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GOVERNMENT EMPLOYEES RETIREMENT SYSTEM OVERVIEW OF OPERATIONS th ey 16 Je Anniversary” “: October 1, 1959 - October 1, 2009 = 7 the Government of the Virgin Islands Contributing today, for a better tomorrov Presented to the Committee on Appropriations and Budget of the Twenty-Eighth Legislature of the Virgin Islands Presented By Austin L. Nibbs, CPA Administrator Earle B. Ottley Legislative Hall August 5, 2009 9:00 A.M Charlotte Amalie, St. Thomas USVI Government Employees Retirement System August 5, 2009 Overview of Operations Page 2 GOVERNMENT EMPLOYEES RETIREMENT SYSTEM Overview of Operations — Fiscal Year 2009 TABLE OF CONTENTS Te Cele [0 (el (0) ce 3 Accomplishments for Fiscal Year 2009..........00. 00. cccccc ccc ecc ccc cec eee ceeceuceu eee tenesuenes 5 Membership 2.0.0.0... . eee cee cece ce cee cee cee cee ceuessueseusssceeceeuceeseuseueeanerietssetanseateas 6 Benefit Payment 0.2.2.0... ccc ccc ccc cce cee ccc ccu seu cuesuusaeaeseeeeseusescesteseesenscees 6 Cost of Living Adjustment/Annual Bonus .................. 0c. ccc ceeceeceecceceeceeeceucereeeees 7 COntriDUtIONS 20... cece ce ccc cee ccc cee eee ese sea seecaesaeseeaetueeesensnesteseeseeseesens 7 Actuarial Valuation Information ..............0..0..ccccccccceceeceeceeceseneaeeseeseeseuseuseaeeuss 8 Health of the System ...... 0... ccc ccc ccc cee cee cce cee ececesuveuvenessesenntseraeteeeenrsaes 9 GERS Summit 000.0. c cece ee cae ceases ccseecueeussaesuaerseeaeeaeceeeeeeeuesetstsaeeaess 10 INVESEMENES 2.0... e cece cece acca cee cee eceueecuese sue seaeeeceeeteceseuesanssesssteneeeeeenes 10 LOANS ooo cece cece ec ee eee cee cee eee eee cea sca eeuseesaesaeseeaeeaetueenseeeectueeateuseueeeeenns 11 Real Estate 2.0.0... ccc ccc ccc cece esue see cee ces cesuseueseeeereeneaetaaseaseeeeeaesennens 12 Technology Upgrade ........ 0... ccc cec cee ceecce cee cec ccc cecuseueceessueeeeeeeeeateseseuseuteanneas 14 Annual Financial Audit..... 00.000... ccc ccccccceecaecce cee ceeveseeeuseessaeeaussintuasseneeresens 14 Projected Goals and Objectives for Fiscal Year 2010...............cccccccceceecceceeeceuees 15 Reform Act/Tier Il and Recommendations ..........0. 000.00. ccccecce ccc eceeccuceuueeeseuseeeces 16 SUMMALY... eee cee cee cee cee eee eee cee see eeeneesusseeuecuseeeeseuseeaeeauecenseateesaeseutnenans 17 Appendices Investment Manager Asset Allocation.............0..00...cccceeccccccueecueeeseeuecssaseeueeeuaeeencs Exhibit A Loans Portfolio — June 30, 2009 20.0.0... 00. cccecceeceeceu cen eeeececeeceeuseuteesteneeeess Exhibit B Treasurer's Report (Statement of Cash Flows — June 30, 2009)....00.. 0000. ccececeecee eee Exhibit C Schedule of Budget vs. Actual — Fiscal Year 2009 .00...00. 000... cceceeccccececee cesses eeeaes Exhibit D Schedule of Administrative Expenses — Fiscal Year 2009 ...0.......0...cecceeccceeeceecceuee Exhibit E Government Employees Retirement System August 5, 2009 Overview of Operations Page 3 GOVERNMENT EMPLOYEES RETIREMENT SYSTEM OVERVIEW OF OPERATIONS Good morning, Honorable Senator Carlton “Ital” Dowe, members of the Committee on Appropriations and Budget and other distinguished senators who are present in the chambers. | am Austin L. Nibbs, Administrator of the Government Employees Retirement System of the Government of the Virgin Islands (GERS). Appearing with me today is senior management and staff. Mr. Chairman, before | begin my presentation | would like to extend my appreciation to the Committee for approving my request for rescheduling our appearance before the Committee. | felt the extension was needed in order to adequately prepare and respond to the requirements that were requested. | note that this report is a compilation of nine months of activity covering the period of the three quarters for fiscal year October 1, 2008 through June 30, 2009. INTRODUCTION The GERS was enacted by the Third Legislature of the Virgin Islands on June 24, 1959 by Act 479, which created the Employees Retirement System as a defined benefit pension plan. On October 1, 1959, the System started operations and contributions by employees and the plan sponsor began. The statutory mandate of the GERS is to enroll employees into the System within