Comprehensive Annual Financial Report - Minnesota State ...

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Summary of Actuarial Assumptions and Methods (Continued) 56 Public Employees Correctional Fund Actuarial Cost Method Entry Age Normal, with costs allocated as a level percentage of payroll. Actuarial gains (losses) reduce (increase) the unfunded actuarial accrued liability. (1999) Actuarial Assumptions 1. Mortality a. Active RP 2000 nonannuitant generational mortality table, white collar adjustment (2012) b. Retired RP 2000 annuitant generational mortality table, white collar adjustment (2012) c. Disabled RP 2000 disabled mortality table. (2012) 2. Retirement Age Age related table from age 50 to 70. (1999) 3. Disability Graded rates. (1999) 4. Termination Graded rates. (1999) 5. Allowance for Prior year expenses expressed Expenses as a percentage of prior year payroll. (1999) 6. Earnings Progression Age related table incorporating a 3% base inflation assumption. (2012) 7. Active Member 3.75% per year. (2012) Payroll Growth 8. Investment Return 8.0% compounded annually FY 2013-2017, 8.5% thereafter (2012) 9. Retiree COLA 2.5% per year. (2011) Asset Valuation Method Fair market value smoothed over 5 years. (2008) Public Employees Retirement Association of <strong>Minnesota</strong> Minneapolis Employees Retirement Fund Actuarial Cost Method Entry Age Normal, with costs allocated as a level percentage of payroll. Actuarial gains (losses) reduce (increase) the unfunded actuarial accrued liability. (1960) Actuarial Assumptions 1. Mortality a. Active RP 2000 healthy sex distinct annuitant mortality table, white collar adjustment, projected to 2018. (2010) b. Retired RP 2000 healthy sex distinct annuitant mortality table, white collar adjustment, projected to 2018. (2010) c. Disabled RP 2000 healthy sex distinct annuitant mortality table, white collar adjustment, reduced by 20%. (2010) 2. Retirement Age 61 years, or if older than age 61, one year from the valuation date. (1984) 3. Disability Graded rates. (1985) 4. Termination Graded rates. (1985) 5. Allowance for Prior year expenses increased by Expenses 4% and expressed as a percentage of prior year payroll. (1991) 6. Earnings Progression Total reported pay for prior calendar year increased 1.98% to prior fiscal year and 4% annually for each future year. (1991) 7. Active Member — Payroll Growth 8. Investment Return 8.0% compounded annually FY 2013-2017, 8.5% thereafter (2012) 9. Retiree COLA 1% per year until the fund is 90% funded, then 2.5% per year. (2010) Asset Valuation Method Market Value. (2008)
Other Assumptions Separation GERF uses Select Table for first three years. Year Percent Year Percent Year Percent 1 40% 2 15% 3 10% PEPFF also uses Select Table for first three years. Year Percent Year Percent Year Percent 1 8% 2 5% 3 3.5% PECF also uses Select Table for first three years. Year Percent Year Percent Year Percent 1 25% 2 20% 3 15% Annuity Selection Married members are assumed to elect the following forms of annuities: General Employees Retirement Fund Benefit Option (% chosen) Gender Single-life 25% 50% 75% 100% Male 40% 5% 15% 10% 30% Female 70 5 5 5 15 Public Employees Police and Fire Fund Benefit Option (% chosen) Gender Single-life 25% 50% 75% 100% Male 15% 10% 20% 20% 35% Female 60 5 15 5 15 Public Employees Correctional Fund Benefit Option (% chosen) Gender Single-life 25% 50% 75% 100% Male 40% 5% 10% 10% 35% Female 80 5 5 5 5 Minneapolis Employees Retirement Fund Benefit Option (% chosen) Gender Single-life 25% 50% 75% 100% Male 100% Female 100 Salary Increases Actuarial Section The General Employees Retirement Fund (GERF) and the Public Employees Police & Fire Fund (PEPFF) use salary increase tables based on years of public service, as follows: Yrs. of Salary Increase Service GERF PEPFF 1 12.03% 13.0% 2 8.90 11.0 3 7.46 9.0 4 6.58 8.0 5 5.97 6.5 6 5.52 6.1 7 5.16 5.8 8 4.87 5.6 9 4.63 5.4 10 4.42 5.3 11 4.24 5.2 12 4.08 5.1 13 3.94 5.0 14 3.82 4.9 15 3.70 4.8 16 3.60 4.8 17 3.51 4.8 18 3.50 4.8 19 3.50 4.8 20 3.50 4.8 21 3.50 4.7 22 3.50 4.6 23+ 3.50 4.5 Family Composition GERF: 75% of males and 70% of females are married. Beneficiary for males is 3 years younger, beneficiary for females is 2 years older. PEPFF: 85% of males and 65% of females are married. Beneficiary for males is 3 years younger. Beneficiary for females is 4 years older. PECF: 85% of members are married. Wives are 3 years younger than husbands. MERF: 67% of members are married. Wives are 3 years younger than husbands. Public Employees Retirement Association of <strong>Minnesota</strong> 57
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Pink Lady Slipper, Minnesota State
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Board of Trustees Don Rambow — Bo
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Achievement Awards President's Repo
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Achievement Awards GFOA The Governm
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December 27, 2012 Board of Trustees
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Economic Conditions and Outlook Alt
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National Recognition PERA has an ou
Page 15 and 16: Ross E. Arneson General Membership
Page 17 and 18: The Public Employees Police and Fir
Page 19 and 20: Pre-Age 62 Increase — This pensio
Page 21 and 22: Legislative Auditor’s Report Mana
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Page 25 and 26: Financial Highlights å PERA’s Ne
Page 27 and 28: made in 2010 and contribution rate
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Page 31 and 32: Statewide Public Employees Agency F
Page 33 and 34: Financial Section Minneapolis Emplo
Page 35 and 36: facilities. Elected officials and a
Page 37 and 38: are recognized as revenues when due
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Page 43 and 44: age of pay, and are specified in st
Page 45 and 46: Employer pension contributions for
Page 47 and 48: Schedule of Employer Contributions
Page 49 and 50: Source of Expenses Schedule of Inve
Page 51 and 52: Investment Report Investment Result
Page 53 and 54: Investment Report MINNESOTA STATE B
Page 55 and 56: 25% 20% 15% 10% 5% 0% -5% -10% -15%
Page 57 and 58: Investment Summary at Fair Value Fo
Page 59 and 60: SBI & Consultants: State Board of I
Page 61 and 62: Actuary’s Certification Letter Su
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Page 65: General Employees Retirement Fund A
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Page 71 and 72: Public Employees Correctional Fund
Page 75 and 76: Public Employees Correctional Fund
Page 77 and 78: Introduction Schedule of Changes in
Page 79 and 80: Introduction December 14, 2012 Publ
Page 81 and 82: Statistical Section 2007 2008 2009
Page 87 and 88: Fire Department Statistical Section
Page 91 and 92: Statistical Section Schedule of New
Page 93 and 94: General Employees Retirement Fund S
Page 95 and 96: Schedule of Benefit Recipients by T
Page 97 and 98: Top 10 States by PERA Annuitant Pop
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Page 101 and 102: ISANTI ISLE IVANHOE JACKSON JANESVI
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Page 107 and 108: BROOKLYN CENTER ISD-286 BROOTEN ISD
Page 109 and 110: VILLARD ISD-615 VIRGINIA ISD-706 WA
Page 111 and 112: CROW WING COUNTY SWCD CURRIE DUVRAY
Page 113 and 114: 2012 Comprehensive Financial Report
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