irrevocable upon distribution of the first benefit check. The six options are as follows:
Option 1
The retiring member accepts a relatively small reduction from the maximum monthly benefit in order to guarantee to the estate, beneficiary or beneficiaries named on the retirement application, a lump-sum refund of any remaining portion of member contributions and interest.
Option 2
This plan offers the retiring member a reduced monthly benefit, based on the ages of the member and the beneficiary, payable for life. It further provides a guarantee to the surviving named beneficiary that, at the death of the retired member, the beneficiary will receive the same basic monthly retirement allowance the member received at the date of retirement plus any cost-of-living increases the member received up to the time of death.
Option 2 Pop-Up
Any member may elect a reduced retirement allowance to be designated "Option 2 Pop-Up" with the provision that if the beneficiary dies prior to the retiree that the basic benefit payable to the retiree shall increase to an amount the retiree would have received under Plan A - Maximum Plan.
Option 3
This plan of retirement offers a reduced monthly benefit that is based on the ages of the member and the beneficiary. The resulting benefit is paid to the retired member for life, with the guarantee to the surviving named beneficiary that at the time of the retired member's death, the beneficiary will receive a payment for life of one-half of the initial monthly benefit received by the member at the time of retirement plus one-half of any cost-of-living increases the member received up to the time of death.

Introductory Section

11

Summary of Plan Provisions
Option 3 Pop-Up
Any member may elect a reduced retirement allowance to be designated "Option 3 Pop-Up" with the provision that if the beneficiary dies prior to the retiree, the basic benefit payable to the retiree shall increase to the amount the retiree would have received under Plan A - Maximum Plan.
Option 4
This option offers a reduced monthly lifetime benefit in exchange for the flexibility to designate a specific dollar amount or percentage of your monthly benefit to be paid to your beneficiary after your death. The beneficiary benefits you specify under this plan cannot cause your monthly benefit to be reduced below 50% of the maximum benefit available to you. If multiple beneficiaries predecease you, the dollar amounts for the percentages are not adjusted. Beneficiaries also receive a prorated share of any cost-of-living increases you received up to the date of death.
Partial Lump-Sum Option Plan
TRS offers a Partial Lump-Sum Option Plan (PLOP) at retirement. In exchange for a permanently reduced lifetime benefit, a member may elect to receive a lump-sum distribution in addition to a monthly retirement benefit. The age of the member and plan of retirement are used to determine the reduction in the benefit.
A member is eligible to participate in the Partial Lump-Sum Option Plan if he or she meets the following criteria. A member must:
have 30 years of creditable service or 10 years of creditable service and attain age 60 (not early retirement).
not retire with disability benefits.
At retirement, a member may elect a lump-sum distribution in an amount between 1 and 36 months of his or her normal monthly retirement benefit. This amount will be calculated under Plan A - Maximum Plan of Retirement and will be rounded up and down to be a multiple of $1,000. If a PLOP distribution is

elected, the monthly benefit is actuarially reduced to reflect the value of the PLOP distribution. The combination of both the PLOP distribution and the reduced benefit are the same actuarial value as the unreduced normal benefit alone.
Financing the System
The funds to finance the System come from member contributions, 5.25% of annual salary; employer contributions, 9.74% of annual salary; and investment income.

12

Introductory Section

KPMG LLP Suite 2000 303 Peachtree Street, NE Atlanta, GA 30308 www.kpmg.com

Independent Auditors' Report

The Board of Trustees Teachers Retirement System of Georgia:

We have audited the accompanying statements of plan net assets of Teachers Retirement System of Georgia (the System), a component unit of the State of Georgia, as of June 30, 2010 and 2009, and the related statements of changes in plan net assets for the years then ended. These financial statements are the responsibility of the System's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the System's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial status of the System as of June 30, 2010 and 2009, and the changes in financial status for the years then ended in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated September 30, 2010 on our consideration of the System's internal control over financial reporting and on our tests of its

compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audits.
The management's discussion and analysis and the required supplementary schedules listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted principally of inquiries of management, regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The introductory section, schedules of administrative expenses and investment expenses, actuarial and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedules of administrative expenses and investment expenses have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects in relation to the basic financial statements taken as a whole. The introductory, investment, actuarial, and statistical sections have not been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, accordingly, we express no opinion on them.

December 15, 2010

Financial Section

13

Management's Discussion & Analysis

This section provides a discussion and analysis of the financial performance of the Teachers Retirement System of Georgia (the System) for the years ended June 30, 2010 and 2009. The discussion and analysis of the System's financial performance is within the context of the accompanying financial statements and disclosures following this section.
Financial Highlights
The following highlights are discussed in more detail later in this analysis.
At June 30, 2010, the System's assets exceeded its liabilities by $45.9 billion (reported as net assets) as compared to the net assets of $42.5 billion at June 30, 2009, representing an increase of $3.4 billion. At June 30, 2009, the System's assets exceeded its liabilities by $42.5 billion (reported as net assets) as compared to the net assets of $50.1 billion at June 30, 2008, representing a decrease of $7.6 billion.
Contributions from members increased by $24.6 million or 4.3% from $567.6 million in 2009 to $592.2 million in 2010. Contributions by employers increased by $31.1 million or 3.0% from $1.03 billion in 2009 to $1.06 billion in 2010. Contributions from members increased by $13.6 million or 2.5% from $554.0 million in 2008 to $567.6 million in 2009. Contributions by employers increased by $39.5 million or 4.0% from $986.8 million in 2008 to $1.03 billion in 2009. The increases in 2010 are due to a contribution rate increase which offset a decrease in the number of active members during the fiscal year. The increases in 2009 are due to increases in membership and higher average payrolls during the fiscal year.
Pension benefits paid to retirees and beneficiaries for the years ended June 30, 2010 and 2009 were $2.8 billion and $2.5 billion, representing an increase of 10.5% and a decrease of 8.1%, respectively. This is due to increases in the number of retirees and beneficiaries receiving benefit payments and postretirement benefit adjustments in both years, and a reduction of the liability involving retroactive benefit payments in 2009.
Overview of the Financial Statements
The basic financial statements include (1) the statements of plan net assets, (2) the statements of changes in plan net assets, and (3) notes to the financial statements. The System also includes in this report additional information to supplement the financial statements.

The System prepares its financial statements on an accrual basis in accordance with U.S. generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. These statements provide information about the System's overall financial status.
In addition, the System presents two required supplementary schedules, which provide historical trend information about the plan's funding. The two schedules include (1) a schedule of funding progress and (2) a schedule of employer contributions.
Statements of Plan Net Assets
The Statement of Plan Net Assets is the statement of financial position, presenting information that includes all of the System's assets and liabilities, with the balance reported as and representing the Net Assets Held in Trust for Pension Benefits. The investments of the System in this statement are presented at fair value. These statements are presented on page 18.
Statements of Changes in Plan Net Assets
The Statement of Changes in Plan Net Assets reports how the System's net assets changed during the fiscal year. The additions and the deductions to net assets are summarized in this statement. The additions include contributions and investment income (loss), which includes the net increase (decrease) in the fair value of investments. The deductions include benefit payments, refunds of member contributions, and administrative expenses. These statements are presented on page 19.
Notes to the Financial Statements
The accompanying notes to the financial statements provide information essential to a full understanding of the System's financial statements. The notes to the financial statements begin on page 20 of this report.
Required Supplementary Schedules
A brief explanation of the two required schedules found beginning on page 30 of this report follows:
Schedule of Funding Progress This schedule includes historical trend information for the last six consecutive fiscal years about the actuarially funded status of the plan from a long-term, ongoing plan perspective, and the progress made in accumulating sufficient assets to pay benefits when due.
Schedule of Employer Contributions This schedule presents historical trend information for the last six consecutive fiscal years about the annual required contributions of employers and the contributions made by employers in relation to the requirement.

14

Financial Section

Management's Discussion & Analysis

Financial Analysis of the System
A summary of the System's net assets at June 30, 2010, 2009, and 2008 is as follows (dollars in thousands):

Net Assets June 30


2010

2009

Amount Percentage Amount Percentage

Assets:

2010

2009

2008

Change Change Change Change

Cash and Receivables $ 351,416 $ 486,723 $ 414,867 $ (135,307) (27.8)% $ 71,856

17.3 %

Investments

45,633,578 42,362,621 50,197,679 3,270,957

7.7 % (7,835,058) (15.6)%

Capital Assets, net

3,803

4,023

7,382

(220) (5.5)%

(3,359) (45.5) %

Total Assets

45,988,797 42,853,367 50,619,928 3,135,430

7.3 % (7,766,561) (15.3)%

Liabilities:

Due to Brokers and

Accounts Payable

63,248

374,784

556,328

(311,536 )

Net Assets

$ 45,925,549 $ 42,478,583 $ 50,063,600 $ 3,446,966

(83.1)% (181.,544) 8.1 % $ (7,585,017)

(32.6) % (15.2) %

The $3.4 billion increase in net assets in 2010 is principally related to the increase in the bond and equities markets. The $7.6 billion decrease in net assets in 2009 was principally related to the declining equities market in 2009. The changes in investments are analyzed in the table below.

The following table presents the investment allocation at June 30, 2010, 2009, and 2008:

Asset Allocation at June 30 (in percentages)
Equities Domestic Obligations:
U.S. Treasuries U.S. Agencies Corporate and Other Bonds International Obligations: Governments Corporates Short-term
Asset Allocation at June 30 (in thousands)

2010
61.9 %
20.9 % 1.8 % 10.3 %
1.5 % 0.7 % 2.9 %

2009
56.0 % 24.8 % 2.0 % 15.6 %
1.6 %

Equities Domestic Obligations:
U.S. Treasuries U.S. Agencies Corporate and Other Bonds International Obligations: Governments Corporates
Short-term

$ 28,237,867
9,553,851 826,903
4,675,613
701,546 317,773 1,320,025 $ 45,633,578

$ 23,733,154 10,498,068 857,482 6,588,998
684,919 $ 42,362,621

2008
58.8% 27.3% 4.4% 7.8%
1.7%
$ 29,530,826 13,678,959 2,211,341 3,911,142
865,411 $ 50,197,679

Financial Section

15

Management's Discussion & Analysis

Financial Analysis of the System continued
The total investment portfolio at June 30, 2010 increased $3.3 billion from June 30, 2009, which is primarily due to the increase in the bond and equities markets in 2010.
The total investment portfolio at June 30, 2009 decreased $7.8 billion from June 30, 2008, which is primarily due to the declining equities markets in 2009.
The investment rate of return in fiscal year 2010 was 11.1%, with a 13.8% return for equities and an 8.7% return for fixed income compared to an investment rate of return in fiscal year 2009 of (13.1)%, with a (27.4)% return for equities and a 7.5% return for fixed income. The five year annualized rate of re-

turn on investments at June 30, 2010 was 2.6% with a (0.3)% return on equities and a 5.9% return on fixed income.
The investment rate of return in fiscal year 2009 was (13.1)%, with a (27.4)% return for equities and a 7.5% return for fixed income compared to an investment rate of return in fiscal year 2008 of (3.4)%, with a (10.8)% return for equities and a 9.7% return for fixed income. The five year annualized rate of return on investments at June 30, 2009 was 1.9% with a (1.3)% return on equities and a 5.6% return on fixed income.

