OF THEA
N
ACE PUBLIC AND THE E
NEW MEXI
1200
CTUARIALEMPLOYE
EDUCATIOF
CO LEGIS
Feb
SubBuck
0 SeventeeDenve
L REVIEW EES RETIR
ONAL RETIFOR THE SLATIVE C
ruary 2011
bmitted By:Consultan
enth Street,er, CO 8020
REPORTREMENT AIREMENT
COUNCIL S
1
ts Suite 120002
ASSOCIATBOARD
SERVICE
0
TION
P:\Admin\New M
SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION APPENDIX
Exhib Exhib
N
Mexico LCS\NMLCS01
I. EXECU
II. INTROBackgActua
III. REVIEData PData FNecesBenef
IV. ACTUABackgEconoDemo
V. ACTUAActuaAsset Amort
VI. ACTUASampRevieConteRecom
VII. SOLVE
VIII. CONC
X bit 1 Develbit 2 Asset
NEW MEXI
13111_AuditReport_F
UTIVE SUMMA
ODUCTION .....ground ........rial Process
EW OF MEMBEProcess ......Files ...........ssary Data Efit Calculatio
ARIAL ASSUMground on Acomic Assumographic Ass
ARIAL METHOrial Cost MeValuation M
tization Meth
ARIAL VALUAple Member Cw of Project
ent of the Acmmendation
ENCY ...........
LUSIONS .....
opment of AValuation M
CO LEGIS
TABLE O
inal.docx
ARY .............
...................
...................s ..................
ERSHIP DATA......................................
Elements .....ons ...............
MPTIONS ANDctuarial Assuptions .........
sumptions ...
ODS .............ethods .........Methods .......hodology .....
ATION RESULCalculationstions ............tuarial Repo
ns for the Re
...................
...................
Actuarial ValMethod Reco
LATIVE CO
OF CONTE
...................
...................
...................
...................
A .............................................................................................
D EXPERIENCumptions ..........................................
...................
...................
...................
...................
LTS REVIEW.s.....................................ort ...............eport............
...................
...................
ue of Assetsognizing Exp
OUNCIL SE
ENTS
...................
...................
...................
...................
...................
...................
...................
...................
...................
CE STUDY .............................................................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
s .................pected Retur
ERVICE
...................
...................
...................
...................
................................................................................................
.............................................................................
.............................................................................
................................................................................................
....................
....................
...................rn on Existin
P
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................
...................ng Bases ....
PAGE
. 1
. 4
. 4
. 4
. 6
. 6
. 6
. 8
. 9
. 10
. 10
. 10
. 20
. 26
. 26
. 29
. 33
. 34
. 34
. 37
. 37
. 38
. 40
. 45
. 46
. 48
SECTIO
P:\Admin\New M
PURPOSE A periodispecificafund is berequest fEmployeBuck wasJune 30, CompanyvaluationMacdonathe informemploy G As an indreasonabmethods The scopprofessioSmith & C
•
• •
•
• •
PRINCIPA We are pbased onreasonabpracticesbut theseThe majoprojectio
ON I.
Mexico LCS\NMLCS01
E AND SCOPE
ic actuarial rlly for the preing measurfor an actuares Retiremes selected to2009 actua
y (GRS)), thn. Since the ald to complemation for thGRS as their
dependent rebleness and , and valuat
pe of the revonal peer revCompany. T
verifying tcomparindata is acand meetreviewingreviewingwith Actuareviewingvaluation checking reviewingwith Actua
AL FINDINGS
pleased to ren our review ble and perfos. We founde are not areor finding regns leads to a
EXECUT
13111_AuditReport_F
E OF ACTUAR
review of a project, on a rred as accurrial review ofent Associatio perform thrial valuatione 2008 expeJune 30, 20
ete the annuhe plans admr actuary.
eviewing actaccuracy of
ion results.
view includedview of the aThis review
that the datag it to the fin
ccurate and rts Actuarial Sg recommendg demographarial Standa
g sample mecalculationsnumbers in
g the actuariaarial Standa
eport that Buwith the exc
ormed in acc some areas
eas that wougarding the pan unreason
IVE SUMM
inal.docx
RIAL REVIEW
pension fundregular basisrately as posf the pensioion (PERA) e actuarial rn results preerience stud009 valuationual actuarial ministered by
tuary, we haf the valuatioThis report
d both a techactuarial assinvolved:
a from New Mnal actuarial reasonable aStandards ofdations by Ghic and econrds of Practmber calcula
s the valuatioal value of ard of Practic
uck finds GRception of twcordance wis where we
uld have a mpopulation g
nably optimis
MARY
1
d is typicallys to ensure tssible. The n plans admand the Edu
review. The epared by they, actuarial n, New Mexvaluations.
y PERA for o
ave been askon data, actudocuments t
hnical reviewsumptions an
Mexico PERdata GRS uassumptionsf Practice No
GRS for the enomic assumice Nos. 27 ations from
n report for sset calcula
ce No. 44
RS’s actuariawo major findth generally suggest maaterial impa
growth assumstic asset ac
conducted bthat the actuLegislative C
ministered byucational Reactuarial reve actuaries assumptionsico PERA em Cavanaughour review.
ked to expreuarial assumthe results o
w of the valund methods
RA and ERB used to deters were usedo. 23 for Datexperience s
mptions for reand 35 GRS that sh
accuracy ations and m
al results for dings. We foaccepted a
king changeact on the acmption of 1.5ccumulation.
by a separatuarial conditiCouncil Servy the New Mtirement Boaview include(Gabriel Roes and methomployed Cah MacdonaldNew Mexico
ess an opiniomptions, actuof our review
uation resultsused by Ga
was complermine if the f
d to completeta Quality studies easonability
howed the d
ethodology
ERB generaound the woctuarial princ
es to the curctuarial valua5% per year
te firm, engaon of the pevice issued aexico Publicard (ERB) ines a review oeder Smith &ods used in tavanaugh d supplied mo ERB contin
on regardinguarial cost w.
s and a briel Roede
ete and final valuatioe missing da
and complia
etails of the
for complian
ally reasonaork to be ciples and rent approacation results.r in the
aged ension a c n 2010. of the & the
most of nues to
g the
r
on ata
ance
nce
able
ch .
SECTIO
P:\Admin\New M
For PERAresults ofthe valua Major Fi1. In o
meAge
2. In oanddoecor
3. GRmopro
4. In osevrateexp
In additiodefining tgenerallypayment depletedERB andSection V These prassumpt30, 2010closed grfuture medepleted group apmembersexpectedon a stabgrows 1.5unreason
ON I.