thirty (30) days of service, as a condition of their employment. The objective of the GERS is to encourage employees who enter the System to remain in the service of the government by establishing an orderly means whereby those members who became superannuated or incapacitated as a result of disability may retire without suffering economic hardship. The GERS has met this mandate. However, for the System to continue to meet its statutory obligations to its members, it must be actuarially funded. Government Employees Retirement System August 5, 2009 Overview of Operations Page 4 This year will mark the 50" anniversary of the System, which makes the System one of the oldest pension systems under the U.S. Flag. Just to compare how old our System is, the largest public pension system Public Employees’ Retirement System of the State of California known as CALPERS, was created on January 1, 1932, twenty-seven (27) years before the GERS was created. The System was originally combined with the Division of Personnel and was separated in 1987. In the year of our 50" anniversary, | would like to publicly thank those individuals who have served as the Administrator of the System from the inception in 1959. They are: e Victor Ebbesen 1959 - 1967 e Albert Hugh 1967 - 1972 e Leslie Millin 1972 - 1986 e Joseph Aubain 1987 - 1990 e George Goodwin 1991 - 1993 e Claude “Tappy” Molloy 6 months in 1993 e Laurence E. Bryan 1994 - 2004 e Willis C. Todmann 2004 - 2007 | would also like to acknowledge and thank the following individuals that have served as the Acting Administrator: e A. Cecelia Cruse e Ellen Boschulte Murraine e Cecilia Senthill-Harrigan e Joanne U. Barry Government Employees Retirement System August 5, 2009 Overview of Operations Page 5 ACCOMPLISHMENTS for Fiscal Year 2009 The major accomplishments during fiscal year 2009 are: Issued the Fiscal Year 2007 Annual Financial Audit and completed the Fiscal Year 2008 Annual Financial Audit which is scheduled to be issued by September 15, 2009. Upgraded the computer network wiring to category 6 gigabit standard. Updated and replaced desktop PC platform of GERS with new up-to-date computers. Implement On-Site Customer Service for GERS members and retirees on St. John. Increased the number of direct deposit by 275. Developed an integrated Power Point Presentation for the New Employee Orientation. Resumed construction of GERS Complex on St. Croix. Selected contractor to redesign the web-site. Completed imaging of all member back file records and implemented day forward imaging of member records in real-time. Completed the review and analysis of Title 3 Chapters 27 and 28, including the Reform Act and Tier Il. Implemented Track-It a metric-based technical support tool used for performance monitoring. Completed the installation of the forced placed insurance program. Government Employees Retirement System August 5, 2009 Overview of Operations Page 6 MEMBERSHIP A snapshot of the overall membership in the System from fiscal year 1982 through June 30, 2009 is as follows: Ratio of Year Active Retirees & Actives Total Members | Beneficiaries to Members Retirees 1982 8,914 1,360 6.55 to 1 10,174 1987 10,466 2,338 4.47 to 1 12,804 1991 11,766 2,901 4.05 to 1 14,677 1993 11,642 3,473 3.35 to 1 15,115 1994 12,116 3,751 3.23 to 1 15,867 1997 11,572 4,682 2.47 to 1 16,254 1999 10,763 6,212 1.73 to 1 16,975 2001 | 9,303 | 5,581 =| 1.66to1| 14,884 _— 2002 11,352 5,938 1.91 to1 17,290 2003 10,555 6,052 1.74 to 1 16,607 2004 9,362 6,258 1.49 to 1 15,620 2005 9,967 6,484 1.54 to 1 16,451 2006 9,841 6,731 1.46 to 1 16,572 00 0 6,8 6 O 8.018 008 O6 6,926 60 to 99 009 08 4 O 8 6 The membership numbers show that the gap between the active and retired members is closing. There is a 1.55 to 1 ratio between the active members and the retirees and beneficiaries. This is of great concern to the System because of potential decrease in contributions if there is a mass exodus of employees from the system without immediate replacements. BENEFIT PAYMENTS As reflected in the chart above, the number of retirees and beneficiaries continues to increase which results in benefit payments steadily increasing. In 1991 benefit payments were Government Employees Retirement