A summary of the changes in the System's net assets for the years ended June 30, 2010, 2009, and 2008 is as follows (dollars in thousands):

2010

2009

Chang es i n Net Asset s A mount Perc entage Amount Percentage



2010

2009

2008

Change Change Change Change

A dditions:

Member Contributions $ 592,264 $ 567,635 $ 554,027 $ 24,629

4.3 % $ 13,608

2.5 %

Employer Contributions 1,057,416 1,026,287

986,759

31,129 3.0 %

39,528 4.0 %

Net Investment Income (Loss)

4,671,571 (6,572,435) (1,775,578) 11,244,006 (171.1) % (4,796,857) 270.2 %

Total Additions 6,321,251 (4,978,513) (234,792) 11 ,299,764 (227.0)% (4,743,7 21) 2,020 .4 %

Deductions:
Benefit Payments Refunds Administrative Expenses
Total Deductions

2,800,424 53,638 20,223
2,874,285



2,534,487 2,756,483 265,937 10.5 % (221,996) (8.1)%

49,414

54,482

4,224

8.5 %

(5,068) (9.3)%

22,603

23,744

(2,380) (10.5)%

(1,141) (4.8)%

2,606,504 2,834,709

267,781 10.3 % (228,205) (8.1)%

Net Increase (Decrease) in Plan Net Assets $ 3,446,966 $(7,585,017) $(3,069 ,501) $11, 031,983 (145.4)% $(4,515,516)

147.1 %

16

Financial Section

Management's Discussion & Analysis

Additions
The System accumulates resources needed to fund benefits through contributions and returns on invested funds. Member contributions increased 4.3% in 2010 primarily because of an increase in the employee contribution rate to 5.25% from 5.00% in 2009. This rate increase offset a decrease in the number of active members during the fiscal year. Member contributions increased 2.5% in 2009 primarily because of increased membership and a higher average payroll. Employer contributions increased 3.0% in 2010 as a result of an increase in the employer contribution rate to 9.74% from 9.28% in 2009. This rate increase offset a decrease in the number of active members during the fiscal year. Employer contributions increased 4.0% in 2009 primarily because of increased membership and a higher average payroll. Contribution rates are recommended by the actuary and approved by the System's Board of Trustees. The net investment income (loss) is a result of the 2010 increase in the bond and equities markets and the 2009 decline in the equities markets.
Deductions
Deductions increased 10.3% in 2010 and decreased 8.1% in 2009, primarily because of the 10.5% increase and 8.1% decrease, respectively, in benefit payments. Regular pension benefit payments increased both years due to an increase in the number of retirees and beneficiaries receiving benefit payments to 87,017 in 2010 from 82,382 in 2009 and 78,633 in 2008 and postretirement benefit increases in both years. The overall decrease in 2009 was attributable to recording a reduction of $56.0 million in the liability for retroactive benefit payments compared to the recording of the liability of $377.3 million in 2008.
Funding Status
The schedule of funding progress and schedule of employer contributions provide information regarding how the plan is performing and funded from an actuarial perspective. The information is based upon actuarial valuations conducted by certified actuaries. The funding ratio, which is presented on the schedule of funding progress, indicates the ratio between the actuarial value of assets and the actuarial accrued liabilities. The higher this ratio, the better funded the System is from an actuarial perspective.
The June 30, 2009 actuarial valuation, which is the latest valuation available, indicates that the actuarial value of assets was $54.8 billion and that the actu-

arial accrued liability was $62.9 billion. This results in a funding ratio of 87.2%. The June 30, 2008 actuarial valuation indicates that the actuarial value of assets was $54.4 billion and that the actuarial accrued liability was $59.1 billion. This results in a funding ratio of 91.9%.
The System is using a "smoothed valuation interest rate" methodology for the June 30, 2009 valuation to calculate the annual required contributions. The method determines the interest rate needed over a defined look-forward period, so that the ultimate investment rate of return is earned over a defined time horizon, based on the actual rates of return for a defined look back period. It incorporates a long-term time horizon of 30 years and a 7 year look-back period which equals the System's asset smoothing period.
The ultimate investment rate of return is the long term rate of return that the System expects to earn based on its long term capital market assumptions and asset allocations. The smoothed interest rate is used to determine the annual required contributions. The ultimate investment rate of return is used in determining the smoothed valuation interest rate.
When the actual returns during the look-back period are higher than the ultimate investment rate of return, the smoothed valuation interest rate is lower than the ultimate discount rate and contributions increase. The required contribution increase follows a period of better than expected returns and is a better time to fund these increases as opposed to following a period of worse than expected returns. If the actual returns during the look-back period are lower than the ultimate investment rate of return, the smoothed valuation interest rate will be higher than the ultimate investment rate of return, resulting in decreased contribution rates.
Management believes the System continues to be in a solid financial position, as evidenced by the funding ratio and the fact that the employer has always contributed 100% of the annual required contributions.
Requests for Information
This financial report is designed to provide a general overview of the System's finances for all those with interest in the System's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Teachers Retirement System of Georgia, Two Northside 75, Suite 100, Atlanta, GA 30318.

Financial Section

17

Statements of Plan Net Assets
June 30, 2010 and 2009 (in thousands)

Assets
Cash

Receivables:

Interest and Dividends

Due from Brokers for Securities Sold Member and Employer Contributions

Other



Total Receivables

Investments - at fair value:
Short-Term Domestic Obligations:
U.S. Treasuries U.S. Agencies Corporate and Other Bonds International Obligations: Governments Corporates Common Stocks



Total Investments

Capital Assets, net



Total Assets

Liabilities
Due to Brokers for Securities Purchased
Accounts Payable and Other



Total Liabilities

Net Assets Held in Trust for Pension Benefits

See accompanying notes to financial statements.

2010
$ 8,372

2009
$ 4,437

172,785 44,937 124,647
675 343,044

194,590 159,159 127,664
873 482,286

1,320,025
9,553,851 826,903
4,675,613
701,546 317,773 28,237,867
45,633,578
3,803
45,988,797

684,919
10,498,068 857,482
6,588,998
-- -- 23,733,154
42,362,621
4,023
42,853,367

57,886 5,362
63,248

97,566 277,218
374,784

$ 45,925,549

$ 42,478,583

18

Financial Section

Statements of Changes in Plan Net Assets
Years ended June 30, 2010 and 2009 (in thousands)

Net Assets Held in Trust for Pension Benefits - Beginning of year

2010
$ 42,478,583

Additions:

Contributions: Employer Member

Investment Income (Loss): Net Increase (Decrease) in Fair Value of Investments Interest, Dividends, and Other



Total

Less Investment Expense

1,057,416 592,264
3,457,353 1,236,647 64,565934,506040
22,429



Net Investment Income (Loss) Total Additions

Deductions:

Benefit Payments
Refunds of Member Contributions
Administrative Expenses, net



Total Deductions

4,671,571 6,321,251
2,800,424 53,638 20,223
2,874,285



Net Increase (Decrease)

Net Assets Held in Trust for Pension Benefits - End of Year

3,446,966 $ 45,925,549

2009
$ 50,063,600
1,026,287 567,635
( 7,955,283) 1,401,719 (61,575436,506349)
18,871 ( 6,572,435) (4,978,513)
2,534,487 49,414 22,603
2,606,504 (7,585,017)
$ 42,478,583

See accompanying notes to financial statements.

Financial Section

19

Notes to Financial Statements
June 30, 2010 and 2009

A. Plan Description
Teachers Retirement System of Georgia (the System) was created in 1943 by an act of the Georgia Legislature (the Act) to provide retirement benefits for teachers who qualify under the Act. The System is administered as a cost sharing, multiple employer plan as defined in Governmental Accounting Standards Board (GASB) Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans. On October 25, 1996, the Board of Trustees created the Supplemental Retirement Benefit Plan of the Georgia Teachers (SRBP). SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC 415) as a portion of the System. The purpose of SRBP is to provide retirement benefits to employees covered by the System whose benefits are otherwise limited by IRC 415. Although the System is a component unit of the state of Georgia's financial reporting entity, it is accountable for its own fiscal matters and presentation of its separate financial statements. A Board of Trustees comprised of two appointees by the Board, two ex officio state employees, five appointees by the Governor, and one appointee of the Board of Regents is ultimately responsible for the administration of the System.
In evaluating how to define the System for financial reporting purposes, the management of the System has considered all potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth by GASB Statement No. 14, The Financial Reporting Entity. The concept underlying the definition of the reporting entity is that elected officials are accountable. The decision to include a potential component unit in the reporting entity is also made by applying specific criteria as outlined in GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, including consideration of the nature and significance of the relationship of potential component units. Based on those criteria, the System has not included any other entities in its reporting entity.

Eligibility and Membership
All teachers in the state public schools, the University System of Georgia (except those professors and principal administrators electing to participate in an optional retirement plan), and certain other designated employees in educational-related work are eligible for membership.

As of June 30, 2010, participation in the System is as follows:

Retirees and beneficiaries currently receiving benefits
Terminated employees entitled to benefits but not yet receiving benefits

87,017 82,163

Active plan members

222,046



Total

Employers

391,226 386

As of June 30, 2009, participation in the System was as follows:

Retirees and beneficiaries currently receiving benefits
Terminated employees entitled to benefits but not yet receiving benefits

82,382 77,968

Active plan members

226,560



Total

Employers

386,910 392

Retirement Benefits
The System provides service retirement, disability retirement, and survivor's benefits. Title 47 of the Official Code of Georgia assigns the authority to establish and amend the provisions of the System to the State Legislature. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.

20

Financial Section

A. Plan Description continued
Retirement Benefits
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60, or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-ofliving adjustments, based on the Consumer Price Index, may be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Options are available for distribution of the member's monthly pension, at a reduced rate, to a designated beneficiary on the member's death.
Death and Disability Benefits
Retirement benefits also include death and disability benefits, whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on the member's creditable service (minimum of ten years of service) and compensation up to the time of disability.
The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of ten years of service) and compensation up to the date of death.
Contributions
The System is funded by member and employer contributions as adopted and amended by the Board of Trustees.

Notes to Financial Statements
June 30, 2010 and 2009

Contributions required for fiscal year 2010 were based on the June 30, 2007 actuarial valuation as follows:

Member:

Employer: Normal Unfunded accrued liability



Total

5.25 %
7.96 % 1.78 % 9.74 %

Contributions required for fiscal year 2009 were based on the June 30, 2006 actuarial valuation as follows:

Member:

Employer: Normal
Unfunded accrued liability



Total

5.00 %
8.15 % 1.13 % 9.28 %

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions with accumulated interest are reported as net assets held in trust for pension benefits.
SRBP
Beginning July 1, 1997, all members and retired former members in the System are eligible to participate in this plan whenever their benefits under the System exceed the limitation on benefits imposed by IRC 415. As of June 30, 2010 and 2009, there were 24 and 27 members, respectively, eligible to participate in this portion of the System. Employer contributions of $375,000 and $414,000 and retirement payments of $367,000 and $417,000 under the SRBP are included in the statements of changes in plan net assets for the years ended June 30, 2010 and 2009, respectively.

