Comprehensive Annual Financial Report - Minnesota State ...

Financial Highlights
å PERA’s Net Assets increased 1.9% during the year
from $20.2 billion in fiscal year 2011 (FY11) to
$20.5 billion in FY12.
å Total additions for FY12 were $2 billion,
comprised of contributions of $970 million,
investment gains of $505 million, a transfer of
assets from new participants in the Statewide
Volunteer Firefighter Retirement Plan of $3 million,
a transfer of assets from new participants in
the Police & Fire Plan of $488 million, and other
income of $1.2 million.
å Total deductions for the year increased from
$1.5 billion in FY11 to $1.6 billion in FY12
largely due to an increase in the number of benefit
recipients and a 1% COLA granted in January
2012.
å As of June 30, 2012 the General Employees
Retirement Fund is actuarially funded at 73.5%.
PERA’s Police and Fire Fund is actuarially funded
at 78.3%, and PERA’s Correctional Fund is 89.3%
funded. The Minneapolis Employees Retirement
Fund is 69.1% funded.
Financial Analysis of PERA’s Funds
PERA is the administrator of four multi-employer
cost-sharing defined benefit plans, one agent lumpsum
defined benefit plan, and one defined contribution
plan. In a defined contribution plan, pension
benefits are determined by contributions made to
a member’s account and investment returns for
those contributions. PERA administers one such
MERF SVF
2012 2011 2012 2011
$ 56,789 $ 29,708 $ 59 $ 107
786,136 881,519 6,763 3,413
71,668 60,609 694 258
0 0 0 0
$914,593 $971,836 $7,516 $3,778
$ 114 $ 240 $ 1 $ 0
0 0 0 0
0 0 0 0
71,668 60,609 694 258
0 0 0 0
$ 71,782 $ 60,849 $ 695 $ 258
$842,811 $910,987 $6,821 $3,520
Financial Section
plan: the Public Employees Defined Contribution Plan
(PEDCP). In a defined benefit plan, pension benefits
are determined by a member’s salary or benefit level
and credited years of service, regardless of contribution
amounts and investment returns for those contributions
over the working career of a member. PERA administers
five such plans: the General Employees Retirement
Fund (GERF), the Public Employees Police and Fire Fund
(PEPFF), the Minneapolis Employees Retirement Fund
(MERF), the Statewide Volunteer Firefighter Retirement
Plan (SVF) and the Public Employees Local Government
Correctional Services Retirement Fund (which is called
the Public Employees Correctional Fund or PECF).
General Employees Retirement Fund
Total assets as of June 30, 2012 were $14.8 billion in
the GERF, an increase of $261 million or 1.8 percent
from the prior year. The primary reason for the increase
was an increase in securities lending collateral at the end
of the year.
Total liabilities as of June 30, 2012 were $1.24 billion,
an increase of $300 million from the prior year, mostly
due to a higher value of securities lending collateral on
the books at year end.
Total net assets, the difference between total assets
and total liabilities, decreased $39 million, less than 1
percent from the prior year. Ending net assets were
$13.6 billion on June 30, 2012.
Additions to Plan Net Assets
The reserves needed to finance retirement benefits
are accumulated through the collection of member and
employer contributions and through earnings on investments.
Total contributions and net investment income
for FY12 exceeded $1 billion.
Employer contributions and member contributions
increased from the previous year by a total of $21 million,
largely due to salary increases. Net investment
income totaled $320 million as the result of a 2.4 percent
rate of return in FY12.
Deductions from Plan Net Assets
Our largest expense was for retirement benefits to
members and beneficiaries. Total benefits increased 5
percent to $1 billion in FY12. The increase in benefits
resulted from an increase in the number of benefit recipients
and a 1 percent cost of living increase for most
retirees effective January 1, 2012.
Public Employees
Retirement Association
of Minnesota
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