System August 5, 2009 Overview of Operations Page 7 approaching $55 million, while for fiscal years 2007, 2008 and the 9 months of 2009, benefit payments were $158.9 million, $161.7 million and $127.3 million respectively. Of the 7,141 retirees and beneficiaries in the System, 6,009 retirees or 84% are residents of the Virgin Islands. With the projected benefit payments approaching $180 million this represents a significant infusion of cash that impacts the economy of the Territory annually. COST OF LIVING ADJUSTMENT (COLA) AND ANNUAL BONUS On July 15, 2009, 5,744 retirees were paid their annual 1.5% (COLA) totaling $75,353 (annualized amount $1,808,472). The COLA was paid to those retirees who are age 60 and have been receiving a service annuity for at least 1 year. In accordance with Bill No. 28-0020 (Act No. 7070) which was passed by the Legislature on May 29, 2009 and signed into law by the Governor on June 24, 2009 provided for the Virgin Islands Lottery to make an annual payment to the GERS by July 15" of not less than $2,270,000 to be paid by September 30" as a bonus to annuitants and pensioners who are not less than 60 years of age, and have been receiving a service annuity for at least 1 year, and is eligible to receive a cost of living increase by July 15 of the year in which the bonus payment is made. On July 31st, we received the check from the V.I. Lottery in the amount of $2,270,000. Therefore, on or before September 30 2009, 5,744 retirees will receive $395.19. CONTRIBUTIONS The current combined contribution rate is 25.5% of total payroll. The current combined rates are not sufficient to meet the 43% of payroll cost of the System, which is the amount necessary to maintain the operations of the retirement benefit structure on an actuarial reserve basis, as mandated by the provisions of the Virgin Islands Code. To meet the full actuarial costs, Government Employees Retirement System August 5, 2009 Overview of Operations Page 8 the contribution rates must be increased so that in total, the System would have to receive additional contributions of 17.5%, in order to meet the 43% of payroll cost of the System. The outstanding employer's contributions (excluding delinquency fee and interest) due to the GERS from the central government and other government agencies for fiscal year 2009 through June 30, 2009) are as follows: Regular 3% Total Central Government $ - $ - $ - Instrumentalities - 1,497,278 1,497,278 Total $ - $1,497,278 $1,497,278 The contributions due from the Central Government are current to date. The contributions due from the instrumentalities are current except for the V.!. Water and Power Authority, the University of the Virgin Islands and other instrumentalities which owe the additional 3% (14.5% to 17.5%) in the amount of $916,190, $450,497 and $130,591 respectively. ACTUARIAL VALUATION INFORMATION Title 3, Chapter 27, Section 718 (a) of the Virgin Islands Code mandates that the Employees Retirement System of the Government of the Virgin Islands be financed on an “actuarial reserve basis.” An “actuarial reserve basis” generally means that the retirement benefits are funded during employees active years of employment so that by the time they retire, the benefits would have been fully funded in advance of their retirement date. The actuarial valuation, which is conducted by the System's Actuary, determines the contribution rate necessary to meet the cost of benefits being accrued and a corresponding amount to pay down a portion of the unfunded liabilities. The most recent actuarial valuation estimate as of September 30, 2006 was determined by The Segal Company. The Actuary will be issuing a certified actuarial valuation report as of Government Employees Retirement System August 5, 2009 Overview of Operations Page 9 September 30, 2006 very shortly. The System’s estimated unfunded accrued liability (UAL) based on the last actuarial valuation at September 30, 2006 is estimated to be $1,237 million. The estimate as of September 30, 2006 shows that the current statutory employer and employee contribution rates are not sufficient to meet the cost of funding the System on an actuarial reserve basis, as required by law. The UAL is estimated to be $1,543 