Financial Section

21

Notes to Financial Statements
June 30, 2010 and 2009
B. Summary of Significant Accounting Policies and Plan Asset Matters
Basis of Accounting
The System's financial statements are prepared on the accrual basis of accounting. Contributions from the employers and the members are recognized as additions when due, pursuant to formal commitments, as well as statutory or contractual requirements. Retirement and refund payments are recognized as deductions when due and payable.
During fiscal year 2010, the system adopted the provisions of GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. The objective of this Statement is to establish authoritative guidance for the consistent reporting of intangible assets by governmental entities. There were no intangible assets required to be reported by the System as a result of the implementation of this statement.
Investments
Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price. There are no investments in, loans to, or leases with parties related to the System.
The System utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Capital Assets
Capital assets are stated at cost less accumulated depreciation. Capital assets costing $5,000 or more are capitalized. Depreciation on capital assets is computed using the straight line method over estimated useful lives of three to forty years. Depreciation expense is included in administrative expenses, net. Maintenance and repairs are charged to administrative expenses when incurred. When assets are retired or otherwise disposed of, the costs and related accumu-

lated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the statements of changes in plan net assets in the period of disposal.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of plan net assets and changes therein. Actual results could differ from those estimates.
C. Investment Program
The System maintains sufficient cash to meet its immediate liquidity needs. Cash not immediately needed is invested in either short term or long term investment securities as directed by the Board of Trustees. All investments are held by agent custodial banks in the name of the System.
Cash
Cash balances are fully insured through the Federal Deposit Insurance Corporation, an agency of the U.S. Government. Fiduciary accounts, such as those of the System, are granted $250,000 of insurance coverage per participant in the System. Temporary cash on hand not committed for a specific purpose is invested overnight.
Investments
State statutes and the System's investment policy authorize the System to invest in a variety of short term and long term securities as follows:
a) Short-Term
Short-term investments are authorized in the following instruments:
Repurchase and reverse repurchase agreements, whereby the System and a broker exchange cash for direct obligations of the U.S. Government or obligations unconditionally guaranteed by agencies of the U.S. Government or U.S. corporations. The System or broker promises to repay the cash received plus interest at a specific date in the future in exchange for the same securities. The System held

22

Financial Section

C. Investment Program continued
repurchase agreements of $1,320,025,000 and $684,919,000 at June 30, 2010 and 2009, respectively.
U.S. Treasury obligations.
Other short-term securities authorized, but not currently used, are:
Commercial paper, with a maturity of 180 days or less. Commercial paper is an unsecured promissory note issued primarily by corporations for a specific amount and maturing on a specific day. The System considers for investment only commercial paper of the highest quality, rated P-1 and/or A-1 by national credit rating agencies.
Master notes, an overnight security administered by a custodian bank, and an obligation of a corporation whose commercial paper is rated P-1 and/or A-1 by national credit rating agencies.
Investments in commercial paper or master notes are limited to no more than $500 million in any one name.
b) Long-Term
Fixed income investments are authorized in the following instruments:
U.S. and foreign government obligations. At June 30, 2010, the System held U.S. Treasury bonds of $9,553,850,620 and international government bonds of $701,546,360. At June 30, 2009, the System held U.S. Treasury bonds of $10,498,068,170.
Obligations unconditionally guaranteed by agencies of the U.S. Government. At June 30, 2010, the System held agency bonds of $826,902,990. At June 30, 2009, the System held agency bonds of $857,482,100.
Corporate bonds with at least an "A" rating by a national rating agency. At June 30, 2010, the System held U.S. corporate bonds of $4,675,612,500 and international corporate bonds of $317,773,250. At June 30, 2009, the System held U.S. corporate bonds of $6,588,997,880.

Notes to Financial Statements
June 30, 2010 and 2009
Private placements are authorized under the same general restrictions applicable to corporate bonds.
Mortgage investments are authorized to the extent that they are secured by first mortgages on improved real property located in the state of Georgia.
Equity securities are also authorized (in statutes) for investment as a complement to the System's fixed-income portfolio and as a long term inflation hedge. By statute, no more than 65% of the total invested assets on a historical cost basis may be placed in equities. Equity holdings in any one corporation may not exceed 5% of the outstanding equity of the issuing corporation. The equity portfolio is managed by the Division of Investment Services (the Division) in conjunction with independent advisors. Buy/sell decisions are based on securities meeting rating criteria established by the Board of Trustees; in house research considering such matters as yield, growth, and sales statistics; and analysis of independent market research. Equity trades are approved and executed by the Division's staff. Common stocks eligible for investment are approved by the Investment Committee of the Board of Trustees before being placed on an approved list.

Financial Section

23

Notes to Financial Statements
June 30, 2010 and 2009

Quality Ratings of Fixed Income Investments Held at June 30, 2010 and 2009

Investment type Domestic Obligations:
U.S. Treasuries U.S. Agencies Corporates
Total Corporates International Obligations:
Governments
Total Governments Corporates
Total Fixed Income Investments

Standard and Poor's/Moody quality rating
AAA/Aaa AAA/Aaa AAA/Aa AA/Aa AA/A A/A
AAA/Aaa AA/Aa
AA/Aaa

June 30, 2010 fair value
$ 9,553,850,620 826,902,990 228,873,12_0_
3,039,068,650 1,013,025,930
394,644,800 4,675,612,500
340,661,880 360,884,480 701,546,360 317,773,250
$ 16,075,685,720

June 30, 2009 fair value
$ 10,498,068,170 857,482,100 740,841,400 828,492,500
4,187,875,690 461,279,420 370,508,870
6,588,997,880
__ __ __ __
$ 17,944,548,150

C. Investment Program continued
C redit R isk: Credi t risk is the risk that an issuer or other counter-party to an investment will not fulfill its obligations to the System. State law limits investments to investment grade securities. It is the System's investment policy to require that the bond portfolio be of high quality and chosen with respect to maturity ranges, coupon levels, refunding characteristics, and marketability. The System's policy is to require that new purchases of bonds be restricted to high grade bonds rated no lower than "A" by any nationally recognized statistical rating organization. The quality ratings of investments in fixed income securities as described by Standard & Poor's and by Moody's Investor Services, which are nationally recognized statistical rating organizations, at June 30, 2010, and 2009, are shown in the chart above.
The investment policy requires that repurchase agreements be limited to the purchase of U.S. Treasury or Agency obligations or corporate bonds rated no lower than "A" by any nationally recognized statistical rating organization, with a market value in excess of funds advanced. The System held repurchase agreements of $1,320,025,000, as of June 30, 2010 and $684,919,000, as of June 30, 2009.

Concentration of Credit Risk: Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issue. On June 30, 2010 and 2009, the System did not have debt or equity investments in any one organization, other than those issued or guaranteed by the U.S. Government or its agencies, which represented greater than 5% of plan net assets.
Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. While the System has no formal interest rate risk policy, active management of the bond portfolio incorporates interest rate risk to generate improved returns. This risk is managed within the portfolio using the effective duration method. This method is widely used in the management of fixed income portfolios and quantifies to a much greater degree the sensitivity to interest rate changes when analyzing a bond portfolio with call options, prepayment provisions, and any other cash flows. Effective duration makes assumptions regarding the most likely timing and amounts of variable cash flows and is best utilized to gauge the effect of a change in interest rates on the fair value of a portfolio. It is believed that the reporting of effective duration found in the table below quantifies to the fullest extent possible the interest rate risk of the System's fixed income assets.

24

Financial Section

Notes to Financial Statements
June 30, 2010 and 2009

Effective Duration of Fixed Income Assets and Repurchase Agreements

by Security Type


Percent of all



fixed income assets Effective

Fixed income and repurchase

Market value,

and repurchase

duration

agreements security type

June 30, 2010

agreements

(years)

Domestic Obligations:

U.S. Treasuries

$ 9,553,850,620

54.9 %

6.0

U.S. Agencies

826,902,990

4.8 %

2.1

Corporates

4,675,612,500

26.9 %

4.3

International Obligations:

Governments

701,546,360

4.0 %

4.3

Corporates Repurchase Agreements

317,773,250 1,320,025,000

1.8 %

3.0

7.6 %

__

Total

$ 17,395,710,720

100.0 %

4.8*

*Total effective duration (years) does not include repurchase agreements.





Fixed income and repurchase

Market value,

agreements security type

June 30, 2009

Percent of all fixed income assets
and repurchase agreements

Effective duration (years)

Domestic Obligations:

U.S. Treasuries

$ 10,498,068,170

56.3 %

5.2

U.S. Agencies

857,482,100

4.6 %

3.2

Corporates

6,588,997,880

35.4 %

4.4

Repurchase Agreements

684,919,000

3.7 %

Total

$ 18,629,467,150

100.0 %

4.8*

*Total effective duration (years) does not include repurchase agreements.

D. Investments Lending Program
State statutes and Board of Trustees' policies permit the System to lend its securities to broker/dealers with a simultaneous agreement to return the collateral for the same securities in the future. The System is presently involved in a securities lending program with major brokerage firms. The System lends equity and fixed income securities for varying terms and receives a fee based on the loaned securities' value. During a loan, the System continues to receive dividends and interest as the owner of the loaned securities. The brokerage firms pledge collateral securities consisting of U.S. Government and agency securities, mortgage backed securities issued by a U.S. Government agency, and corporate bonds. The collateral value must be equal to at least 102% to 115% of the loaned securities' value, depending on the type of collateral security.
Securities loaned totaled $12,404,923,467 and $12,006,046,251 at June 30, 2010 and 2009, respectively. The collateral value was equal to 105.7% of

the loaned securities' value at June 30, 2010 and 2009. The System's lending collateral was held in the System's name by the tri-party custodian.
Loaned securities are included in the accompanying statements of plan net assets since the System maintains ownership. The related collateral securities are not recorded as assets on the System's statements of plan net assets, and a corresponding liability is not recorded, since the System is deemed not to have the ability to pledge or trade the collateral securities. In accordance with the criteria set forth in GASB Statement No. 28, Accounting and Financial Reporting for Securities Lending Transactions, the System is deemed not to have the ability to pledge or sell collateral securities, since the System's lending contracts do not address whether the lender can pledge or sell the collateral securities without a borrower default, the System has not previously demonstrated that ability, and there are no indications of the System's ability to pledge or sell the collateral securities.

Financial Section

25

Notes to Financial Statements
June 30, 2010 and 2009

E. Capital Assets
The following is a summary of capital assets and depreciation information as of June 30 and for the years then ended:

Capital Assets:
Land Building Furniture and Fixtures Computer Equipment Computer Software
Accumulated Depreciation For:
Building Furniture and Fixtures Computer Equipment Computer Software
Capital Assets, Net

Balance at

June 30, 2009

Additions Disposals

$ 944,225 2,800,000 437,522 1,378,932 14,979,713 20,540,392

$

--

--

--

123,343

--

123,343

$-- --__
(74,5_1_4)
(74,514)

(350,000)

(70,000)

(326,917)

(32,555)

(861,154)

(230,731)

(14,979,713)

(16,517,784)

(333,286)

$ 4,022,608

$ (209,943)

-- __ 64,949 -- 64,949
$ (9,565)

Balance at June 30, 2010
$ 944,225 2,800,000 437,522 1,427,761 14,979,713 20,589,221
(420,000) (359,472) (1,026,936) (14,979,713) (16,786,121)
$ 3,803,100

26

Financial Section

Notes to Financial Statements
June 30, 2010 and 2009

E. Capital Assets continued

Balance at

Capital Assets:

June 30, 2008

Additions Disposals

Land

$ 944,225

$

--

$

--

Building 2,800,000 --

--

Furniture and Fixtures

437,522

--

--

Computer Equipment 1,371,959

6,973

--

Computer Software 14,979,713

--

--

20,533,419 6,973 --

Accumulated Depreciation For:

Building

(280,000)

(70,000)

--

Furniture and Fixtures Computer Equipment

(289,980)

(36,937)

__

(597,609)

(263,545)

__

Computer Software

(11,983,772)

(2,995,941)

--

(13,151,361)

(3,366,423)

__

Capital Assets, Net $ 7,382,058

$ (3,359,450)

$

__

Balance at June 30, 2009
$ 944,225 2,800,000 437,522 1,378,932 14,979,713 20,540,392
(350,000) (326,917) (861,154) (14,979,713) (16,517,784) $ 4,022,608

During fiscal years 2010 and 2009, the System did not experience any capital asset impairment loss with respect to the provisions of GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries.