Mexico LCS\NMLCS01
A, we were f the 2009 va
ation. We ha
indings: our opinion, et GASB reqe Method fo
our opinion, d Volunteer es not converridor as requ
RS used an edel. In our o
ojections usin
our review ofveral groups es are underperience und
on, Buck wasthe solvencyy agreed thaobligations . Buck revie
d prepared pVII of this rep
rojections weions includin. We projecroup membeembers fromby 2033 an
pproach that s, assets ford to be depleble active po5% annuallynably optimis
EXECUT
13111_AuditReport_F
unable to realuation. Th
ave found tw
the Modifiedquirements. r GASB purp
the Market VFirefighters)
erge to Markuired by Act
expected actopinion, this ng a stable a
f the experiewhere the r
rstating the lder both PER
s asked to ay of PERA a
at a pension when due.
ewed informprojections bport.
ere performeng an 8.0% acted the resuership which
m the projectd assets for includes tot
r PERA are eeted at any topulation, buy. As previostic.
IVE SUMM
inal.docx
eceive adequerefore, we o major find
d Entry Age We recomm
poses.
Value Smoo) is not a reaket Value in auarial Stand
tive populatiassumption
active popula
ence analysirates for retirliability and wRA and ERB
assist the Rend ERB. A system is soHence, insoation from pased on this
ed assumingannual rate oults using twh excludes noion. Under tERB are ex
tal contributioexpected to ime in the fu
ut ERB is basusly stated,
MARY
2
uate informaare unable tings in our r
Normal Metmend a chan
othing Methoasonable mea reasonable
dards of Prac
on growth on is aggressiation.
s results on rements arewe recomme
B.
etirement Sysnumber of dolvent if it caolvency woulrojections pe
s information
g all future eof return on o different aormal cost cthis approacxpected to beons and benbe depleted
uture. The osed on an aswe believe t
ation from GRto render anreview regar
hod used bynge to the tr
od used by Gethod since te period of tctice (ASOP
of 1.5% per yve and we r
the retireme not conservend the actu
stems Solvedefinitions wan be expectld occur if therformed by
n. Our proje
experience mthe market v
approaches. contributionsch, assets foe depleted bnefit paymend by 2058 whopen group pssumption ththis assump
RS to confirmn opinion on rding PERA
y GRS for ERraditional Ind
GRS for PERthe Actuarialtime or does
P) No. 44.
year in the Erecommend
ent rates, wevative. Thesuaries furthe
ency Task Foere suggestted to meet ahe fund assey GRS for boctions are in
matches the value of ass One approa
s and benefitor PERA areby 2039. Unnts for all curhile assets foprojection fohat the activ
ption for ERB
m the numethe accuracas noted be
RB does notdividual Entry
RA (PERA Fl Value of As
s not use a
ERB projectioGRS perform
e identified se aggressiv
er review the
orce with ted, but it is all future be
ets are fully oth PERA anncluded in
actuarial sets after Junach uses a t payments o expected to
nder an openrrent and futor ERB are nr PERA is b
ve member gB is
rical cy of elow.
t y
und ssets
on m
ve
nefit
nd
ne
of o be n ture not ased
group
SECTIO
P:\Admin\New M
Both DavSociety oQualificacontainedActuarial We woulCavanau Respectf BUCK CO David H.Principa
ON I.
Mexico LCS\NMLCS01
vid H. Slishinof Actuaries tion Standard in this repo Standards o
d like to thanugh Macdona
fully submitte
ONSULTAN
. Slishinsky,l, Consulting
EXECUT
13111_AuditReport_F
nsky and Micand Memberds of the Amort. This repof Practice a
nk the staff aald for their
ed,
NTS, AN ACS
, FCA, ASAg Actuary
IVE SUMM
inal.docx
chelle Rediners of the Ammerican Acaport has beeand David H
at the State assistance i
S COMPANY
A, EA, MAAA
MARY
3
ng DeLangemerican Acadademy of Acten prepared . Slishinsky
of New Mexn completing
Y
A MichelleDirector
are Enrolleddemy of Acttuaries to rein accordanhas primary
xico PERA ag this report
e Reding Der, Consultin
d Actuaries, uaries and m
ender the actce with all a
y responsibil
and ERB, GRt.
eLange, FSg Actuary
Members omeet the tuarial opinio
applicable lity for the re
RS and
SA, EA, MAA
of the
ons
eport.
AA
SECTIO
P:\Admin\New M
BACKGRO New Mexprofessioresponsiemployed We requeJune 30, experienCavanaufor ERB a The obje
• Adva
• Areastst
• AgSo
This repoconclusiorecommePERA an ACTUARIA The Newthe fundenecessarpension expectedand futurso that afor this a
• Ina
ON II.
Mexico LCS\NMLCS01
OUND
xico PERA isonal and certble for admid by public s
ested copies2007, 2008
ce and beneugh MacDonand PERA.
ectives of our
Assess the vaemographicaluations of
Assess whetheasonable are appropriatated in GRStandards.
Assess whethenerally acc
System’s expbjectives.
ort is intendeon reached dendations annd ERB’s ret
AL PROCESS
w Mexico PEed status of ry, along witpayments. T
d future pensre funding nessets are acdvance fund
ncreasing then orderly ma
INTRODU
13111_AuditReport_F
s responsibltified employnistering theschools in th
s of the actu8 and 2009, eefit calculatioald for PERA
r actuarial re
alidity, compand financiaNew Mexico
her the valuand consisten
ate for each S’s valuation
her the actuacepted actuaperience, and
ed to documduring the pend conclusiotirement fund
S
RA and ERBthe systemsh investmenThe valuatiosion paymeneeds. The fuccumulated tding include:
e security ofanner.
UCTION
inal.docx
e for adminiyees in the Se pension plahe State of N
uarial reportsexperience sons. These A. GRS pro
eview can be
pleteness, anal informatioo PERA and
ation and asnt with geneSystem’s str
n reports. W
arial valuatioarial standardd are approp
ent our indeeriod under
ons for improds.