million at September 30, 2008 and $1,638 million at June 30, 2009. HEALTH OF THE SYSTEM From 1959 through 1989, there was no substantial payment of annuities because, for the most part, few members were not eligible to retire. There were no deficits, and contributions and investment returns exceeded the benefits paid out. Since 1996 the GERS has not been in good health and its health continues to deteriorate. This is the year that the System went from a positive net cash flow to a negative net cash flow, where benefits and expenses exceeded contributions. This trend has continued up to today which results in approximately $60 million negative cash flow annually. Without a significant cash infusion and or increases in the contribution rates, our Actuary has predicted that the System will run out of assets in the next 14-19 years. The Actuary has also predicted that in the next 14-19 years the benefits payments and expenses will exceed 50% of payroll and increasing each year thereafter. What the GERS is experiencing is not unique. This is typical of any “mature system”. However, for the plan sponsor to continue to delay addressing the root causes of the problems facing the System will cause the following: e The unfunded liability to increase e Benefits payments to the retirees to continue to exceed the contributions received by approximately $60 million - $80 million annually. Government Employees Retirement System August 5, 2009 Overview of Operations Page 10 e The actual employer contributions not keeping pace with the annual employer required contributions. e Actuarially required amounts increasing in future years to make up for current and prior years’ contribution deficits. e The unfunded actuarial liabilities of the plan continuing to increase significantly over time. e Acontinual decrease in the “funding ratio”, (the amount that measures the progress being made towards the funding of benefits accruing from year to year). GERS SUMMIT On July 1, 2009, the Governor hosted a summit the objective being to engage serious discourse on the problems of the GERS that have been lingering for many years. On July 7, 2009 a follow up meeting was held with the Governor and his senior staff, the Senate President, the Division of Personnel and the GERS. The decision made at this meeting is that the implementation of the Reform Act and Tier II will go forward with an effective date of January 1, 2010. Within the next 30 — 45 days, the System will be proposing amendments to the Reform Act and Tier Il, and recommending new legislation to decrease the unfunded liability and prevent a mass exodus of employees retiring at the end of the year, because of the implementation of the Reform Act on January 1, 2010 as it relates to the payment of contributions on excess annual and sick leave for credited service after December 31, 2009. INVESTMENTS The investment fund portfolio is managed with the specific goal to grow the assets to meet the System’s pension liability and ensure a reliable cash flow that provides for the funding requirements of near-term pension obligations. To achieve these goals, the Board allocates the Fund’s assets to a variety of asset types and strategies in consultation with the Investment Consultant. Generally, equity investments are included for their long-term return and growth Government Employees Retirement System August 5, 2009 Overview of Operations Page 11 characteristics, and fixed income assets are added for their ability to control investments risk and provide for a reliable cash flow that meets the System's funding requirements. The Fund’s successful long-term performance confirms the importance of asset diversification and controlling investment risk within each asset class. Because of the volatility in the market, over the past 21 months the System's portfolio value decreased from a high of $1,312 million at October 1, 2007 to a low of $1,019 million at June 30, 2009, a decrease in value of approximately $293 million. This is not unique for the GERS. Every institutional investor experienced significant declines in the value of their portfolio. The System has experienced this type of volatility in the past. Between 2000 and 2002, there was a reduction of