Financial Section

27

Notes to Financial Statements
June 30, 2010 and 2009
F. Administrative Expenses
Administrative expenses are reported in the financial statements; however, the actual accounting for the expenses is performed in a separate expense fund. Administrative expenses paid out of System earnings are as follows:

H. Subsequent Event
On July 21, 2010, the System adopted a "smoothed valuation interest rate" methodology for the June 30, 2009 actuarial valuation to calculate the annual required contributions. The contributions affected are for the fiscal year ended June 30, 2012.

2010

2009

Salaries and Employee Benefits $ 21,512,669 $ 20,438,788

Other Operating Expenses 3,862,9 81 7,134,849

Total Administrative Expenses 25,375,650 27,573,637

Less Reimbursement by Other State Retirement Systems for Services Rendered on Their Behalf 5,153,13 8 4,970,478
Net Administrative Expenses $ 20,222,512 $ 22,603,159

G. Commitments and Contingencies
In April, 2004, two retirees filed a civil action in Fulton County Superior Court (the Court) seeking additional benefits retroactive to the time of their retirement dates for a class of those retirees who elected survivorship options and who retired during the preceding 20 year period. Plaintiffs alleged that the System did not use updated mortality tables in the calculation of their benefits. The Court ruled on February 29, 2008 for the plaintiffs using a 20-year statute of limitations. On February 19, 2009, the Court of Appeals of the State of Georgia awarded the 20-year member class retroactive payments back to April 4, 1998, applying a 6-year statute of limitations. On May 18, 2009, the Court entered an Order of Final Approval of the award. There are no further appeals and this ruling is the final judgment.
At June 30, 2010, there is no remaining liability related to this action. At June 30, 2009, management estimated a liability of approximately $272.3 million based on the final ruling and estimated final payments. This amount is recorded in accounts payable and other liabilities in the accompanying statements of plan net assets as of June 30, 2009.

28

Financial Section

Notes to Financial Statements
June 30, 2010 and 2009
I. Funded Status and Funding Progress
The funded status of the plan as of June 30, 2009, the most recent actuarial valuation date, is as follows (dollars in thousands):

Actuarial Value of Plan
Assets (a)
$ 54,818,373

Actuarial Accrued

Liability

Unfunded

(AAL) -

AAL (UAAL)

Entry Age (Funding Excess)

(b)

(b-a)

$ 62,870,138

$ 8,051,765

Funding Ratio (a/b)
87.2%

Annual Covered Payroll
(c)

UAAL as a Percentage of Covered Payroll
[(b-a)/c]

$ 10,641,543

75.7%

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AAL for benefits.

Additional information as of the latest actuarial valuation follows:

Valuation Date Actuarial Cost Method Amortization Method Remaining Amortization Period Asset Valuation Method Actuarial Assumption:
Ultimate Investment Rate of Return Projected Salary Increases Inflation Rate Postretirement Cost-of-Living Adjustments

June 30, 2009 Entry Age Level Percent of Pay, Open 30 Years Seven-Year Smoothed Market
7.50% 3.20 to 8.60% 3.75% 3% annually

Financial Section

29

Required Supplementary Schedules
See Independent Auditors' Report

Schedule of Funding Progress (Dollars in thousands)





Actuarial

Actuarial

Value of

Valuation

Plan Assets

Date

(a)

6/30/04 6/30/05 6/30/06 6/30/07 6/30/08 6/30/09

$ 44,617,956 46,836,895 49,263,027 52,099,171 54,354,284 54,818,373

Actuarial Accrued Liability (AAL) -Entry Age
(b)
$ 44,230,031
47,811,214
51,059,681
54,996,570
59,133,777
62,870,138

Unfunded

AAL

Annual

(UAAL)

Funding

Covered

(Funding Excess)

Ratio

Payroll

(b-a)

(a/b)

(c)

$ (387,925)

100.%9 % $ 8,083,118

974,319

98.0

8,252,598

1,796,654

96.5

8,785,985

2,897,399

94.7

9,482,003

4,779,493 8,051,765

91.9

10,197,584

87.2

10,641,543

UAAL (Funding Excess)
as a Percentage of Covered Payroll
[(b-a)/c]
(4.8)%
11.8
20.4
30.5
46.9
75.7

This data, except for annual covered payroll, was provided by the System's actuary.

Schedule of Employer Contributions (Dollars in thousands)

Year Ended June 30,
2004 2005 2006 2007 2008 2009

State Annual Required
Contribution
$ 782,301 815,693 855,626 927,371 986,759
1,026,287

Percentage Contributed
100 % 100 100 100 100 100

See accompanying notes to required supplementary schedules and accompanying independent auditors' report.

30

Financial Section

Notes to Required Supplementary Schedules
See Independent Auditors' Report

Notes to Required Supplementary Schedules
Schedule of Funding Progress The actuarial value of plan assets recognizes a portion of the difference between the market value of as-
sets and the expected actuarial value of assets, based on the assumed valuation rate of return. The amount recognized each year is one-seventh of the difference between market value and expected actuarial value. The actuarial value of plan assets is limited to a range between 80% and 120% of market value.
Schedule of Employer Contributions The required employer contributions and percentage of those contributions actually made are presented in
the schedule.
Actuarial Assumptions The information presented in the required supplementary schedules was determined as part of the actuarial
valuations at the dates indicated. Additional information from the actuarial valuations for the most recent two year period is as follows:

Valuation Date Actuarial Cost Method Amortization Method Remaining Amortization Period Asset Valuation Method Actuarial Assumption:
Ultimate Investment Rate of Return Projected Salary Increases Inflation Rate Postretirement Cost-of-Living Adjustments

June 30, 2009 Entry Age Level Percent of Pay, Open 30 Years Seven-Year Smoothed Market

June 30, 2008 Entry Age Level Percent of Pay, Open 30 Years Seven-Year Smoothed Market

7.50% 3.20 to 8.60% 3.75% 3% annually

7.50% 3.20 to 8.60% 3.75% 3% annually

Financial Section

31

Schedule of Administrative Expenses
For the Years ended June 30, 2010 and 2009

Personal Services:
Salaries and Wages Retirement Contributions Health Insurance FICA Miscellaneous
Total Personal Services
Communications:
Postage Publications and Printing Telecommunications Travel
Total Communications
Professional Services:
Computer Services Contracts Actuarial Services Audit Fees Legal Services Medical Services
Total Professional Services
Management Fees:
Building Maintenance Total Management Expenses
Other Services and Charges:
Temporary Services Repairs and Maintenance Supplies and Materials Courier Services Depreciation Expense Loss on Disposal of Equipment Miscellaneous
Total Other Services and Charges
Total Administrative Expenses
Less Reimbursement by Other State Retirement Systems for Services Rendered on Their Behalf
Net Administrative Expenses
See accompanying independent auditors' report.

2010
$ 15,945,900 1,496,586 3,049,140 954,789 66,254 21,512,669

2009
$ 15,954,214 1,540,040 1,951,674 928,231 64,629 20,438,788

238,680 234,256 136,531 91,594
701,061

240,652 307,782 187,628 104,463
840,525

1,326,150 2,110
173,359 124,375 48,385 112,740 1,787,119
724,875 724,875

1,540,053 2,430
132,436 84,930 48,732 145,790 1,954,371
724,875 724,875

-- 13,378 141,451 19,073 333,286 9,565 133,173
649,926
25,375,650

6,233 9,442 113,772 12,055 3,366,423
-- 107,153
3,615,078
27,573,637

5,153,138 $ 20,222,512

4,970,478 $ 22,603,159

32

Financial Section

Schedule of Investment Expenses
For the Years ended June 30, 2010 and 2009

Investment Advisory and Custodial Fees Miscellaneous Total Investment Expenses

2010
$ 20,557,658 1,872,049
$ 22,429,707

2009
$ 16,604,755 2,266,729
$ 18,871,484

See accompanying independent auditors' report.

Financial Section

33

Investment Overview
While the past year was less eventful than the prior year and returns were positive, the sovereign debt crisis emanating from Greece demonstrated that stock markets are still vulnerable to periods of bad news. There are undoubtedly large problems that need to be resolved, but many parts of the world economy are correcting the prior excesses. So as we cycle between episodes of good news and bad news, the financial markets will likely continue to fluctuate.
This pattern is not a new phenomenon and it is easy to get caught up in the latest headlines, but as a pension plan it is more important to stay focused on the long-term. The System continues to invest in a mix of liquid, high quality bonds and stocks. These types of investments allow the System to participate in rising markets while moderating the risks on the downside. A high quality balanced fund has proven to be a successful strategy in a variety of markets over a long period of time.
As in previous years, the bias to quality was a primary goal and was successfully met. "Conservation of Capital" and "Conservatism" continue to be the principal guides in investment decisions. The Board of Trustees continues to use a diversified portfolio to accomplish these objectives.
The economy rebounded during the past fiscal year, although the pace of growth was slowing towards the end of the period. The improvement in housing will likely continue to be slow and uneven as excess inventory and more foreclosures dampen housing starts and prices. Growth in employment, or rather the lack thereof, remains the largest single factor plaguing the economy. The unemployment rate does not appear to be increasing, but neither is it decreasing and remains mired at year ago levels of 9.5%. The real bright spot has been corporate profits, which rose 38%, as companies slashed costs and benefitted from a rebound in business and consumer spending.
Studies undertaken to evaluate the investment returns of pension funds over very long time horizons indicate that the asset allocation decision has the most impact on the fund's returns. Although the returns for the various asset categories vary from year to year, over the long term equities usually outperform fixed income and cash by a very wide margin. For that reason, the System has generally maintained a maximum equity exposure with the remainder of the fund in fixed income securities designed to generate income and preserve capital.
Returns for one, three, five, ten and twenty year periods are presented in this section. The longer time periods, such as the twenty-year period, allow

for more valid evaluation of returns, both in absolute terms and relative to an asset class index, by reducing emphasis on the short-term volatility of markets. The Daily Valuation Method was used to calculate rates of return which is in accordance with the CFA Institute's objectives as stated in its publication "Global Investment Performance Standards Handbook," second edition.
Equity markets rebounded nicely during the fiscal year. The return for the S&P 500 Index was 14.4%. The Dow Jones Industrial Average Index rose 18.9%. Among individual companies, returns varied depending upon the company's size, industry, and exposure to global markets. The MSCI EAFE Index returned 5.9% and the MSCI Emerging Market Index returned 23.2%.
In a change from last year, large and small capitalization domestic stocks underperformed. The S&P 400 Mid Capitalization Index outperformed both the S&P 500 and S&P 600 with a return of 24.9%. The S&P 600 Small Capitalization Index rose 23.6%, well above its ten-year average return of 5.6%, and also above the S&P 500's 14.4%.
These overall returns can be explained primarily by massive central bank and fiscal stimulus, which led to economic growth and rapidly increasing corporate profits. The improved foreign returns can be attributed to many of the same reasons and also the strong emerging market economies providing some offset to the more debt laden, slower growing economies of Europe and Japan.
Returns for the fixed income markets were above average this year. Yields on long-term Treasury bonds began the period at 4.3% and ended at the low of the year of 3.9%, after rapidly falling from a high of 4.8% in early April. Overall the ten-year U.S. Treasury note returned 8.3% and the thirty-year U.S. Treasury bond returned 11.3%. Short-term Treasury bills only returned 0.1%.
Our primary benchmark, the Barclays Government / Credit Index rose 9.6%. It is a shorter maturity index containing higher yielding corporate bonds as well as Treasuries. Higher quality bonds underperformed lower quality bonds as evidenced by the 8.9% return for AAA & AA rated bonds versus 18.3% for BBB rated bonds.
In summary, the investment status of the System is excellent. The high quality of the System's investments is in keeping with the continued policy of "Conservatism" and "Conservation of Capital."
Prepared by the Division of Investment Services

