Comprehensive Annual Financial Report - Minnesota State ...

Employer pension contributions for PERA
employees for the years ending June 30, 2012,
2011 and 2010 were $396,437, $378,770, and
$353,569 respectively, equal to the required
contributions for each year as set by state statute.
3. OPEB
Nearly all PERA employees are covered by
the State Employees Group Insurance Plan
(SEGIP) administered by the Department of
Minnesota Management and Budget. At present,
this plan subsidizes the cost of retiree
insurance by charging a single premium rate
for active employees and retirees, regardless
of underwriting experience. At June 30, 2012,
the SEGIP had an unfunded net obligation for
future benefits of $168,441,000 to be funded
on a pay-as-you-go basis. PERA’s allocated
portion of this liability is $51,000, which is
reported on the Statement of Plan Net Assets.
The difference between this year’s liability
and last year’s liability was expensed as an onbehalf
payment of fringe benefits.
4. Subsequent Events
As stated in Footnote B.8, revenue bonds
totaling $29 million were issued by the State
of Minnesota in June 2000 to finance the construction
of an administrative office facility
to house the three statewide retirement systems.
In August, 2012, the remaining bonds
were refunded with the proceeds of a new,
Fig 10. Remaining Revenue
Bond Repayment Schedule (In dollars)
Fiscal PERA
Year Principal Interest Total P & I
2013 $ 604,075 $ 157,738 $ 761,813
2014 573,050 182,391 755,441
2015 587,650 170,930 758,580
2016 600,425 159,177 759,602
2017 611,375 147,168 758,543
2018 624,150 134,941 759,091
2019 642,400 122,458 764,858
2020 651,525 109,610 761,135
2021 669,775 96,579 766,354
2022 684,375 83,184 767,559
2023 698,975 69,496 768,471
2024 673,425 41,537 714,962
2025 365,000 14,600 379,600
Totals $7,986,200 $1,489,806 $9,476,006
lower-interest rate bond issue. The new
bonds, issued by the State, are secured
by the value of the total assets of the
largest defined benefit plans in the statewide
retirement systems. Through the
issuance of the refunding bonds, which
received a AAA rating, the bond term has
been reduced by five years and the present
value of the savings to the retirement
systems is $9,582,538. The average coupon
of the refunded bonds was 5.903%
while the average coupon of the new
bonds is 2.743%.
Each of the three statewide retirement
systems share ownership of the facility
based on the amount of space used by
each system. MSRS will be taking over
more space in the building in fiscal year
2013, so PERA’s ownership share will
decrease from 37.6 percent to 36.5 percent
effective July 1, 2012.
Figure 10 shows the debt service
amounts for which PERA is directly
responsible based on the new bonds and
the new ownership percentage.
Financial Section
ll employees
A of the Public
Employees Retirement
Association are covered
by the GERF
Coordinated Plan and
eligible for benefits
under the provisions
of the plan.
Public Employees
Retirement Association
of Minnesota
39