approximately $200 million in the portfolio value. On the other hand, between 2002 and 2006 the portfolio value increased by $340.5 million. We are committed to a disciplined investment strategy that focuses on long-term results. We are presently reviewing proposals to invest locally in a few non-traditional and alternative investment projects. We are exploring potential alternative investment opportunities within the Virgin Islands and the region with expected rate of return that far exceeds our benchmark of 8%. The System’s investment fund is presently managed by 14 investment managers. A schedule of the Investment Fund which includes all of the funds invested with the various investment managers is presented as Exhibit A. LOANS In addition to providing regular retirement benefits, the System also provides personal, auto, land and mortgage loans to qualified members and retirees. The loan portfolio brings in revenues to the System of approximately $10 million annually in interest income. We are proud to provide this service to our members some who would not be able to obtain credit to better Government Employees Retirement System August 5, 2009 Overview of Operations Page 12 their standard of living if this service was not available to them. The number of loans granted for fiscal year 2009 through June 30, 2009 as shown below: Loan Category Units Dollar Value Personal Loans 4,353 | $82,586,105 Auto Loans 3 49,060 Mortgage Loans 4 391,000 Land Loans 1 29,700 Retiree Loans 307 2,932,975 The total loan portfolio as of June 30, 2009 is $128,816,407 and is presented as Exhibit B. REAL ESTATE (A) GERS Complexes The System owns the GERS Complex on St. Thomas, which is the location of the GERS’ principal place of business. The tenants are the Division of Personnel, the Department of Justice, Rescare (Job Corp) and First Bank. GERS also owns an additional 2.9 acres located at Parcels No. 5 and 6 Estate Orange Grove, St. Croix, which houses the St Croix Branch Office operations and the Casino Control Commission. The tenants with outstanding rents and electricity as of June 30, 2009 are as follows: Rent Electricity Late Charges Total Division of Personnel $407,952 $122,272 * $530,224 Department of Justice 324,379 371,498 167,647 863,524 $732,331 $493,770 $167,647 $1,393,748 *(Forgiven during negotiations) Government Employees Retirement System August 5, 2009 Overview of Operations Page 13 The construction of the new St. Croix Complex is underway with a scheduled completion date of February 2010. The new complex will house a 22,000 square foot two-story building which will augment the existing facilities now located on the site. In late 2006, the System purchased 120 acres of land at Estates Hoffman and Nullyberg on St. Thomas. This purchase was made primarily as an additional real estate investment for our members. Our Architect has done a conceptual drawing on the best comprehensive use for this land, and has engaged consultants to conduct environmental studies, in addition to, marketing and feasibility studies for best use, in preparation for request for zoning change. The Development Committee is presently reviewing different options for use of this property. (B) Havensight Shopping Mall The Havensight Shopping Mall, a premier tourist destination commercial shopping center in St. Thomas, is the gem of the Caribbean and has been one of the best investments for the System. This property was purchased on June 30, 1993, for $32 million. In November 2006, the mall was appraised at $80 million. An appraisal is presently being performed to determine a more current appraised value. In prior years, we have received approximately $3.7 million in net dividend payments from the mall. However, we are mindful of the potential loss in dividend payments in fiscal years 2009 and 2010 due to the 25% reduction in rents to the tenants. The dividends received from the Havensight Mall are a vital component of our overall budget. The Board will continue to discuss with WICO the steps that may be needed to protect this vital investment. We encourage the members of the System to visit and patronize the businesses renting in this facility that is PROUDLY OWNED BY THE GOVERNMENT EMPLOYEES RETIREMENT