34

Investment Section

Rates of Return

15 10 5 -- (5) (10 )
1 year

Equities S&P 500

1 Year 3 Year 5 Year 10 Year 20 Year

Equities 13.63 ( 9.55) ( 0.29) ( 0.81) 7.63

S&P 500 14.43 ( 9.81) ( 0.79) ( 1.59)
7.67

3 year

5 year

10 year

Equities (%)

20 year

10 8 6 4 2 --
1 year

Fixed Income Barclays Govt/Credit

1 Year 3 Year 5 Year 10 Year 20 Year

Fixed Income
8.54
8.45
5.88
6.82
8.06

Barclays Govt/ Credit 9.65
7.37
5.26
6.48
7.16

3 year

5 year

10 year

20 year

Fixed Income (%)

12 10 8 6 4 2
-- (2 ) (4)
1year

Total Portfolio CPI

3year

5year

10year

Total

Portfolio

CPI

1 Year 11.09

1.05

3 Year

(2.28)

1.51

5 Year

2.55

2.30

10 Year

2.51

2.37

20 Year

7.94

2.62

20year

Total Portfolio (%)

Note: Rates of return are calculated using the Daily Valuation Method based on market rates of return.

Investment Section

35

Asset Allocation
Equities 60%

Fixed Income

Short-term Securities

50%

40%

30%

20%

10%

0%

05

06

07

08

09

10

Schedule of Fees and Commissions
For the Year Ended June 30, 2010
Investment Advisors' Fees: U.S. Equity International Equity Fixed Income
Investment Commissions: U.S. Equity International Equity
SEC Fees: Miscellaneous:
Total Fees and Commissions

2010
$ 13,155,047 6,025,171 --
9,160,956 5,805,641
128,784 3,249,489
$ 37,525,088

Investment Summary

Asset Allocation at June 30
Equities

2005
60.4%

Fixed Income

38.0%

Short-Term Securities 1.6%

Asset Allocation

at June 30 (in millions)

Equities

$27,122

Fixed Income

17,075

Short-Term Securities 739

Total Investments

$44,936

2006
61.2% 36.8% 2.0%
$28,654 17,244
906 $46,804

2007
62.5% 32.5% 5.0%
$32,929 17,115 2,626
$52,670

2008
58.8% 39.5% 1.7%

2009
56.0% 42.4% 1.6%

2010
61.9% 35.2% 2.9%

$29,531 19,802
865 $50,198

$23,733 17,945
685 $42,363

$28,238 16,076 1,320 $45,634

36

Investment Section

Portfolio Detail Statistics

Twenty Largest Equity Holdings*

Shares

Company

1,880,044 8,151,909 12,619,042 4,730,630 2,114,030 4,325,080 6,948,309 17,348,770 5,744,960 3,628,777 16,584,362 8,950,628
514,818 9,208,308 4,545,112 10,008,442 14,228,503 4,011,000 2,438,100 3,110,765

Apple Inc.

$

Exxon Mobil Corp.

Microsoft Corp.

Johnson & Johnson

International Business Machines Corp.

Procter & Gamble Co.

JPMorgan Chase & Co.

Bank of America Corp.

Hewlett-Packard Co.

Chevron Corp.

General Electric Co.

Wells Fargo & Co.

Google Inc.

AT&T Inc.

Wal-Mart Stores Inc.

Cisco Systems Inc.

Pfizer Inc.

Coca Cola Co.

Berkshire Hathaway Inc.

PepsiCo Inc.

Fair Value
472,887,467 465,229,441 290,364,156 279,391,008 261,040,424 259,418,298 254,377,593 249,301,825 248,641,869 246,248,807 239,146,500 229,136,077 229,068,269 222,748,971 218,483,534 213,279,899 202,898,453 201,031,320 194,292,189 189,601,127

Total of 20 Largest Equity Holdings

$ 5,166,587,227

Total Equity Holdings

$28,237,867,050

Ten Largest Fixed-Income Holdings*

Description

Maturity Date

U.S. Treasury Note

02/29/16

U.S. Treasury Note

06/30/16

U.S. Treasury Note

10/31/13

U.S. Treasury Note

11/15/19

U.S. Treasury Note

09/30/13

U.S. Treasury Note

04/15/13

U.S. Treasury Bond

11/15/28

FHLMC

07/27/12

General Electric Cap Corp. 06/01/11

U.S. Treasury Note

09/30/14

Interest Rate %

Par Value

Fair Value

2.625 $ 1,330,000,000 $ 1,368,343,900

3.250 1,032,000,000 1,094,487,600

2.750 1,021,000,000 1,074,520,820

3.375

863,000,000

893,809,100

3.125

804,000,000

856,010,760

1.750

833,000,000

851,934,090

5.250

696,000,000

837,698,640

1.125

821,000,000

826,902,990

4.110

626,000,000

638,689,020

2.375

599,000,000

618,701,110

Total of 10 Largest Fixed-Income Holdings

$ 9,061,098,030

Total Fixed-Income Holdings

$ 16,075,685,720

* A complete listing is available upon written request, subject to restrictions of O.C.G.A. Section 47-1-14.

Investment Section

37

Actuary's Certification Letter
July 21, 2010
Board of Trustees, Teachers Retirement System of Georgia Suite 100, Two Northside 75 Atlanta, GA 30318
Members of the Board:
Section 47-3-23 of the law governing the operation of the Teachers Retirement System of Georgia provides that the actuary shall make annual valuations of the contingent assets and liabilities of the Retirement System on the basis of regular interest and the tables last adopted by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the System prepared as of June 30, 2009. The report indicates that annual employer contributions at the rate of 10.28% of compensation for the fiscal year ending June 30, 2012 are sufficient to support the benefits of the System. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the System enacted through the 2009 session of the General Assembly. In preparing the valuation, the actuary relied on data provided by the System. While not verifying data at the source, the actuary performed tests for consistency and reasonableness.
The System is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the System and to reasonable expectations of anticipated experience under the System. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) Statement Nos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a percent of payroll. The valuation method used is the entry age normal cost method. The normal contribution rate to cover current cost has been deter-

mined as a level percent of payroll. Gains and losses are reflected in the unfunded accrued liability, which is amortized as a level percent of payroll within a 2-year period.
The System is being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the System is operating on an actuarially sound basis. Assuming that contributions to the System are made by the employer from year to year in the future at the rates recommended on the basis of the successive actuarial valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the System may be safely anticipated assuming future required contributions (ARC) are contributed when due.
The valuation continues to reflect the impact of the Plymel lawsuit based on the most recent information and data provided by the Retirement System.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the System.
Sincerely yours,

Edward A. Macdonald, ASA, FCA, MAAA President

Cathy Turcot Principal and Managing Director

38

Actuarial Section

Summary of Actuarial Assumptions & Methods

The laws governing the Teachers Retirement System of Georgia (the "System") provide that an actuary perform an annual valuation of the contingent assets and liabilities of the System and perform at least once every five years an actuarial investigation of the mortality, service, and compensation experience of the members and beneficiaries of the System. The latest actuarial valuation of the System prepared as of June 30, 2009, was made on the basis of the interest rate assumption approved by the Board on November 19, 2003, and the mortality, rates of separation and salary increase tables approved by the Board on March 22, 2006.
The more pertinent facts and significant assumptions underlying the computations included in the June 30, 2009, report are as follows:
a) Actuarial Method UsedThe actuarial cost method used to determine funding is the entry age actuarial cost method. Gains and losses are reflected in the unfunded accrued liability. Adopted December 30, 1976.
b) Ultimate Investment Return7.50% per annum, compounded annually.Adopted November 19, 2003.
c) Earnings ProgressionSalaries are expected to increase 3.20% to 8.60% annually depending upon the employee's age. Includes inflation at 3.75%. Adopted March 22, 2006.
d) Death, Disability and Withdrawal RatesDeath, disability and withdrawal rates for active employees and service retirement tables are based upon the System's historical experience. The death-afterretirement rates are based on the 1994 GroupAnnuity Mortality Table (set forward one year for males). Adopted March 22, 2006.
e) Asset Valuation Method7-year smoothed market actuarial value. The actuarial value of assets recognizes a portion of the difference between the market value of the assets and the expected value of assets, based on the assumed valuation rate of return. The amount recognized each year is one-seventh of the difference between market value and actuarial expected value. The actuarial value of assets is limited to a range between 80% and 120% of market value. Adopted March 22, 2006.
f) Service Retirement BenefitThe service benefit (pension) paid to members is an annuity that is owed to them at retirement that will provide a total

annual pension equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. It is also assumed that certain cost-of-living adjustments will be made in future years.
g) Actuarially Determined Unfunded Accrued Liability The present value of the unfunded accrued liability, based on unaudited data provided the actuary by the System, was approximately $8.1 billion at June 30, 2009.
h) Required Contributions (% of compensation) A "smoothed valuation interest rate" methodology was adopted on July 21, 2010 for the purpose of calculating the annual required contributions. Contributions required by the annual actuarial valuation as of June 30, 2009, to be made for the year ended June 30, 2012:

(1) Member

5.53%

(2) Employer: Normal Unfunded Accrued Liability Total

5.30% 4.98% 10.28%

Actuarial Section

39

Summary of Actuarial Assumptions & Methods

Service Retirement
Adopted March 22, 2006

Annual Rate*

Age

Men

50

28%

55

29

60

23

61

23

62

29

63

23

64

25

Women 23% 28 30 25 31 27 26

Annual Rate*

Age

Men

Women

65

32%

30%

66

25

30

67

30

26

68

28

26

69

28

26

70

100

100

*It is also assumed that 10% of eligible active members will retire each year with a reduced early retirement benefit and that an additional 5% of active members will retire in their first year of eligibility for unreduced retirement with 30 years of service.