B actuaries ps at the valuant return andon is a “snapnts and balaunding methto pay for fut
f promised (a
4
stering fourState of Newan for teache
New Mexico.
s prepared bstudies covereports were
ovided projec
e summarize
nd appropriaon used by thd ERB.
sset methodsrally accepteructure and
We will report
on assumptiods and practpriate for the
ependent anareview, and
oving the futu
prepare an aation date an
d employee cpshot” in timences this “lia
hodology invture benefits
and legislate
pension plaw Mexico. Ners, nurses
by GRS coveering econome supplied toctions and d
ed as follows
ateness of thhe current a
s and proceded actuarial funding objet any deviati
ons are reastices, are ree System’s s
alysis of theprovide Leg
ure funding
annual actuand the emplocontributionse which meaability” with tvolves advans for current
ed) benefits
ans for most New Mexico
and adminis
ering the plamic and demo us by GRSdetailed liabil
s:
he member dctuaries in t
dures used standards a
ective, and aons from ac
sonable andasonable ba
structure and
e work perforgislative Courequirement
arial valuatiooyer contribs, to fund theasures the cthe value of nce funding, employees.
by accumul
general, ERB is strators
n year beginmographic S for ERB anlity calculatio
data, and he actuarial
by GRS are and practicesare applied accepted
d consistent wased on the d funding
rmed and theuncil Servicets of New Me
on to determutions that ae promised urrent valuecurrent asseor prefundin
. The reaso
ating assets
nning
nd by ons
s, as
with
e e with exico
mine are
e of ets ng, ns
s in
SECTIO
P:\Admin\New M
• Pre
• Pcure
Each yeaMexico Pthe trust statutorilymerged wand anticbody withaccumulaprocess w
• Mex
• Bp
• Aa
• Aopssu
• Fsth
The ultimincurred equal to return ea
ON II.
Mexico LCS\NMLCS01
Providing for easonable re
Providing a murrent and peplacing me
ar’s valuationPERA and Efunds to payy required ewith a pensiocipated futurh the goal ofation which which imple
Membership xpected futu
Benefit levelsayable upon
Actuarial assnd form the
Asset valuation hand; the rimary purpomooth out voupported.
unding methpecific yearshey accrue.
mate cost of awhile adminthe contribu
arned on con
INTRODU
13111_AuditReport_F
the equitabletirement sy
method that aprospective mmbers who t
n involves thRB membery for those bmployee anon model incre experiencf achieving rprovides adement the fun
data – demoure pension
s – structure n retirement,
umptions – tbasis for es
on method –value can bose of an asolatile marke
hod – the pros. Various m
a pension prnistering the tion from em
ntributions m
UCTION
inal.docx
e treatment ystem costs t
appropriatelymembers of terminate, re
he determinars, the calcubenefits, andd employer corporating te. Typically
reasonably leequate benending policy
ographic infopayments ar
of promised withdrawal,
these represtimating futu
– the methode market va
sset valuationet fluctuation
ocedure usemethods aim
rogram overprogram. T
mployers andmade through
5
of different to each year
y recognizeseach System
etire, and die
ation of the llation of the the determicontributionsthe New Me
y, a funding pevel contribuefit security. are as follow
ormation is cre determine
d benefits de, disability, o
sent the actuure benefits
dology used lue or somen method whns so that th
ed to allocatem to smooth c
r time equalsThe source od employeesh pre-funding
generationsr.
s costs overm. The infuse makes fun
iabilities for amount of a
ination of thes. Members
exico PERA apolicy is estautions and a The key ele
ws:
collected as ed for each m
efined underor death.
uary’s best gand determi
to assign a smoothed ohich differs fe goal of lev
e the costs ocosts or ben
s the benefitof revenue uss to fund theg the benefit
s of taxpayer
r the workingsion of new
nding a dyna
benefits proassets curree actuarial sship demogrand ERB beablished by t
attaining an aements of th
of the valuamember of t
r state statut
guess of futuining plan lia
value to theor averaged from market vel contribut
of the promisnefits, or fund
ts paid and esed to pay fo
e program, pt payments.
rs by assigni
g lifetime of bmembers
amic process
omised to Neently availablsoundness oraphic data ienefit structuthe governinasset he valuation
ation date anthe system.
te which are
ure experienabilities.
e current assvalue. The value is to ions is
sed benefitsd for benefit
expenses or this cost ilus investme
ing
both
s.
ew le in
of s
ures ng
nd
ce
sets
s, to s as
s ent
SECTIO
P:\Admin\New M
As part operformeJune 30, pensioneperforme DATA PR Our obje
• C
• C
• C Data collcomparisand usedthe sameactuarial checks fovaluationcomparinquestionsWe comp DATA FIL New Mexdemogratheir benterminatestatus. Estatus is during th Active M New Mexparticulamissing iwas usedwritten doThereforeare appromissing dassumpt
ON III.
Mexico LCS\NMLCS01
of Buck’s acted on the me
2009. Newer and benefed by GRS.
ROCESS
ctives in this
Check for nec
Check for val
Check for com
ection is a cson betweend in the GRSe data files invaluation. I
or reasonabn data. Durinng the two fils and client pared the da
LES
xico PERA aaphic groupseficiaries in
ed membersEach retired a retiree or e year for P
Members
xico PERA:r dates of binformation fd in the GRSocumentatioe, we are unopriate. Howdates of birthion.
REVIEW
13111_AuditReport_F
tuarial reviewember informw Mexico PEficiary data t
s process we
cessary data
idity of mem
mpleteness
critical compn the data prS actuarial van the same fIn a standardleness and cng the audit,les, or by revresponses v
ata provided
and ERB cres of members
pay status. s and a sepafile from PEa beneficiaryERA and ER
: The data srth, gender cfor the VolunS valuation aon of GRS’s nable to detewever, the vah enter the s
OF MEMB
inal.docx
w of New Memation used RA and ERBhat was use
ere to:
a elements
mber data
of member d
onent of therovided to usaluation repoformat as wad valuation pcompletenes, we can revviewing an overifying databy PERA an
eate data files: active me One file con
arate file conERA and ERB
y. There areRB and deat
supplied by Pcodes and snteer Firefighalso containeprocess for
ermine if thealuation reposystem at the
BERSHIP D
6
exico PERAfor the curre
B supplied Bed for the Jun
data elemen
e review. Tys from PERAorts. New Mas supplied tprocess, thess, as well aview the dataoutline of suca items that nd ERB with
es for the actembers, termntains the ac
ntains the retB contain fiee also additiths for ERB.