SYSTEM. Government Employees Retirement System August 5, 2009 Overview of Operations Page 14 TECHNOLOGY UPGRADE We are in the 16" month of a 39 month implementation of a comprehensive retirement system software solution known as V3. The objective of this software implementation is to merge the GERS'’ current benefits and loan administration systems into a state-of-the-art, web-based, business solution that provides the technology foundation to enable and sustain the business agility of the GERS in addition to being fully integrated with the central government and other government instrumentalities that interface with the GERS. The project consists of three rollouts (phases): > Rollout 1: Digital Conversion of GERS’ member files > Rollout2: V3 Imaging and Line of Business Implementation > Rollout3: V3 Self-Service Implementation We are currently in the Rollout 2 phase. When the software is fully implemented, customer service to retirees, active government personnel and the public-at-large will be greatly enhanced through the ability of V3 to facilitate electronic, web-based transactions and communications. Other expected results of this upgrade are: Online loan applications and payments Ability for members to estimate benefit calculations Improved ability of GERS to produce member statements Improved data quality and security Digitized member data for improved access, retrieval and protection Greatly reduced processing time for requested services Improved identification of receivables from government agencies Improved work flow tracking and processes VVVVVVVV ANNUAL FINANCIAL AUDIT The System’s most recent audited financial statements by Bert Smith & Company are as of September 30, 2007. The auditors have completed the fieldwork for the audit of the financial Government Employees Retirement System August 5, 2009 Overview of Operations Page 15 statements for the year ended September 30, 2008. These financial statements are expected to be issued by September 15, 2009. We are mindful of the amount of repeat findings. As a professional accountant and a former auditor, | do not take these finding lightly. We are vigorously addressing those issues that are low hanging fruits that can be corrected in real time. This accounts for approximately 50% of the findings. The other 50% of the findings will go away when the new financial system is implemented. PROJECTED GOALS AND OUTCOMES FOR FISCAL YEAR 2010 e To develop a comprehensive long range Strategic Plan for the System. e To decrease the period of time to issue the annual certified financial statements and the annual report. e To complete the recalculation of retiree’s annuity payments. e To improve on the timeliness of processing member benefits. e To provide timely and accurate information to our members. e To continue to promote direct deposit for retiree’s annuity payments. e To provide members with educational services in Estate Planning and Financial Services to assist them with planning and managing their retirement. e To develop a coordinated communications effort to include production of a system quarterly newsletter and workshops concerning GERS’ benefits and processes. e To continue to provide system-wide customer service training in order to decrease the number of complaints reported by the members. e To continue to improve on the technology infrastructure to support the internal and external operations. e To complete the elevator refurbishing project, install a public announcement (PA) system for emergency purposes and develop a refurbishing plan to address energy saving measures in our buildings. Government Employees Retirement System August 5, 2009 Overview of Operations Page 16 e To continue the implementation of the new loans and benefits software which will improve the delivery of services to the members of the System. e To procure a new accounting system software that will be integrated with the new benefits and loans software. e To continue to increase oversight of the investment managers performance. e To begin the implementation of Act No. 6794 (The Retirement System Reform Act of 2005) and amendments Act No. 6905 and Act No. 6917. REFORM ACT/TIER Il AND RECOMMENDATIONS As indicated earlier in my presentation, the