Separation Before Service Retirement
Adopted March 22, 2006



Age

Death

20

0.05%

25

0.06

30

0.08

35

0.09

40

0.10

45

0.15

50

0.23

55

0.40

60

0.71

64

1.15

AnAnunanluRalaRteaotef Wofithdrawal

Disability

0-4 Yrs

5-9 Yrs

10+ Yrs

MEN

0.05% 0.05 0.07 0.07 0.09 0.11 0.25 0.53 -- --

39.00% 18.00 16.00 15.00 15.00 13.00 11.00 12.00
-- --

-- %-- %

11.00--

6.00

7.00

6.00

3.00

6.00

2.00

6.00

2.00

4.50

2.00

4.50

2.00

--

--

--

--

20

0.03%

25

0.03

30

0.03

35

0.05

40

0.07

45

0.09

50

0.13

55

0.21

60

0.39

64

0.67

0.03% 0.03 0.04 0.05 0.07 0.11 0.20 0.63 -- --

WOMEN
30.00% 15.00 16.00 15.00 12.00 11.00 11.00 12.00
-- --

--% 13.00 8.00 8.00 6.00 5.00 4.50 4.50
-- --

--% -- 5.00 4.00 3.00 2.00 2.00 3.00 -- --

40

Actuarial Section

Active Members





Fiscal

Year(1)

Members

2004 2005 2006 2007 2008 2009

198,572 199,088 206,592 215,566 224,993 226,537

Actuarial Valuation Data

Active Members

Annual

Payroll

Average

(000's)

Pay

$8,0 83,11 8 8,252,598 8,785,985 9,492,003 10,197,584 10,641,543

$40 ,706 41,452 42,528 44,033 45,324 46,975

% Increase
1.2 % 1.8 2.6 3.5 2.9 3.6

Retirees and Beneficiaries

Added to Roll

Removed from Roll



Roll-End of Year



Annual

Annual

Annual

Fiscal

Allowances

Allowances Allowances

Year(1) Number (000's) Number

(000's)

Number (000's)

2004

5,381 $ 206, 251 1,483 $ 29, 525 61,590 $1,656,445

2005

6,176

230,973

1,594

33,139

66,172 1,854,279

2006

5,691

223,279

1,644

37,087

70,219 2,040,471

2007

5,858

230,924

1,656

39,293

74,421 2,232,102

2008

5,817

238,137

1,655

39,808

78,583 2,430,431

2009

5,543

245,006

1,768

45,116

82,358 2,630,321

% Increase in Annual Allowances
11.9 %
11.9
10.0
9.4
8.9
8.2

Average Annual Allowances $ 26,895 28,022
29,059
29,993
30,928
31,938

(1) Fiscal year refers to the actuarial valuation performed as of June 30 of that year and determines the funding necessary for the fiscal year beginning two years after the valuation date. An actuarial valuation for the fiscal year ended June 30, 2010 is currently in process and was not available for this analysis.

Actuarial Section

41

Actuarial Valuation Data

Solvency Test (in thousands)


Fiscal
Year*

Aggregate Actuarial Accrued Liabilities For

(1) Active Member

(2) Retirees
and

(3) Active Members Actuarial (Employer-Financed Value of

Contributions Beneficiaries

Portion)

Assets

Portion of Accrued Liabilities Covered by Assets
(1) (2) (3)

2005 2006 2007 2008 2009 2010

$ 4,923,415 5,171,813 5,417,408 5,703,184 6,009,710 6,382,932

$ 19,870,020 23,229,592 25,653,251 28,212,100 30,915,200 29,725,063

$ 19,436,596 19,409,809 19,989,022 21,081,286 22,208,867 26,762,143

$ 44,617,956 46,836,895 49,263,027 52,099,171 54,354,284 54,818,373

100.0 % 100.0 % 100.0 %

100.0 100.0

100.0 100.0

95.0 %
91.0

100.0 100.0 86.3

100.0 100.0 78.5

100.0 100.0 69.9

* Fiscal year refers to the actuarial valuation performed as of June 30 of that year and determines the funding necessary for the fiscal year beginning two years after the valuation date. An actuarial valuation for the fiscal year ended June 30, 2010 is currently in process and was not available for this analysis.

Member and Employer Contribution Rates

Fiscal Year
2006 2007 2008 2009 2010 2011

Member
5.00 % 5.00 5.00 5.00 5.25 5.53

Employer
9.24 % 9.28 9.28 9.28 9.74 10.28

42

Actuarial Section

Actuarial Valuation Data

Analysis of Financial Experience (in millions)

Analysis of the Change in Unfunded Accrued Liability Increase (Decrease) During the Years Ended June 30,

Item

2009

2008

2007

2006

2005

2004

Interest Added to Previous Unfunded Accrued Liability
Accrued Liability Contribution
Experience:

$ 358.5 $ 217.3 (125.0) (118.5)

Valuation Asset Growth

2,433.5

548.9

Pensioners' Mortality

50.1

58.4

Turnover and Retirements (1)

307.1

291.4

New Entrants

185.1

258.8

Salary Increases Method Changes (5)

14.1

162.8

--

--

Amendments (2)

--

386.3

Change in Member Contribution Rate (4) --

Assumption Changes (3)

--

(15.7) --

Miscellaneous

48.9

92.4

Total Increase (Decrease)

$ 3,272.3 $ 1,882.1

$ 134.7 57.2
(132.3) 25.6 213.3 212.6 294.5 -- 252.3 ( 8.4 ) -- 51.2
$ 1,100.7

$ 73.1 51.9
675.3 ( 40.7) 65.8 143.5 144.1 (339.2) 48.5
-- -- --
$ 822.3

$ (29.1) 49.4
516.4 ( 14.0) 59.9 104.0 (227.5) 313.7
-- -- 589.4 --
$ 1,362.2

$ (35.0) 79.6
507.5 48.8 26.8 118.5 (667.1)
-- -- -- -- --
$ 79.1

(1) Turnover and Retirements 2004 - Reflects impact of change in reported data due to a change in computer system. Previous years' data reported active members as any participant who contributed during the fiscal year. The 2004 data reported active members as only those who were contributing any of the last three months of the fiscal year.
(2) Amendments 2006 - Reflects the impact of House Bill 400 which increased allowances effective July 1, 2006 to retirees and beneficiaries retired before July 1, 1987. 2007- Reflects the impact of the first phase of the Plymel lawsuit. 2008- Reflects the impact of the final Plymel lawsuit.
(3) Assumption Changes 2005 - The assumed rates of withdrawal, disability, retirement, and mortality and the assumed rates of salary increase have been revised to more closely reflect the actual and anticipated experience of the System. In addition, the administration expense load was increased to 0.25% from 0.15% of active payroll.
(4) Member Contribution Rate 2007 - Reflects an increase in the member contribution rate from 5.00% to 5.25% effective July 1, 2009. 2008 - Reflects an increase in the member contribution rate from 5.25% to 5.53% effective July 1, 2010.
(5) Method Changes 2006 - Reflects change from 5-year to 7-year market value smoothing (method for determining the actuarial value of
assets).

Actuarial Section

43

Statistical Section Overview

The statistical section presents additional information to provide financial statement users with added historical perspective, context, and detail to assist in using the information in the financial statements, notes to financial statements, and required supplementary information to understand and assess the System's financial condition.
Financial Trends
The schedules presented on page 45 and page 46 contain trend information to help the reader understand how the System's financial position has changed over time.

Operating Information
The schedules presented on pages 47 through 58 contain benefits, service and employer data to help the reader understand how the System's financial report relates to the services of the System and the activities it performs.

44

Statistical Section

Financial Trends

Additions by Source (in thousands)





Net

Fiscal

Member

Employer

Investment

Year

Contributions

Contributions Income (Loss)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$ 369,006 403,952 438,998 448,929 464,931 485,721 524,940 554,027 567,635 592,264

$ 808,480 716,917 768,673 782,301 815,693 855,626 927,371 986,759
1,026,287 1,057,416

$ (2,099,972) (1,610,477) 1,669,768 3,794,733 3,279,505 2,691,062 6,792,341 (1,775,578) (6,572,435) 4,671,571

Total Additions to (Deductions from) Plan Net Assets
$ (922,486) ( 489,608) 2,877,439 5,025,963 4,560,129 4,032,409 8,244,652 (234,792)
(4,978,513) 6,321,251

Contributions were made in accordance with actuarially determined contribution requirements.

Deductions by Type (in thousands)

Fiscal Year

Service

Benefit Payments

Partial

Lump-Sum

Lump-Sum

Survivor Supplemental Death

Option (1) Disability Benefits Payments (2) Settlement

Total Benefit Payments

Net Administrative
Expenses

Refunds

Total Deductions From Plan Net Assets



2001 $ 1,058,683 $ -- $ 37,118 $ 52,528 $ 3,881 $ 1,166 $ 1,153,376 $ 10,502 $ 58,831 $ 1,222,709

2002 1,181,838

--

40,418 57,178 3,582 1,355 1,284,371 15,966 41,250 1,341,587

2003 1,323,871

--

43,545 62,223 3,120 1,881 1,434,640 14,804 40,883 1,490,327

2004 1,481,710

--

47,002 65,821 2,757 1,177 1,598,467 15,378 42,580 1,656,425

2005 1,656,652 15,653 50,959 72,025 2,398 1,791 1,799,478 19,558 50,491 1,869,527

2006 1,863,194 26,601 62,773 35,394 2,093 1,376 1,991,431 20,173 53,138 2,064,742

2007 2,128,927 33,378 70,431 46,670 1,842 1,702 2,282,950 22,073 52,875 2,357,898

2008 2,527,156 40,820 89,348 95,452 1,648 2,059 2,756,483 23,744 54,482 2,834,709

2009 2,385,561 37,191 72,028 36,922 1,414 1,371 2,534,487 22,603 49,414 2,606,504

2010 2,639,144 34,530 74,998 49,290 1,122 1,340 2,800,424 20,223 53,638 2,874,285
(1) Partial Lump-Sum Option Plan became effective July 1, 2004. (2) Supplemental payments to retirees who belong to a local retirement system.


Statistical Section

45

Financial Trends

Changes in Net Assets (in thousands)





Total



Additions

FFisicsaclal

to Plan

YYeaerar

Net Assets

2001

$ (922,486)

2002

( 489,608 )

2003

2,877,439

2004

5,025,963

2005

4,560,129

2006

4,032,409

2007

8,244,652

2008

( 234,792 )

2009

(4,978,513)

2010

6,321,251

Total Deductions from Plan Net Assets $ 1,222,709 1,341,587 1,490,327
1,656,425 1,869,527 2,064,742 2,357,898 2,834,709 2,606,504 2,874,285

Changes in Plan Net Assets $ (2,145,195) ( 1,831,195 ) 1,387,112 3,369,538 2,690,602 1,967,667 5,886,754 ( 3,069,501 ) ( 7,585,017 ) 3,446,966

46

Statistical Section

Operating Information

Benefit Payment Statistics

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

12

24

Number of Retirees

87,017 82,382

78,633

76,133

70,239

66,282

61,590

57,692

54,222

50,767

36

48

60

72

84

96

$2,800

$25

$2,757 $2,535

$2,283

$1,991

$20

$1,800

$1,435 $1,599 $15

$1,153 $1,284 $10

$5

$0

2001

2002

2003 2004

2005

2006

2007

2008

2009

Annual Benefit (in millions)

Average Monthly Benefit (1)

$ 2,900

$ 2,600

$ 2,300

$2,072

$ 2,000 $1,893 $1,974
$ 1,700

$2,163

$2,363

$2,389

$2,262

$2,620 $2,528

2010 $2,682

$ 1,400 2001

2002

2003 2004

2005

2006

2007

2008

2009

2010

(1) Retirees who belonged to a local retirement system and who received supplemental payments are not included.

