Comprehensive Annual Financial Report - Minnesota State ...

Actuary's Certification Letter
54
For the PEPFF, the following changes were recognized:
• The Minneapolis Police and Firefighter’s Relief
Associations were merged into the Police & Fire Plan
on December 30, 2011. The Virginia Fire and Fairmont
Police Relief Associations were merged into the Police &
Fire Plan on June 29, 2012. Unfunded liabilities will be
paid by Minneapolis and Virginia through future annual
amortization payments.
• Using the methodology outlined in MN statutes, the
amortization period was extended by 1 year.
For the PECF, the following changes were recognized:
• Mortality tables were changed to RP-2000 tables.
• The salary scale rates were adjusted to more closely
reflect actual experience.
• The payroll growth assumption was changed from 4.50%
to 3.75%.
• The form of benefit assumption for active married members
was adjusted.
• Retirement, termination and disability rates were adjusted
to more closely reflect actual experience. Select termination
rates of 25%, 20% and 15% were adopted for the
first three years of employment.
• Using the methodology outlined in MN statutes, the
amortization period was extended by 8 years.
In the aggregate, the basic financial and membership data
provided to us as of June 30, 2012 by the association office
appears reasonable in comparison to last year, and we have
relied upon the data as submitted in performing the actuarial
valuation and preparing trend data schedules. The
actuarial cost method and the assumptions related to asset
valuation, investment return, earnings progression and
active member payroll growth are specified by state statute.
All other assumptions are based on actual experience
with changes recommended by the actuary, adopted by the
PERA Board, and approved by the Legislative Commission
on Pensions and Retirement (LCPR).
Public Employees
Retirement Association
of Minnesota
(Continued)
To the best of our knowledge and belief, the valuations
were performed in accordance with generally accepted
actuarial principles and procedures, current GASB pronouncements,
the requirements of Minnesota Statutes,
Section 356.215, and the requirements of the Standards
for Actuarial Work established by the LCPR. In our
opinion, the results of the reports reflect the actuarial
position of the plans on an ongoing basis under the
prescribed assumptions, methods, and procedures.
The undersigned credentialed actuaries meet the
Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained in
this report. In addition, Mr. Murphy meets the requirements
of “approved actuary” under Minnesota Statutes,
Section 356.215, Subdivision 1, Paragraph (c). The signing
actuaries are independent of the plan sponsor. We
are not aware of any relationship that would impair the
objectivity of our work.
Respectfully submitted,
Brian B. Murphy, FSA, EA, MAAA
Bonita J. Wurst, ASA, EA, MAAA
BBM/BJW:sc