System will go forward with the implementation of the Reform Act and Tier Il on January 1, 2010. In order to slow the increase in the unfunded liability, we will be recommending new legislation and amendments to existing legislation as follows: NEW LEGISLATION We are aware that approximately 900 employees will be eligible for retirement at December 31, 2009. If these employees were to leave government service in mass, this would result in approximately an $11.5 million reduction in the contribution base of the GERS. Therefore, we are proposing the introduction of a Deferred Retirement Option Program (DROP) that would be limited to those employees who are eligible to retire as of December 31, 2009, and have excess annual and sick leave that can be credited to their years of service through December 31, 2009. The DROP provides an employee with an alternative method of payment of their retirement benefits for a specified and limited period. Under the proposed DROP, the employee will have to select a participation period between 2 — 5 years. The employee will continue to work and receive the same salary as if they did not retire. At December 31, 2009, the employee will stop earning service credit toward a future benefit. Their retirement benefit will be calculated from the time the DROP period begins which will be Government Employees Retirement System August 5, 2009 Overview of Operations Page 17 January 1, 2010. Their monthly retirement benefits will begin to accumulate in a Trust Fund earning monthly interest equivalent to an annual rate to be determined by the System. Upon the expiration of the participation period selected by the employee (i.e. 2 years), the employee will leave government service and receive a lump sum payment of their monthly annuity payments that were accumulated for 2 years plus interest, and thereafter continue to receive their regular monthly annuity payments. The purpose of our proposal is to continue to maintain the contribution base until the central government can develop and implement a succession plan. It is our intent that this option will be extended to the semi-autonomous and autonomous agencies. AMENDMENT TO EXISTING LEGISLATION We will be proposing an increase in the compensation cap from $65,000 to mirror the annual social security cap. The present social security cap is $106,000. Based on approximately 1,200 employees that are earning in excess of $65,000, the annual increase in the expected annual employer and employee contributions will be approximately $2.6 million. Both proposals are being reviewed by our Actuary. SUMMARY The objective of the System is to fund the Plan to meet long-term benefits promised to its members and retires. Not funding the Plan on an actuarial reserve basis creates significant problems for the System. The lack of a consistent funding plan places a strain on the System's investments to meet future pension benefit obligations. Therefore, adequate funding of the Plan is vital for the future survival of the Plan for the benefit of the members, retirees and the beneficiaries. Government Employees Retirement System August 5, 2009 Overview of Operations Page 18 On September 2", 3%, and 4"", the Board of Trustees and staff will meet with all of our investment managers to review their performance. We invite members of this Committee and the general public to attend. Mr. Chairman, this concludes my presentation. We are prepared to respond to any questions the Committee on Appropriations and Budget may have on the operations of the GERS. jeroueul4 SJOSIADY eer eT quowaBeueyy si9uped ( r - OOWId Jeuoeuss}u] - - : yUaWSAaAu] JUSWISEAU] Mousey e1syoe9 aBeueH OMN JOUIN volun WOMoseueW juswabeueyy B B yUSUSOAU] SJUSLUJSOAU juowebeuey | juowebeuey snuelIny reqoig ulajsuJageouen|y | sJueUND jeqojg ss gle rom yBss RGA || ECan auimApuelg u SOAIJEUII}Y awodu| paxty jeuoljeusa}uy awoou} paxi4 9109 Ayinba jeuolpeusayzu| yMoig (deg ordi) deg yews anjen deg jjews aso5 anlen dey afieq deg afieq 4YMO015 deg ahieq 248'S98'SE$ ~ SHOSIAPY JeUOeLUA}U a[syoa: 992'292' BES SjuaLIND jEqo|g np fence mv areini20 6Er' bel’ Ly$ juawaBbeuew jessy sianiaqo Z29'821' Pes SJUAW}SAU| JOYS! 90S‘86r'S9O1L$ Ula}swWagaouely Ozb'082'6s$ Sisuped