PERA did cosalary. The hters group.ed the samepopulating mir process foort states thae average e
DATA
and ERB, aent actuarial Buck with thene 30, 2009
nts
pically, our dA and ERB, aMexico PERAto GRS to p
e actuary doeas reconcilesa preparationch procedurappear unre
h the valuatio
tuaries that iminated memctive group, tired and beelds to identional files tha
ontain some data provide The valuat
e missing infmissing or uor adjusting at GRS assuntry age. Th
a data analysvaluations c
e same activ actuarial va
data review and the dataA and ERB serform the Jes not audit s with the prin procedurere together weasonable oon data used
include threembers, and mone file conneficiary meify whether aat contain ne
missing infoed by PERAtion data weformation. Wnreasonablesalaries or mumes active his is a reas
sis was completed ave, inactive,aluations
focuses on a summarizesubmitted toJune 30, 200the data butior year’s either by
with sample or incompleted by GRS.
e distinct members anntains the embers in paa member inew terminati
ormation, in A had signific received th
We did not obe informationmissing gendmembers wonable
as of
a ed o us 09 t
e.
nd
ay n pay ions
cant at btain n. der
with
SECTIO
P:\Admin\New M
There weincluded GRS (suof active is otherwdiscusserecords wthe Volunof the acmay be rGRS’s acfields to ito an actvaluation The table
MisDate of BGender Service Pay Rate GRS inclon activeto accoucost to beshould clcost or s New Mexprovided dates of GRS assaddition, amountsdescribedmissing d
ON III.
Mexico LCS\NMLCS01
ere a significin the activepplied by Camembers be
wise deemeded the activeswere actual tnteer Firefigtive data pro
reasonable tctive membeindicate theyuary if PERA
n.
e below deta
ssing Item irth
ludes a 2% le liability andnt for issuese a reasonalarify whetheimply just to
xico ERB: Wby GRS. Tbirth and sa
sumed a hirethey screen. The valuad their procedates of birth
REVIEW
13111_AuditReport_F
cant numbere counts in thavanaugh Mecause the a
d “defective” s with salaryterminationshters. The Vovided by PEo exclude thership if thesy were not inA did not rep
ails the miss
P7759
load on activd normal coss surroundingble approac
er the 2% loa the liability.
We also comhe data suplaries. The
e age of 35 fn the salary ition data fileess for adjush and salarie
OF MEMB
inal.docx
r of active meheir report. acdonald), iannual salarby their valu
y less than $s. GRS alsoVolunteer FiERA and thehese recordsse records ancluded in thport member
ing informat
PERA 7,298 7,151 5,912 9,136
ve liability fost for the Legg data repor
ch in cases wad for Magis
mpared the Eplied by ERfile from GR
for membersinformation ae provided bysting missinges used by G
BERSHIP D
7
embers on tUpon reviewt appears thry provided buation system$100 with PEo excluded arefighters va
e records incs; however, iare included he active poprs that shoul
ion reported
Judicial323
20
or Magistrategislative Divirted by PERAwhere data restrate and Ju
ERB active dB did contai
RS did not cos with unreasand make ady GRS did ng or unreasoGRS to be re
DATA
the GRS valw of data quhat GRS excby PERA is m. GRS sta
ERA and it w significant n
aluation repocluded for thit is difficult fon the valuapulation. In ld not be con
d to GRS by
l Ma
e and the Judision of PERA. We find
reporting is inudicial was a
data to the an some miss
ontain any msonable or mdjustments t
not contain thonable data.easonable.
uation file thestions sent
cludes a signless than $1
ates they prewas determinnumber of aort provides e valuation. for another aation file withaddition, it wnsidered as
New Mexico
agistrate 1 2 5 6
dicial FundsRA and Volunloads to liabnconsistent.also applied
active valuatsing informa
missing gendmissing dateto low or nonhese adjustm We find the
hat were not t to PERA bynificant numb100 or the reeviously ned that thosctive recorda reconcilia In both cas
actuary to mhout a field owould be helactive for th
o PERA:
VolunteFirefight
843831
2,262N/A
s, and a 5% lnteer Firefig
bility and nor However, Gto the norm
tion data ation, in partders or services of birth. Inn-annualizedments. Theye adjustmen
y ber ecord
se s for tion ses, it
match or lpful
he
eer ers
3
2 A
load hters
rmal GRS al
icular ce. n d y ts for
SECTIO
P:\Admin\New M
The table
Finding:complete Retired a New Mexmissing ioptions a Similar toare not in Finding:determinto the authat are c New Mexinformatiand dateclosely to Finding:complete NECESSA We beliedata filesHowever For the a
• O
d
ON III.
Mexico LCS\NMLCS01
e below deta
: Overall, thee and, from w
and Inactive
xico PERA:nformation.
and dates of
o the active fncluded for t
: We are une if it was apditing actuaconsidered f
xico ERB: Ton. All retire
es of birth. To the data re
: Overall, thee and proper
ARY DATA EL
eve that all nes in order to r, we do hav
active and in
On the activeetermining c
REVIEW
13111_AuditReport_F
ails the miss
MiDate of BGender Service Pay Rate
e active datawhat we can
e Members
: The inactiv All retired mbirth.
file used by the valuation
able to deteppropriate tory if the valufor the valua
The inactiveed members
The number eported by P
e retiree andrly processe
LEMENTS
ecessary davalue liabilite some sug
active memb
e file, includecurrent statu
OF MEMB
inal.docx
ing informat
ssing Item Birth
e / Salary
a provided byn determine,
ve and retiremembers on
GRS, there n.
ermine who wo exclude thouation actuaration.
e and retired s on the PERof retired me
PERA.
d inactive dad by GRS.
ata elementsies for activegestions tha
ber file:
e a date of huses if there
BERSHIP D
8
ion reported
y New Mexicappears to
ed data supp the PERA f
are inactive
was excludeose memberry provides a
data supplieRA file contaembers inclu
ta provided
s are presente, inactive, aat can improv
ire and a daare question
DATA
d to GRS by
ERB 2,326
0 1 0
co PERA anbe properly
plied by PERfile contained
e members in
ed by GRS ars for the vaa data file th
ed by PERAained benefituded in the G
by New Mex
t on the Newand retired mve valuation
ate of terminans about the
New Mexico
nd ERB was processed b
RA containedd benefit am
ncluded on t
and thereforeluation. It w
hat only inclu
A contained vt amounts, bGRS valuatio
xico PERA a
w Mexico PEmembers andn precision:
ation. This we status that
o ERB:
reasonably by GRS.
d very little mounts, bene
the GRS file
e could not would be helpudes membe
very little mibenefit optionon matched
and ERB wa
ERA and ERd beneficiar
will help in is reported.
efit
that
pful ers
ssing ns very
as
RB ies.
