a complete copy of the 2012 CAFR Report! - PSERs

FINANCIAL SECTION
Notes to Financial Statements (continued)
The following is a summary of the members receivables at
June 30, 2012 and 2011:
(Dollar Amounts in Thousands)
2012 2011
Pension:
Member contributions $ 76,202 $ 80,117
Purchase of service 202,271 212,431
Other 6,092 7,900
Total Members Receivable $ 284,565 $ 300,448
(K) Adoption of New Accounting Standards
During the year ended June 30, 2011 the System adopted
GASB Statement No. 59, Financial Instruments Omnibus,
which was issued to update and improve existing standards
regarding financial reporting and disclosure requirements
of certain financial instruments.
In June 2011 GASB issued GASB Statement No. 64
(GASB 64), Derivative Instruments: Application of Hedge
Accounting Termination Provisions – an amendment of
GASB Statement No. 53. GASB 64 became effective during
FY 2012 and was issued to provide government entities
guidance to enhance comparability and improve financial
reporting by clarifying the circumstances in which hedge
accounting should continue when a swap counterparty or
a swap counterparty’s credit support provider is replaced.
Upon examination of the provisions of GASB 64, it was
determined to have no current impact on PSERS.
(A) State Accumulation Account
The State Accumulation Account is credited with the
contributions of the Commonwealth and the employers.
Additionally, interest earnings of the System (after
crediting the Members’ Savings Account with 4% interest
and the reserve for retirement with 5.50% statutory interest)
are credited to this account. Each year, the necessary
amounts, as determined by the actuary for the payment of
retirement, disabilities, and death benefits, are transferred
from the State Accumulation Account to the Annuity
Reserve Account increasing the reserve credit to the 7.50%
valuation assumption rate determined by the actuary. All
administrative expenses necessary for the operation of the
System, except for premium assistance and HOP expenses,
are paid from the State Accumulation Account.
(B) Members’ Savings Account
The Members’ Savings Account is credited with all
contributions made by active members of the System.
Interest is added to the member’s individual account at an
annual rate of 4%.
Upon death or retirement of a member, the accumulated
contributions plus interest are transferred to the Annuity
Reserve Account for subsequent payment of benefits.
3. Description of Accounts
The Code requires the System to maintain the following
accounts which represent reserves held for future and
current benefit payments as follows:
(Dollar Amounts in Thousands)
2012 2011
Pension:
State Accumulation Account $ (13,746,778) $ (5,704,296)
Members’ Savings Account 12,535,442 12,242,308
Annuity Reserve Account 49,745,132 44,661,982
$ 48,533,796 $ 51,199,994
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Postemployment healthcare:
Health Insurance Account $ 93,753 $ 111,258
Health Insurance Program Account 136,030 121,929
$ 229,783 $ 233,187
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