JUSWYSSAU] JauINy 86e'220'e8$ juawabeuey jeyded yer 090'Z26'891$ OOWId 2S1'0r9'Lz$ Juswabeuey eyidey a6ewey uow FENCED edeyeH UoIU) S0'L10'SE1$ jJuawaBeuey, JUSWISBAU] [eEqo|d auimApuelg 992'LL2'Sz$ (v6ss) SJOSIAPY |BGO|D 1829S ae1S 2SL'91S'29$ O60'zSe'ss$ snueIny juawabeuey; juaUSAAU] OAAN £LS'9SP'72$ juawabeuey jassy AST 6b2'ZE7'GLO'LS :pung [e}0) 26S'€22'2$ JenueUl4 MOISayy 6002 ‘Oe eunr jo sy uonesojy Jessy sobeuey JUsURSeAu| GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM LOAN PORTFOLIO As of JUNE 30, 2009 Loan Interest Category Rates As of June 30, 2009 2009 Number Amount 2”™ Priority Mortgage 9% 5 $72,835 Retirees 8% 1,733 $19,172,423 Total Loan Portfolio 7,836 $128,816,407 GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM re Statement of Cash Flows Month Ending June 30, 2009 Beginning Balance Be Sesei PR (35,482,079) (46,612,129) |Receipts from collections Loan Repayment 3.579.276 3.291.872 26,608,525 26,397,440 Rent from Tenants/ Utilities 120,762 74,158 873,192 1,396,619 WICO Dividends 845,657.88 - 2,344,420 2,791.638 Employer Retirement Contributions 6,073,938 5,141,924 68,501,340 50,318,334 Employee Retirement Contributions 2,986,598 2,800,591 27,715,382 26,394,109 Parking Facility 2,451 2,354 24,774 26,277 Commission Recapture - 8,141 36,517 53,674 Miscellaneous * 26,951 15,912 435,829 3,433,324 Total Cash Available 13,635,633 11,334,951 126,539,979 110,811,415 Disbursements Annuity Payments 14,560,076 13,640,178 129,190,839 126,704,390 Administrative Expenses ** 1,041,229 1,140,320 9,792,257 9,962,511 Persona! Loans 2,837,992 2,089,823 22,172,645 22,049,385 Mortgage Loans 189,340 50.712 976,844 994,842 Retiree Loans 336,999 134,287 2,853,714 1,391,223 Auto Loans 635 142 37,730 83,103 Land Loans : 898 750 Refund of Contributions 312,392 207,108 2,640,161 2,174,958 Total Disbursements 19,278,664 167,665,089 163,351,162 jNet Receipts (5,643,031) 11,334,952 (41,125,110) (52,539,747)|| lean Surplus /(Deficit) (41,125.110) esarrarnl * Please see "Attachment 1” for details ** Please see “Attachment 2" for details 89°62Z'L00'2 SL€18'0Z0'L 0S°996‘0¢6'S 8y'ZL0'8v6'L Ze Lev'e6l'6 9¢'Lvz'eSL (Ly'v69‘'%2z) SO'S0‘SOZ 77 S88‘ L6L 87 Ev0'67z 20°S€8‘L8 98°0EL‘9nz G9'€7Z‘6EL 00°896‘ZZ1 Ov'8zc'96z 26° bS0'ers‘L S0°206‘6er'Z Z8°Zb2'260'b 0S°61.2‘S69'8 7S'26h'y89'Z €L°027'9S9 ZE°619'E8L'1 y9'S9P'9bz Ly'v69'%2z S6"Lvb‘LeO'L 82°e91'8Z 7L'829'961L e6'VLO'LyL vL'698‘elp GE LOL‘ZbZ 09°90S‘SZ CO'eSl‘LlE'b S6'elr'eeo'y SIUPLIBA yobpng 22° b8'280'L 89°099‘0SS'‘¢ 60/L€/9 - 80/10/01 GLA [enjoy 00°Z1b2'S6Z‘91L sasuedxg je}01 00°Les's9L'z uejd ABojouyse1 SYA wea, 00°989'9Z9'rL sasuadxy Bunessdo jejoL 00°s0s‘ze9'r o}qng) sasuadxy Buyesedo 12410 00°€LZ‘66E sabieyd 9 SA9IAI9S 19YIO aouesnsu| 00°Z87‘9EZ‘L S2DIA1BG [EUODISSIJOldg 00°670'02z Burureay 00°229'Szr [OAPI 00°0S8‘8zz uojesunWwW05) 00°000‘0Z2 SON OO'Fe6‘LSE SOUBUdIUIEW 9 seday 00°896‘ZZ1 juowdinby 00'Ses‘L Ze syed g saliddng ‘jevajew 00°S08‘0z6'z Aeyno jeyideg 00°92¢'€20'Z (12303qNS) }sO-g jjouAeg 00°9€0'6EZ‘b s}yaueg abuiy 00'ore'vee's SADIA1BS JBUUOSI9g uoldiosag 6002 AS ye6png 6002 Je9, [eosl4 (unosoy Ag) jenjoy sa jaipng jo ajnpayss WALSAS LNAW3xILSY SASA01dWAa LNSWNYSA09 GOVERNMENT EMPLOYEES RETIREMENT SYSTEM ADMINISTRATIVE EXPENSES October 1, 2008 - June 30, 2009 Description Salaries & Wages Fringe Benefits Professional Services Actuarial Services - Segal Investment Advisory Services - Segal Legal Fees Bert Smith and Company Buck Consultants ADP - Payroll Processing Miscellaneous Personnel & Consulting Services Accounting Services Medical Service/Consulting Stenographic Services Security Services Team GERS Maintenance and Repairs Supplies Insurance Property and Casualty/General Liability Directors and Officers/General Liability Travel Policy Vehicles Utilities Other Operating Expenses Advertising Board Stipend Catering Communication Equipment Rental Miscellaneous Services Training Travel Capital Expenditures Total 86,552 180,000 124,708 138,000 4,075 203,587 130,669 8,100 2,975 16,982 135,794 1,097,718 $ 2.129.160 111,562 103,793 7,340 222 41 18,985 12,450 24,447 147,015 3,650 186,934 78,164 196,629 668,273 10/0//08 - 6/30/09 3,550,660 1,082,813 2,129,160 219,505 68,709 222,694 473,869 668,273 1,377,753 9,793,437