SECTIO
P:\Admin\New M
• Oa n
For the re
• F
a• In
BENEFIT New Mexcovering calculatiooptional f We did fiaverage calculatioPERA re New Mexretiremencalculatioresults ofdata prov
ON III.
Mexico LCS\NMLCS01
On the inactivdetailed ga
on-vested te
etired file:
or joint & sunnually for C
nclude rema
CALCULATIO
xico PERA: members fr
ons. The caform of paym
nd two calcusalary. We ons noted absearch why
xico ERB: Wnts. We werons for ERB f the calculavided by ER
REVIEW
13111_AuditReport_F
ve file, includin/loss and eermination a
urvivor optionCOLAs. Thisining contrib
ONS
We receiverom each plaalculations mments.
ulations thatrecommend
bove was nothis retiree w
We reviewedre able to redid not cont
ations to the B including
OF MEMB
inal.docx
de terminatioexperience and reduced
ns, include as will help thbution balanc
ed from PERan. We were
matched the d
t appear to ud that PERA ot reported bwas exclude
d three beneasonably matain any idenvaluation daoptional form
BERSHIP D
9
on reason coanalysis. Seand unreduc
a separate fiehe actuary mce for calcul
RA 40 benefe able to readata provide
use more thareview thes
by PERA on ed.
efit calculatioatch the resuntifying inforata used by Gm of paymen
DATA
odes to assieparate codeced retireme
eld showingmore accurat
ation of mod
fit calculationasonably maed by PERA
an 36 monthse calculationthe valuatio
ons we receults of thesermation, but GRS. The cnts.
ist the actuaes should incent.
g the pop-up tely value thidified cash r
ns of recent atch the resufor the valua
hs in the calcns. Also, on
on file. We re
ived from ERe calculationswe were ab
calculations
ary with prepclude vested
amount updis benefit oprefund benef
retirements ults of these ation, includ
culation of finne of the ecommend t
RB for recens. The le to match matched the
paring d and
dated ption. fits.
ding
nal
that
nt
the e
SECTIO
P:\Admin\New M
BACKGRO The actuamountsof past dhow eachterminatiand beneamount omust maassumptmake hisright assprofessio Traditionthe explicexperienaggregatassumptto assumPERA anon the exhave bee There are
• Epa
• Daa
For purpotheir reascommen ECONOM The key and formof salary increasinreturn, it the COLA
ON IV.
Mexico LCS\NMLCS01
OUND ON AC
arial assum. Choosing ata and judgh member’s on, the actuefit paymentof benefits eke an assumions, the act
s or her bestumption, but
onal judgmen
ally, actuariacit approachce with respte represent ion does not
mptions is reqnd ERB are xplicit approaen following
e two genera
Economic asslan assets), pplicable), a
Demographicnd after retirvested bene
oses of our sonablenessted on the re
IC ASSUMPTI
economic asms the basis f
increase), tng payroll), ais importantA and the sa
ACTUAR
13111_AuditReport_F
CTUARIAL ASS
ptions form tactuarial as
gment of futucareer will eary must depatterns. Tarned and w
mption abouttuary examin estimate of t each assumnt.
al assumptioh, each indivpect to that a
the actuaryt necessarilyquired undernot subject tach to selecthe explicit a
al types of a
sumptions –assumed ra
and increase
c assumptionrement), disaefit.
review, we fs. We revieweasonablene
IONS
ssumptions for discountihe increase
and inflation.t to equally ralary scale a
RIAL ASSU
inal.docx
SUMPTIONS
the basis of sumptions isure expectatevolve in tervelop assum
These assumwhen these bt future invesnes the pastthe anticipa
mption shou
ons have beidual assum
assumption. ’s best estimy represent tr ERISA andto ERISA, st
cting assumpapproach.
actuarial ass
– these incluates of salarye in total pay
ns – these inability, retire
focused on twed the mosess of assum
are the valuing future bein total payr Since infla
reflect the unassumptions
MPTIONS
10
the actuary’s a matter oftions. Sincems of salary
mptions in anmptions enabbenefits are stment earnt experienceated experienuld be reason
en consideremption repres
Under the imate of futurethe actuary’sd the Internatandard actuptions. The
umptions:
de the valuay increase, i
yroll.
nclude the asement, and w
he New Mexst recent expmption chang
ation interesenefit paymeroll (since un
ation impactsnderlying infl. In addition
AND EXPE
’s best guesf profession
e it is not posy growth, futun attempt to ble the actualikely to be pings of the t
e and considnce under thnable based
red either “exsents the actmplicit appre experiences best estimaal Revenue Cuarial practicNew Mexico
ation interestnflation, cos
ssumed ratewithdrawal b
xico PERA aperience anages given hi
st rate (expeents), the sanfunded liabs salary increlation rate inn, GRS make
ERIENCE S
ss of future bal opinion bassible to knoure service apredict futu
ary to quantipaid. Similatrust fund. Iners future exhe plan. Thed on the actu
xplicit” or “imtuary’s best roach, the ase, but each ate. The exCode. Althoce today tendo PERA and
t rate (expecst-of-living in
es of mortaliefore and af
and ERB assalysis reportistorical plan
ected return lary scale (o
bilities are ameases, COLAn the valuatioes an assum
STUDY
benefit paymased on ana
ow in advancand cause ore employmify the expecarly, the actun developingxpectations ere is no oneuary’s
mplicit.” Undeestimate of
ssumptions iindividual
xplicit approaough New Meds to be bas ERB actuar
cted return oncreases (if
ty (both befofter eligibility
sumptions ats and n experience
on plan assor assumed mortized oveAs and asseon interest ramption for to
ment alysis ce of ent cted uary g the to e
er
in the
ach exico sed ries
on
ore y for
and
e.
ets rates
er an et ate, tal
SECTIO
P:\Admin\New M
payroll inMexico P Inflationrate unde
Additionainflation ireflectiveThe table
ON IV.