Statistical Section

47

Operating Information

Member Withdrawal Statistics

Number of Members

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
6

6,944 6,939

8,148 8,251 8,649 8,518
7,805 7,714
9,120

7

8

9

10

11

12,563

12

13

$60

$59

$55

$50

$55

$54

$53

$52

$51

$49

$45

$41

$41

$43

$40

$35 2001

2002

2003 2004

2005

2006

2007 2008 2009 2010

Annual Withdrawal (in millions)

$8,000 $7,000 $6,500 $6,000

Average Withdrawal

$5,929

$6,139

$6,689 $6,338

$7,119

$7,719

$5,500 $5,000
$4,683 $4,500

$5,302 $4,523

$5,458

$4,000
$3,500 2001

2002

2003 2004

2005

2006

2007

2008

2009

2010

48

Statistical Section

Average Monthly Benefit Payments for New Retirees

Operating Information

Effective Retirement Dates
for Fiscal Years Ended June 30, 10 - 15

16 - 20

Years Credited Service Years Credited Service

21 - 25

26 - 30 Over 30

2001

Average monthly benefit

$ 639.66 $1,184.73 $1,549.76

$2,474.70 $3,198.55

Average final average salary

$2,295.08 $3,103.29 $3,403.14

$4,251.56 $5,069.71

Number of retirees

751

447

633

2,017

1,398



2002

Average monthly benefit

$ 669.01 $1,129.23 $1,646.88

$2,624.62 $3,322.04

Average final average salary

$2,499.32 $3,627.31 $3,545.14

$4,433.46 $5,070.61

Number of retirees

721

445

614

1,795

1,283



2003

Average monthly benefit

$ 783.71 $1,526.45 $1,859.12

$2,604.05 $3,462.68

Average final average salary

$2,673.99 $3,339.27 $3,745.58

$4,401.55 $5,216.65

Number of retirees

807

483

545

1,714

1,661



2004

Average monthly benefit

$1,405.03 $1,351.04 $1,895.12

$2,763.31 $3,557.04

Average final average salary

$5,017.00 $3,283.34 $3,823.40

$4,471.74 $5,389.07

Number of retirees

906

579

630

1,864

1,611



2005

Average monthly benefit

$ 729.34 $1,216.78 $1,751.04

$2,575.64 $3,474.65

Average final average salary

$2,960.22 $3,315.00 $4,014.56

$4,511.41 $5,345.03

Number of retirees

907

689

693

1,379

2,545



2006

Average monthly benefit

$ 759.49 $1,236.93 $1,874.90

$2,356.35 $3,361.85

Average final average salary

$3,002.19 $3,273.99 $4,036.61

$4,571.12 $5,338.88

Number of retirees

815

651

653

718

2,780



2007

Average monthly benefit

$ 757.50 $1,246.18 $1,782.60

$2,350.01 $3,330.98

Average final average salary

$3,193.24 $3,580.49 $4,061.53

$4,669.55 $5,406.13

Number of retirees

975

704

758

729

2,725

2008
Average monthly benefit Average final average salary Number of retirees

$ 809.08 $1,324.02 $1,866.99

$2,466.86 $3,488.62

$3,404.28 $3,734. 90 $4,28 3.55 $ 4,797.61 $5,676.32

1,010

726

777

686

2,665

2009

Average monthly benefit

$ 812.18 $1,293.52 $1,892.41

$2,564.06 $3,603.15

Average final average salary

$3,430.35 $3,676. 14 $4,30 2.88 $ 4,938.17 $5,785.56

Number of retirees 1,008

701

774

601

2,480

2010 Average monthly benefit
Average final average salary Number of retirees

$ 859.93 $1,433.00 $1,931.22 $2,624.98 $3,655.74

$3,651.87 $4,095. 26 $4,3 66.28 $ 5,142.35 $5,820.83

1,195

786

1,018

690

2,736

Total
$2,183.38 $4,183.26
5,246
$2,258.01 $4,298.67
4,858
$2,418.00 $4,405.15
5,210
$2,527.79 $4,628.32
5,590
$2,431.70 $4,455.10
6,213
$2,436.59 $4,495.40
5,617
$2,335.28 $4,182.19
5,891
$2,424.71 $4,755.66
5,864
$2,456.32 $4,794.47
5,564
$2,479.89 $4,902.99
6,425

Statistical Section

49

Operating Information

Retired Members by Type of Benefit

Amount of Number of Type of Retirement (1)

Monthly Benefit Retirees A

B

C D Maximum Opt-1

Option Selected (2) Opt-2 Opt-3 Opt-4

Opt-2 Pop-Up

Opt-3 Pop-Up

$

1 - 250 725 368 74 128 155 377

9 221

251-500 4,138 3,320 449 363

6 2,759 101 744

501-750 5,208 4,268 522 395 23 3,587 151 867

751-1000 5,305 4,439 490 347 29 3,556 170 872

1001-1250 4,728 3,988 437 285 18 3,087 140 735

1,251 - 1,500 4,017 3,428 349 235

5 2,571 140 642

1,501 - 1,750 3,828 3,325 303 199

1 2,455 125 597

1,751 - 2,000 3,667 3,225 281 161

0 2,372 133 512

2,001 - 2,250 3,805 3,432 266 107

0 2,435 162 488

2,251 - 2,500 4,169 3,797 269 103

0 2,752 162 511

2,501 - 2,750 4,808 4,484 235 89

0 3,230 178 525

2,751 - 3,000 5,312 5,054 166 92

0 3,560 214 576

3,001 - 3,250 6,002 5,848 104 50

0 4,189 298 483

3,251 - 3,500 5,712 5,610 68 34

0 4,009 271 420

3,501 - 3,750 5,138 5,070 38 30

0 3,594 279 416

3,751 - 4,000 3,977 3,917 24 36

0 2,813 213 315

4,001 - 4,250 3,240 3,203 15 22

0 2,317 159 237

4,251 - 4,500 2,441 2,415 11 15

0 1,721 116 195

4,501 - 4,750 1,913 1,896

8

9

0 1,271 111 176

4,751 - 5,000 1,581 1,564

5 12

0 1,018

90 168

Over 5,000 7,303 7,222 15 66

0 4,266 401 942

TOTALS 87,017 79,873 4,129 2,778 237 57,939 3,623 10,642

44

36

26

170 101 179

210

51 232

269

34 259

240

39 312

220

36 254

243

42 217

230

41 213

243

48 274

248

56 280

265

72 326

257

69 394

261

96 386

282

94 376

233

84 297

210

47 213

159

65 157

154

52 112

126

40 113

102

36

83

750 273 313

4,916 1,412 5,016

12 84 110 145 175 154 149 166 155 160 212 242 289 260 235 166 146 91 76 84 358 3,469

(1) Type of Retirement A - Service B - Disability C - Survivor benefit D - Supplemental payments to retirees who belonged to a local retirement system.
(2) Refer to Introductory Section, beginning on page 10 for descriptions of Options.

50

Statistical Section

Retirement Payments By County Residence

Operating Information

County

Number of FY10 Total Retirees Gross Pay

Appling Atkinson Bacon Baker Baldwin Banks Barrow Bartow Ben Hill Berrien Bibb Bleckley Brantley Brooks Bryan Bulloch Burke Butts Calhoun Camden Candler Carroll Catoosa Charlton Chatham Chattahoochee Chattooga Cherokee Clarke Clay Clayton Clinch Cobb

219 74 116 11 546 148 432 673 217 223 1,722 227 106 152 193 1,047 190 189 26 238 127 1,307 328 68 2,207 22 246 1,193 2,649 10 833 82 3,888

$ 7,245,392.43 2,089,343.74 3,815,703.89 292,599.24 17,576,562.44 3,873,934.50 11,354,516.11 19,800,691.41 7,326,993.83 6,352,420.30 54,193,536.42 6,478,526.15 3,212,993.69 4,682,023.03 5,767,990.89 35,874,115.45 5,826,372.13 5,707,299.61 1,387,946.68 8,295,611.74 3,391,282.23 42,683,632.82 10,063,429.34 2,321,959.48 73,160,984.18 696,149.82 6,848,290.76 34,141,724.29
109,119,308.34 921,905.59
37,344,263.97 2,667,948.68 142,414,354.92

County

Number of FY10 Total Retirees Gross Pay

Coffee Colquitt Columbia Cook Coweta Crawford Crisp Dade Dawson Decatur Dekalb Dodge Dooly Dougherty Douglas Early Echols Effingham Elbert Emanuel Evans Fannin Fayette Floyd Forsyth Franklin Fulton Gilmer Glascock Glynn Gordon Grady Greene

414 371 1,576 183 895 49 263 109 192 89 4,441 227 101 1,092 645 25
6 286 208 314 115 271 1,090 1,092 553 290 5,486 228 29 983 423 70 222

$ 13,119,080.98 12,399,363.88 47,604,102.11 5,295,026.21 28,240,307.63 1,605,710.13 7,786,309.78 3,013,282.61 6,077,519.07 4,797,282.28 189,176,379.45 6,932,648.08 3,287,873.52 40,745,682.71 21,822,850.36 2,696,130.12 243,742.32 7,394,966.83 5,160,894.22 10,312,579.61 3,375,792.12 7,601,409.22 41,398,967.84 34,569,086.37 16,396,007.39 8,574,354.30 226,574,562.07 7,169,334.18 987,323.77 29,137,002.35 12,294,927.89 3,043,777.55 6,478,408.56

Statistical Section

51

Operating Information

Retirement Payments By County Residence continued

County

Number of FY10 Total Retirees Gross Pay

Gwinnett Habersham Hall Hancock Haralson Harris Hart Heard Henry Houston Irwin Jackson Jasper Jeff Davis Jefferson Jenkins Johnson Jones Lamar Lanier Laurens Lee Liberty Lincoln Long Lowndes Lumpkin Macon Madison Marion McDuffie McIntosh Meriwether

2,949 466
1,366 116 239 277 231 64
1,154 968 91 654 164 122 183 98 100 176 206 52 581 207 201 112 43
1,293 346 127 576 67 246 143 209

$ 114,223,555.65 12,898,464.66 44,555,613.32 3,228,684.08 7,309,467.13 8,324,788.34 7,109,486.89 1,609,477.48 37,186,503.16 31,730,593.11 2,974,632.52 15,827,624.00 5,184,543.17 3,502,804.99 4,882,525.69 2,899,283.53 2,703,335.23 5,486,927.79 5,580,885.35 1,638,615.17 18,011,775.62 6,343,169.65 6,550,968.09 3,126,896.55 1,281,159.27 40,074,601.14 10,800,565.24 4,109,232.23 14,274,118.26 2,056,227.62 7,864,614.15 3,579,444.07 6,493,218.78

