Fiscal year Ended June 30, 2007 - psers

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January 18, 2008 The Retirement Board Public School Employees’ Retirement System of Pennsylvania P.O. Box 125 Harrisburg, Pennsylvania 17108 Ladies and Gentlemen: This report presents the results of the annual actuarial valuation of the Public School Employees’ Retirement System of Pennsylvania as of June 30, 2007. The valuation takes into account all of the promised benefits to which members are entitled as of June 30, 2007, including pension and survivor benefits; and as required by the Retirement Code is the basis for the contribution rate for fiscal year 2008/2009. The valuation was based on the actuarial assumptions and methods as adopted by the Board of Trustees, including a valuation interest rate of 8½% per annum compounded annually. The actuarial assumptions and methods for funding are unchanged from the prior valuation. The actuarial assumptions and methods for financial reporting meet the parameters set forth in Governmental Accounting Standards Board (GASB) Statements No. 25 and 43, and are unchanged from the prior valuation. The actuarial assumptions and methods for GASB 25 disclosure are the same as for pension funding, except that in fiscal years in which the amortization requirements of the PSERS code result in an equivalent single amortization period that is longer than 30 years, the GASB 25 amortization payment will be determined based on 30- year level-dollar funding. The Health Insurance funding provisions of the PSERS code differ from the GASB 43 disclosure retirements. For funding purposes the actuarial liability equals the assets in the health insurance account, and a contribution is determined that will assure the solvency of the account through the third fiscal year following the valuation date. For purposes of GASB 43 disclosure the Health Insurance actuarial liability and normal cost requirements have been determined under the entry age actuarial cost method, with 30-year level dollar funding. (The entry age actuarial cost method meets the GASB 43 parameters for determining actuarial liability and normal cost, and is the cost method specified by the PSERS code for the PSERS pension plan.)
The Retirement Board Public School Employees’ Retirement System of Pennsylvania January 18, 2008 Page 2 Assets and Membership Data The Retirement System reported the individual data for members of the System as of the valuation date to the actuary. While we did not verify the data at their source, we did perform tests for internal consistency and reasonableness. The amount of assets in the trust fund taken into account in the valuation was based on statements prepared for us by the Retirement System. Funding Adequacy The valuation results determine that the employer contribution rate for fiscal year 2008/2009 is 4.76%. As of June 30, 2007, the total funded ratio of the plan (for Pensions and Health Insurance combined) is 85.8%, based on the accrued liability and actuarial value of assets calculated under the funding requirements of Section 8328 of the Retirement Code. Financial Results and Membership Data Detailed summaries of the financial results of the valuation and membership data used in preparing the valuation are shown in the valuation report. The actuary prepared supporting schedules included in the Actuarial and Statistical Section of the PSERS Comprehensive Annual Financial Report (CAFR), and also prepared the trend data schedules included in the Financial Section of the CAFR. Qualified actuaries completed the valuation in accordance with accepted actuarial procedures as prescribed by the Actuarial Standards Board. The qualified actuaries are members of the American Academy of Actuaries and are experienced in performing actuarial valuations of public employee retirement systems. To the best of our knowledge, this report is complete and accurate and has been prepared in accordance with generally accepted actuarial principles and practice. Respectfully submitted, Janet Cranna, FSA Principal, Consulting Actuary S. Lynn Hill Director, Retirement Consulting Dana Spangher, FSA Director, Consulting Actuary JC/SLH/DS:pl THE PUBLIC SCHOOL EMPLOYEES’ RETIREMENT SYSTEM OF PENNSYLVANIA BUCK CONSULTANTS
Page 1: THE PUBLIC SCHOOL EMPLOYEES' RETIRE
Page 5 and 6: Page 1 Executive Summary This repor
Page 7 and 8: Page 3 Summary of Principal Results
Page 9 and 10: Page 5 Funded Ratio The financing o
Page 11 and 12: The following chart shows a ten-yea
Page 13 and 14: Page 9 GASB No. 43 Disclosure GASB
Page 15 and 16: Page 11 TABLE 1 SUMMARY OF RESULTS
Page 17 and 18: Page 13 TABLE 3 DETERMINATION OF HE
Page 19 and 20: Page 15 TABLE 5 DERIVATION OF ACTUA
Page 21 and 22: Page 17 TABLE 7 SCHEDULE OF FUNDING
Page 23 and 24: Page 19 TABLE 8b SCHEDULE OF EMPLOY
Page 25 and 26: Page 21 TABLE 10 HISTORY AND PROJEC
Page 27 and 28: Page 23 TABLE 12 DESCRIPTION OF ACT
Page 29 and 30: Page 25 TABLE 12 DESCRIPTION OF ACT
Page 31 and 32: Page 27 TABLE 13 SUMMARY OF BENEFIT
Page 33 and 34: Page 29 TABLE 13 SUMMARY OF BENEFIT
Page 35 and 36: EXHIBIT I Page 31 ACTIVE MEMBERSHIP
Page 37 and 38: EXHIBIT III Page 33 THE NUMBER AND
Page 39 and 40: EXHIBIT V Page 35 ANNUITANT AND BEN
Page 41 and 42: EXHIBIT VI (Continued) Page 37 10 Y
Page 43 and 44: TABLE 1 Page 39 THE NUMBER AND ANNU
Page 49 and 50: TABLE 3 (Continued) Page 45 THE NUM
Page 53 and 54:
TABLE 4 (Continued) Page 49 THE NUM
Page 55 and 56:
TABLE 5 (Continued) Page 51 THE NUM
Page 57:
EXHIBIT VIII Page 53 GLOSSARY (Cont
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Fiscal year Ended June 30, 2007 - psers

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