Mexico LCS\NMLCS01
ncreases thaPERA and E
n: Recent infler the CPI-U
Geomending
ally, we lookindexed nom
e of the bonde below show
Maturity P5
10 20
ACTUAR
13111_AuditReport_F
at should alsRB expecte
lation rates hU index over
Yea199419951996199719981999200020020022003200420052006200720082009
etric Mean fog:
12/31/1
12/31/1
12/31/1
12/31/1
12/31/2
Last 50 y
ed at the spminal yield ond market’s exws this spre
Period
RIAL ASSU
inal.docx
o be consistd experience
have been lothe 16-year
Infla
ar 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
or 10 year per
1969
1979
1989
1999
2009
years
read between inflation prxpectation oad over 3 m
Bond Yield2.10% 3.31% 4.05%
MPTIONS
11
tent with othe.
ower than inr period endi
ation Rates
riod
en the nominrotected trea
of inflation duaturity perio
TIP011
AND EXPE
er economic
n the 1970s ang June 30,
s
CPI-U In2.6%2.8%3.0%2.3%1.6%2.2%3.4%2.9%1.6%2.3%2.7%3.4%3.2%2.8%3.8%
(0.4%
2.32%
7.08%
5.52%
2.92%
2.65%
4.10%
nal yield on tasury bills (Turing the maods as of Ma
PS Yield 0.41%
.32%
.74%
ERIENCE S
c assumptio
and 1980s. , 2009 was a
dex % % % % % % % % % % % % % % % %)
%
%
%
%
%
%
treasury secTIPS). This saturity perioday 28, 2010.
Spre1.691.992.31
STUDY
ns and New
The inflationas follows:
curities and tspread is
d of the bond
ad % % %
w
n
the
d.
SECTIO
P:\Admin\New M
Short-tercalculatiousing an In the 20assumptinflation rinflation eas a resuthan 3.00long-term2009 NAopinion, treasonabrecomme Althoughnot appe Valuatioreturn explan’s asconsidereshould coeconomic In 2009, economichistoricalinvestmeto the asunderlyinassumpt The Newprivate eequities-valuationThe inforpublic pla
ON IV.
Mexico LCS\NMLCS01
rm projectionons are longinflation ass
08 actuarialion to 3.50%rate is greateexperiencedult of recent 0%, long-term inflation asASRA survey
the long-termble but an inendation to d
h there was aear as though
on Interest Rxpected on thssets, the uned for fundinonsider the ac implication
the New Mec assumptiol New Mexic
ent returns usumption fo
ng price inflaion of 4.00%
w Mexico PEquity) and 2like and 38%
n interest ratermation beloans.
ACTUAR
13111_AuditReport_F
ns of inflation term so a h
sumption be
experience % for PERA a
er than the ad over the laslow inflationm rates shossumptions ry of public plm price inflatflation rate odecrease in
a recommenh that assum
Rate: The vahe Actuarial derlying infla
ng representasset allocatns.
exico PERA ons based onco PERA andsing capital r investment
ation of 4.00%% for PERA a
RA target as7% fixed inc
% fixed income and asset
ow comes fro
RIAL ASSU
inal.docx
n suggest lohigher inflatiotween 3.00%
studies, GRand no chanaverage inflast 50 years o. Although muld be higheranging fromans, the metion rate of 3of up to 3.50the inflation
ndation to demption was c
aluation inteValue of As
ation rate, ets a long timtion policy, h
and ERB acn informationd ERB invesmarket assut return of 8.% for PERA and 5.00% fo
sset allocatiocome. The Nme. Below iallocation to
om the 2009
MPTIONS
12
ower inflationon assumptio% and 3.50%
RS recommenge in the asation over thof 4.10%. Tmany econoer given the m 3.00% to 3dian inflation3.00% per ye0% could be
assumption
ecrease the ichanged for
erest rate shossets, considxpenses, ane horizon. I
history of ret
ctuaries perfon through Justment returnumptions. T.00%, net of and 3.00%
or ERB.
on is 73% eqNew Mexicos a compariso several sim Public Fund
AND EXPE
n than is curron is more a
% at this time
ends a changssumption ofhe last ten yeThis assumptomists currenhistorical rec
3.50% are ren assumptioear recommconsidered.
n to 3.50% fo
inflation assthe 2009 va
ould represedering the rend future conIn reviewing turns and ex
formed an exune 30, 2008ns and a proThe actuariesf all expensefor ERB, res
quities-like ( ERB targetson of New
milar regionad Survey pu
ERIENCE S
rently assumappropriate. e.
ge to the inff 3.00% for Eears of 2.65%tion has beently forecastcord of inflat
easonable. Aon was 3.50%
mended by G. We would or PERA.
sumption for aluation.
ent the long-eal rate of retntributions. this assump
xpectations o
xperience an8. The actuaojection of exs recommenes, while keesulting in a r
(includes intet asset allocaMexico PER
al statewide blished by N
STUDY
med. Actuar We recomm
lation ERB. The %, but less ten trending dt inflation of tion. We beAccording to%. In our RS for ERBagree with t
PERA, it do
-term rate ofturn on the The period ption, the acof any future
nalysis on aries considexpected nded no chaeping the real rate of r
ernational aation is 62%RA and ERBretirement p
NASRA for 1
rial mend
than down less
elieve o the
is the
oes
f
ctuary e
ered
nge
return
nd % B’s plans. 26
SECTIO
P:\Admin\New M
Retire
New MNew MColoraKansaMinneMontaMontaNevadSouthUtah RWashWyomPublic
New Mexsimilar syaverage investmedecrease The Actueconomicbasis for The stanbest judgfor the usestimate We concmarket aassumpt
ON IV.
Mexico LCS\NMLCS01
ement System
Mexico PERAMexico ERB ado PERA as PERS esota State Reana Public Emana Teachersda PERS Dakota RetirRetirement Syington Depar
ming Retiremec Fund Survey
xico PERA aystems and while PERA
ent professioed their valua
uarial Standac assumptioour review odard states
gment is reasse of the buirate.
cur with the mssumptions ions used.