County

Number of FY10 Total Retirees Gross Pay

Miller Mitchell Monroe Montgomery Morgan Murray Muscogee Newton Oconee Oglethorpe Paulding Peach Pickens Pierce Pike Polk Pulaski Putnam Quitman Rabun Randolph Richmond Rockdale Schley Screven Seminole Spalding Stephens Stewart Sumter Talbot Taliaferro Tattnall

24 221 214
99 261 261 2,045 520 870 214 352 502 496 194 184 384 100 273
2 222
20 2,457
597 42
183 30
690 317
69 384
64 18 160

$ 950,087.61 6,548,455.24 6,165,667.12 2,893,806.29 7,493,730.02 8,457,645.02 68,296,121.95 14,703,142.59 30,291,214.23 6,032,457.39 10,023,319.01 16,955,174.66 13,761,594.78 5,300,361.44 5,106,904.55 12,937,294.70 3,266,063.25 8,232,377.11 575,968.62 6,089,078.29 1,170,936.57 77,018,252.55 22,473,175.58 1,359,843.88 5,018,785.66 1,482,548.33 22,018,578.13 9,645,182.06 2,130,647.37 13,613,011.73 1,642,709.37 446,135.10 4,626,942.97

52

Statistical Section

Operating Information

Retirement Payments By County Residence continued

County

Number of FY10 Total Retirees Gross Pay

Taylor Telfair Terrell Thomas Tift Toombs Towns Treutlen Troup Turner Twiggs Union Upson Walker Walton Ware Warren Washington Wayne Webster Wheeler White Whitfield Wilcox Wilkes Wilkinson Worth Outside GA

96 184 36 561 727 294 183 81 606 150 60 251 310 487 765 483 57 230 303 21 86 346 741 125 138 109 176 11,068

$ 3,002,956.74 5,474,307.15 2,039,505.20 16,817,264.41 23,604,262.11 9,373,402.54 4,608,581.43 2,612,239.82 20,100,023.98 4,563,651.58 1,668,620.05 6,568,067.86 9,668,308.80 14,238,566.12 21,569,474.24 16,418,914.14 1,645,808.44 7,669,800.01 9,125,561.71 526,169.79 2,448,016.46 8,734,933.40 26,131,926.80 3,477,570.01 3,793,150.23 3,414,764.92 4,972,162.89
232,871,313.57

TOTALS

87,017 $ 2,799,532,833.11*

* This number does not include the effect of the Plymel lawsuit as described on page 28.

Statistical Section

53

Operating Information

Principal Participating Employers







2010

2001





Percentage

Percentage



Covered

of Total

Covered

of Total

Emp loyer s

Employees Rank System

Employees Rank System

Gwinnett County Schools Cobb County Schools Dekalb County Schools Fulton County Schools University of Georgia Atlanta City Schools Clayton County Schools Chatham County Schools Henry County Schools Muscogee County School District Medical College of Georgia

16,446 12,068 11,186 10,164 7,806 5,624 5,576 4,396 4,064 3,883
__

1 7.41 %

2 5.43

3 5.04

4 4.58

5 3.52

6 2.53

7 2.51

8 1.98

9 1.83

10 1.75

__

__

11,351 10,555 10,550 7,702 8,763 5,937 5,236 4,062
__ 3,860 3,816

1 5.85 %

2 5.44

3 5.43

5 3.97

4 4.51

6 3.06

7 2.70

8 2.09

__

__

9 1.99 10 1.97

All Others

140,833

Total

222,046



63.42 100.00 %

122,340 194,172

62.99 100.00 %

54

Statistical Section

Operating Information

Participating Employers

Universities and Colleges
Abraham Baldwin Agricultural College Albany State University Armstrong Atlantic State University Atlanta Metropolitan College Augusta State University Bainbridge College Clayton College and State University Coastal College Columbus State University Dalton State College Darton College East Georgia College Fort Valley State University Gainesville College Georgia College and State University Georgia Gwinnett College Georgia Highlands College Georgia Institute of Technology Georgia Perimeter College Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Kennesaw State University Macon State College Medical College of Georgia Middle Georgia College North Georgia College and State
University Savannah State University Skidaway Institute of Oceanography South Georgia College Southern Polytechnic State University State University of West Georgia University of Georgia Valdosta State University Waycross College
Boards of Education
Appling County Atkinson County Atlanta City Bacon County Baker County Baldwin County

Boards of Education continued
Banks County Barrow County Bartow County Ben Hill County Berrien County Bibb County Bleckley County Brantley County Bremen City Brooks County Bryan County Buford City Bulloch County Burke County Butts County Calhoun City Calhoun County Camden County Candler County Carroll County Carrollton City Cartersville City Catoosa County Charlton County Chatham County Chattahoochee County Chattooga County Cherokee County Chickamauga City Clarke County Clay County Clayton County Clinch County Cobb County Coffee County Colquitt County Columbia County Commerce City Cook County Coweta County Crawford County Crisp County Dade County Dalton City Dawson County Decatur City

Statistical Section

Boards of Education continued
Decatur County Dekalb County Dodge County Dooly County Dougherty County Douglas County Dublin City Early County Echols County Effingham County Elbert County Emanuel County Evans County Fannin County Fayette County Floyd County Forsyth County Franklin County Fulton County Gainesville City Gilmer County Glascock County Glynn County Gordon County Grady County Greene County Griffin-Spalding County Gwinnett County Habersham County Hall County Hancock County Haralson County Harris County Hart County Heard County Henry County Houston County Irwin County Jackson County Jasper County Jeff Davis County Jefferson City Jefferson County Jenkins County Johnson County Jones County
55

Operating Information

Participating Employers
Boards of Education continued
Lamar County Lanier County Laurens County Lee County Liberty County Lumpkin County Macon County Madison County Marietta City Marion County McDuffie County McIntosh County Meriwether County Miller County Mitchell County Monroe County Montgomery County Morgan County Murray County Muscogee County Newton County Oconee County Oglethorpe County Paulding County Peach County Pelham City Pickens County Pierce County Pike County Polk School District Pulaski County Putnam County Quitman County Rabun County Randolph County Richmond County Rockdale County Rome City Schley County Screven County Seminole County Social Circle City Stephens County Stewart County Sumter County
56

Boards of Education continued
Talbot County Taliaferro County Tattnall County Taylor County Telfair County Terrell County Thomas County Thomasville City Thomaston-Upson County Tift County Toombs County Towns County Treutlen County Trion City Troup County Turner County Twiggs County Union County Valdosta City Vidalia City Walker County Walton County Ware County Warren County Washington County Wayne County Webster County Wheeler County White County Whitfield County Wilcox County Wilkes County Wilkinson County Worth County
Public Libraries
Athens Regional Library Barnesville-Lamar County Library Bartow County Library Bartram Trail Regional Library Brooks County Library Camden County Library Chatsworth-Murray County Library
Statistical Section

Operating Information

Participating Employers
Public Libraries continued
Chattooga County Library Cherokee Regional Library Chestatee Regional Library Clayton County Regional Library Coastal Plains Regional Library Cobb County Public Library Conyers-Rockdale Library Coweta County Public Library Dekalb County Public Library Desota Trail Regional Library Dougherty County Public Library East Central Georgia Regional Library Elbert County Public Library Fitzgerald-Ben Hill County Library Flint River Regional Library Forsyth County Public Library Gwinnett County Public Library Hall County Library Hart County Library Hawkes Library Henry County Library Houston County Public Library Jefferson County Library Kinchafoonee Regional Library Lake Blackshear Regional Library Lee County Public Library Lincoln County Library Live Oak Public Library M.E. Roden Memorial Library Mary Vinson Memorial Library Middle Georgia Regional Library Moultrie-Colquitt County Library Mountain Regional Library Newton County Library Northeast Georgia Regional Library Northwest Georgia Regional Library Ocmulgee Regional Library Oconee Regional Library Ohoopee Regional Library Okefenokee Regional Library Peach Public Library Piedmont Regional Library Pine Mountain Regional Library Roddenberry Memorial Library Sara Hightower Regional Library

Public Libraries continued
Satilla Regional Library Screven-Jenkins Regional Library Sequoyah Regional Library South Georgia Regional Library Southwest Georgia Regional Library Statesboro Regional Library Thomas County Public Library Three Rivers Regional Library Troup-Harris-Coweta Regional Library Uncle Remus Regional Library Warren County Public Library West Georgia Regional Library Worth County Library System
Technical Colleges
Albany Technical College Altamaha Technical College Athens Technical College Atlanta Technical College Augusta Technical College Central Georgia Technical College Chattahoochee Technical College Columbus Technical College Dekalb Technical College Georgia Northwestern Technical College Gwinnett Technical College Heart of Georgia Technical College Lanier Technical College Middle Georgia Technical College Moultrie Technical College North Georgia Technical College Ogeechee Technical College Okefenokee Technical College Sandersville Technical College Savannah Technical College South Georgia Technical College Southeastern Technical College Southern Crescent Technical College Southwest Georgia Technical College Valdosta Technical College West Georgia Technical College Wiregrass Georgia Technical College

Statistical Section

57

Operating Information

Participating Employers
Regional Educational Service Agencies
Central Savannah River Area RESA Chattahoochee Flint RESA Coastal Plains RESA First District RESA Griffin RESA Heart of Georgia RESA Metro RESA Middle Georgia RESA North Georgia RESA Northeast Georgia RESA Northwest Georgia RESA Oconee RESA Okefenokee RESA Pioneer RESA Southwest Georgia RESA West Georgia RESA
Charter Schools
Academy of Lithonia Charter Academy of Mabelton Academy of Smyrna Charter Amana Academy Atlanta Preparatory Academy Baconton Community Charter School Brighten Academy Challenge Charter Academy Chancellor Beacon Academy Charles Drew Charter School Charter Conservatory for Liberal Arts
and Technology, Inc. Dekalb Academy of Technology Dekalb Path Academy Destiny Academy of Excellence Fulton Science Academy Charter School Georgia Magnet Charter School Imagine Wesley International Academy International Community Charter School Ivy Preparatory Academy Kennesaw Charter Science Kidspeace National Centers Kipp Metro Atlanta Collaborate Kipp South Fulton Academy Lewis Academy of Excellence Marietta Charter School

Charter Schools continued
Mountain Education Center Neighborhood Charter School New Life Academy of Excellence Odyssey Charter School Scholars Academy Inc. Southeast Atlanta Charter Schools T.E.A.C.H. Charter School Tech High School University Community Academy
State Agencies
Department of Behavioral Health Department of Community Health Department of Corrections Department of Human Resources Department of Juvenile Justice Department of Natural Resources Department of Public Safety Georgia Department of Driver Services Georgia Department of Economic Development Georgia Department of Agriculture Georgia Department of Audits Georgia Department of Early Care and Learning Georgia Department of Education Georgia Department of Labor Georgia Public Defender Council Georgia Public Telecommunications Georgia Student Finance Committee Office of Planning and Budget Secretary of State State Accounting Office Technical College System of Georgia
Other
Baldwin County Board of Health Board of Regents Dekalb County DFCS Effingham County Tax Office Fulton County DFCS Georgia Association of Educators Georgia Military College Henry County Health Department Mitchell Baker Services Ware County Health Department

58

Statistical Section

65
years
Two Northside 75, Suite 100 Atlanta, GA 30318
(404) 352-6500 or (800) 352-0650 www.trsga.com