Comprehensive Annual Financial Report - Minnesota State ...

of the value protected by the wrap contract.
The Fixed Income Account also includes a liquid
investment pool and a guaranteed investment
contract with fair values of $273,190,307
and $86,752,321 respectively.
SBI is exposed to credit risk through the
counterparties in foreign currency forward
contracts that are used to offset the currency
risk of a security. PERA’s proportionate share
of the maximum loss that SBI would have
recognized as of June 30, 2012 if all counter
parties failed to perform as contracted is
$1,347,324. These counter parties have S&P
ratings of A or better.
7. Capital Assets
Capital assets, generally assets with a cost in
excess of $30,000 and a useful life greater
than one year, are capitalized at the time of
acquisition at cost. Depreciation is computed
on a straight-line method over the useful life
of the related assets. The estimated useful
lives are three to ten years for furniture and
equipment.
PERA’s threshold for intangible assets is
$1,000,000. PERA did not have any intangible
assets in FY12.
Capital assets are presented on the June 30,
2012 Statement of Plan Net Assets at historical
cost, net of accumulated depreciation, as
summarized in Figure 6.
Fig 7. Remaining Revenue
Bond Repayment Schedule (In dollars)
Fiscal PERA
Year Principal Interest Total P & I
2013 $ 282,000 $ 503,083 $ 785,083
2014 291,400 487,573 778,973
2015 310,200 471,401 781,601
2016 329,000 454,029 783,029
2017 347,800 435,441 783,241
2018 366,600 415,616 782,216
2019 394,800 394,537 789,337
2020 413,600 371,836 785,436
2021 441,800 347,847 789,647
2022 470,000 321,891 791,891
2023 498,200 294,279 792,479
2024 526,400 265,010 791,410
2025 564,000 234,084 798,084
2026 592,200 200,949 793,149
2027 629,800 166,157 795,957
2028 676,800 129,156 805,956
2029 714,400 88,548 802,948
2030 761,400 45,684 807,084
Totals $8,610,400 $5,627,121 $14,237,521
8. Building and Land
Legislation was passed in 1999 allowing
PERA, the Minnesota Teacher’s
Retirement Association (TRA) and the
Minnesota State Retirement System
(MSRS) to purchase land and construct
a 140,000 square foot building to house
all three retirement systems. The systems
moved into the facility in September
2001. Ownership of the facility is prorated
based on the amount of square
footage each retirement system occupies
in the building. PERA’s ownership share
is 37.6 percent as of June 30, 2012.
PERA’s share of the cost to purchase the
4.3 acres of land was $170,308.
In June 2000 the State of Minnesota,
under the authority of the Commissioner
of Finance, issued revenue bonds totaling
$29 million on behalf of the three retirement
systems to pay for the construction
of the facility. Those bonds are backed
by the assets of the three retirement
systems, excluding assets in the Defined
Contribution Plans, and both principal
and interest payments are made by the
retirement systems using the same ownership
ratio to determine amounts. At year
end, PERA’s share of the bonds payable
(including one month of accrued interest
payable) is $8,651,441. We are depreciating
the facility over 40 years. PERA’s
share of bond issuance costs are shown
on the Statement of Plan Net Assets as
Deferred Bond Charges and are being
amortized over 30 years, the life of the
bonds. The bond repayment schedule
is shown in Figure 7.
9. Accrued Compensated Absences
PERA’s employees accrue vacation
leave, sick leave and compensatory
leave at various rates within limits
specified in collective bargaining
agreements. Accumulated amounts
for compensated absences are accrued
when incurred. Such leave is liquidated
in cash primarily at the time of
termination of employment. The total
liability at June 30, 2012 is $943,707.
Of this, $98,107 is considered a
short-term liability and $845,600 is
Financial Section
egislation was
L passed in 1999
allowing PERA, the
Minnesota Teacher’s
Retirement Association
(TRA) and the
Minnesota State
Retirement System
(MSRS) to purchase
land and construct a
140,000 square foot
building to house all
three retirement
systems. The systems
moved into the facility
in 2001.
PERA, the Teachers
Retirement
Association and the
Minnesota State
Retirement System
are depreciating the
jointly-owned facility
over 40 years.
Public Employees
Retirement Association
of Minnesota
35