ACTUAR
13111_AuditReport_F
Valuation
m
A
etirement Sysmployees Rets
rement Systeystem tment of Retir
ent Systems y (Average)
and ERB’s vathe median
A’s equity exponals have dation interes
ards of Practons used for of GRS’s ecthat the actusonable for lding block m
methods usewhich differ
RIAL ASSU
inal.docx
n Interest R
stem irement Board
m
rement Syste
aluation intePublic Fundposure is moeclined rece
st rates, man
tice No. 27 pmeasuring p
conomic assuuary should setting the inmethod and
ed by GRS tor from those
MPTIONS
13
Rates and A
In
d
ems
erest rate assd survey. ERore than theently. Althouny systems h
provides actpension obligumption anadevelop a bnvestment restochastic s
o determineused by GR
AND EXPE
Asset Alloca
Valuation nterest Rate
8.00% 8.00% 8.00% 8.00% 8.50% 7.75% 7.75% 8.00% 7.75% 7.75% 8.00% 8.00% 8.00%
sumption is RB’s equity ee average. Rugh some rehave not.
uaries with ggations. We
alysis in the ebest estimateeturn assumsimulation m
e the range, bRS. Below is
ERIENCE S
ations
e Asse(EqFixe
7676777675766
average whexposure is Return expecetirement sys
guidance in e used this sexperience ae range that mption. The models to dev
but have uses a summary
STUDY
et Allocationuity-like vs. ed Income)
73% / 27% 62% / 38%
5% / 25% 0% / 40% 6% / 24% 3% / 27% 3% / 27% 4% / 36% 1% / 29% 9% / 41% 6% / 24% 6% / 34% 7% / 33%
hen compareless than thectations of stems have
the selectiostandard as analysis repin the actuastandard allvelop the be
ed Buck’s cay of the
n
ed to e
n of the
port. ary’s ows
est
apital
SECTIO
P:\Admin\New M
New Mexcapital m
Domestic InternatioFixed IncoReal EstaAbsolute Private EqReal AsseGlobal Ta Portfolio (Inflation Expenses
Net Portfo
*Assum GRS theindicate a Our apprrange thathe long-a rate thachance oour capit
ON IV.
Mexico LCS\NMLCS01
xico PERA:market assum
Equity nal Equity ome ate Return/Hedgequity ets/Inflation Lactical AA
(Real)
s
olio (Nominal)
mes 4.00% infl
n developeda best estim
roach is to dat falls within-term investmat contains sof being achial market as
ACTUAR
13111_AuditReport_F
The experimptions by R
e Funds
inked
)
lation was used
d the distribuate range fo
evelop the dn the 40th pement return wsome conserieved. We hssumptions.
RIAL ASSU
inal.docx
ence analysRV Kuhns.
E
d by GRS in th
utions of annor the annua
distributions ercentile andwill fall arourvatism, resuhave conduc These resu
MPTIONS
14
sis report ind
Expected ReaReturn
(Arithmetic Mean) 6.03% 6.61% 2.23% 4.40% 4.85%
10.85% 3.50% 5.20%
4.50% 4.00%
(0.30%)
8.20%
e experience a
nual returns aal returns.
of annual red the 60th pend the meanulting in a locted this anaults follow:
AND EXPE
dicates that t
Buck al
StaDev
1820
46
1232
716
12
analysis.
and a mean
eturns and thercentile, resn return. Thong-term assalysis for the
ERIENCE S
they have re
andard viation 8.48% 0.07% 4.94% 6.93% 2.50% 2.00% 7.76% 6.91%
2.98%
n. The repor
hen to selectsulting in a 2en we typica
sumption wite PERA and
STUDY
elied on the
GRS (RV Ku
4.12%4.00%
N/A
8.12%
rt does not
t a reasonab20% chanceally recommth at least a ERB plans u
uhns)
% % A
%*
ble e that end 50% using
SECTIO
P:\Admin\New M
Percentile
New MexRate of RInflation:
New MexRate of RInflation:
ON IV.
Mexico LCS\NMLCS01
e: 5
xico PERA eturn: 4.94.00%
xico ERB eturn: 4.43.00%
ACTUAR
13111_AuditReport_F
5th 25
92% 6.8
RC
48% 6.2
RC
RIAL ASSU
inal.docx
5th 40th
4% 7.69%
Reasonable raConservative r
7% 7.05%
Reasonable raConservative r
MPTIONS
15
h 50th
% 8.20%
ange: 7.69%range: 7.69%
% 7.53%
ange: 7.05%range: 7.05%
AND EXPE
60th
% 8.71%
% to 8.71% % to 8.20%
% 8.00%
% to 8.00% % to 7.53%
ERIENCE S
75th
% 9.58%
% 8.80%
STUDY
95th
11.59%
10.66%
SECTIO
P:\Admin\New M
New Mexwere not underlyingross ret
Portfolio (Inflation Expenses
Net Portfo When recrate of reinvestmeeconomicenvironmhistoricalthe next would tak Conclusof 8.00%assumptreal returassumptrecomme4.75%. Areturn as We also reconsideexpected
ON IV.
Mexico LCS\NMLCS01
xico ERB: Tprovided in
ng capital maturn was 8.2
(Real)
s
olio (Nominal)
commendingeturn on planent data, curc expectatio
ment is often l averages. three years,ke a very str
sion: Theref% is reasonab
ions. We surn componenion to 3.50%end increasiAfter reflectissumption of
recommendering the inv
d recovery is
ACTUAR
13111_AuditReport_F
The capital mthe experie
arket assum9% and ave
)
g valuation in assets giverent fixed inc
ons. History followed byMany invest with varying
rong recover
fore, we conble, althoughuggest that Nnts of the inv
% and increang the inflating the expef 8.00% for E
d continuousvestment rets known, or w
RIAL ASSU
inal.docx
market assunce analysis
mptions by foerage expect
nterest ratesen the plan’scome yield rhas shown
y a recovery.tment profesg strength. Ary to elimina
ncur with GRh we would hNew Mexicovestment retsing the reaion assumptnse assump
ERB and a 7
monitoring urn assumpwhenever th
MPTIONS
16
umptions uses report. Theur different cted real retu
Buck 4.83%3.00%
(0.30%)
7.53%
s, actuaries s asset allocrates, historithat a deep During recssionals are Although wete the sever
RS’s proposahave recommPERA and
turn. We recl return to 4.tion to 3.50%ption, Buck re7.75% invest
of the returntion in anothe asset alloc
AND EXPE
ed for the inve report indiconsulting firn net of exp
E(Averag
Cons
)
must considcation policy,cal plan perrecession lik
covery, equitpredicting a
e concur thare market los
al that the invmended a dERB considcommend de.50% for PE
% and decrerecommendstment return
ns and this aher 2-3 yearscation policy
ERIENCE S
vestment reticates that Grms. The avpenses was
ERB ge of Four sultants)
5.41% 2.58%
(0.30%)
7.69%
der the long-, inflation, hirformance, ake our curreties tend to oa recovery wt a recoverysses experie
vestment reifferent set oer changingecreasing th
ERA. For ERasing the re
s a long-termn assumption
assumption, s when the my is changed
STUDY
turn modelinGRS relied overage expe5.41%.
-term expectstorical
and future ent economicoutperform th
will occur withy will occur, ienced recen
turn assumpof economic g the inflationhe inflation B, we
eal return to m investmenn for PERA.
and magnitude od.
ng on the ected
ted
c he hin t tly.
ption
n and
t
of the
SECTIO
P:\Admin\New M
Salary Seconomictwo pointaccordingrate and The salacomponeassumptproductivprice inflainflation i
Productiv(inflationeconomicincreases
ON IV.
Mexico LCS\NMLCS01
Scale: The sac assumptiots. First, howg to the actusalary scale
ry scales usent is the ration that is invity assumptation assumis 5.00% and
Geomending
vity of our ec). Assumptic productivits in the Soc
ACTUAR
13111_AuditReport_F
alary scale, on. An analyw does the ruarial assume) internally c
sed for New e of generalherent in the
tion. The geption inhered price inflat
Yea
199419951996199719981999200020020022003200420052006200720082009
etric Mean fog:
12/31/1
12/31/1
12/31/1
12/31/1
12/31/2
Last 50 y
conomy creaons generalty. The tableial Security w
RIAL ASSU
inal.docx
or assumedysis of the aprate of actua
mptions? Secconsistent w
Mexico PERl wage inflate developme
eneral wage ent in the valtion is 3.00%
ar
4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
or 10 year per
1969
1979
1989
1999
2009
years
ates salary inly range frome below showwage index.
MPTIONS
17
annual rateppropriateneal salary incrcond, are thewith regard to
RA and ERBion. This is ent of the vainflation assuation intere
%. The table
AnnS
riod
ncreases tham 0.50% to ws historica
AND EXPE
es of salary iess of the sareases compe two econoo the underly
consist of twcomprised o
aluation intersumption is 4est rate is 4.e below show
nual increasSecurity Wag
2.68%4.01%4.89%5.84%5.23%5.57%5.53%2.39%1.00%2.44%4.65%3.66%4.60%4.54%2.30%
(1.51)%
4.33%
6.89%
5.76%
4.25%
2.94%
4.83%
at are greate1.50% for ml productivity
ERIENCE S
ncrease, is aalary scale npare with thomic assumpying inflation
wo componeof the price irest rate, plu4.50% for PE00%. For E
ws historical
e in Social ge Index
% % % % % % % % % % % % % % % %
%
%
%
%
%
%
er than pricemost plans toy based on i
STUDY
another key eeds to con
ose expectedptions (interen assumption
ents. The firinflation us an economERA and the
ERB, the wag wage inflati
e increases o reflect inflation and
sider d est n?
rst
mic e ge ion.
SECTIO
P:\Admin\New M
10-year P
12/
12/
12/
12/
12/
Last We find Gfor PERAvery cons0.75% an The otheincreasesfrom 15.02009 me2009 mescale assnot pay r8.50% at The meria combinand gradMexico Pchange tsalary sc Over the Magistramembersproper dalicensureover this than exprecomme Another cspread b“economsystems,high of 5
ON IV.
Mexico LCS\NMLCS01
Period endin
/31/1969
/31/1979
/31/1989
/31/1999
/31/2009
t 50 years
GRS’s curreA. The 2.00%servative. Ond increase
er componens. As of Jun00% for 1 yerit/step/longrit/step/longsumption dorelated. Thet 0 years of s
it/step/longenation of ageding down ovPERA and Eo the salary
cale assump
analysis pete and shorts for PERA aata to effectie program so
period has ected. It doend that thes
consideratiobetween the ic spread.” , the average.50%, with 4
ACTUAR
13111_AuditReport_F
ng Wag
ent productiv% productivi
Our recommeprice inflatio
nt of the salane 30, 2009,ear of serviceevity compoevity compo
oes not applye current meservice to 0.
evity compone and servicever time to 0RB experienscale assumtion for ERB
eriod, the actt service meand Judicial ively analyzeo no changebeen low, thes not appese compone
on in examinvaluation intIn a 2008 We spread wa4.50% being
RIAL ASSU
inal.docx
ge Inflation
4.33%
6.89%
5.76%
4.25%
2.94%
4.83%
vity assumptiity assumptiendation woon to 3.50%
ary scale var the merit/ste, grading d
onent for Judonent for May to Legislatirit/step/longe00% at 10 o
nent can be ae. We gene.00% to be cnce. We agrmption baseB.
tual rates of mbers in PEmembers.
e the salary to the salar
he results indar that inflat
ents be split f
ing the packterest rate a
Wisconsin suas 4.36%. E the most co
MPTIONS
18
Pr
ion of 0.50%on and gene
ould be to lowfor a total w
ries by servictep/longevityown to 0.50
dicial membegistrate memive or Voluntevity compo
or more year
applied to sarally find thecommon. Wree with the d on the exp
salary increERA but highFor ERB, Gincreases to
ry scale wasdicate that mtion and merfor review fo
kage of econnd the genervey of 87 mconomic spr
ommon. Eco
AND EXPE
rice Inflation
2.32%
7.08% 5.52% 2.92%
2.65%
4.10%
% and generaeral wage inwer the prod
wage inflation
ce and measy component% at 20 yeaers is 0.75%mbers is 0.2teer Firefigh
onent for ERrs of service
alary increasese rates sta
We find the srecommend
perience for
eases were loher than expRS indicatedo implements recommendmerit increasrit increasesor the next st
nomic assumeral wage infmajor public read rangedonomic spre
ERIENCE S
P
al wage inflaflation of 5.0
ductivity assun of 4.25%.
sures merit ot for PERA m
ars of service% for all ages
5% for all aghters since thB members .
ses by age, arting at 5.00cale reason
dation of thePERA and n
ower than expected for lond that they dtation of the ded. Given
ses may haves were split fotudy.
mptions is toflation; also kemployee re
d from a low eads should
STUDY
Productivity
2.01%
(0.19%)
0.24%
1.33%
0.29%
0.73%
ation reason00% for ERBumption to
or step/longmembers rane. The Junes. The June ges. The salhe benefits aranges from
by service, o0% to 6.00%able given N actuaries tono change to
xpected for ng service did not have three-tier that the infle been highor analysis.
look at the known as etirement of 3.25% to directly corr
able B is
evity nges
e 30, 30,
lary are
m
or by %, New o o the
ation er We
a relate
SECTIO
P:\Admin\New M
with the eand henc We beliePERA anPERA anERB. Fo
Increaseaccrued the PERAboth amoplans arerate at was a perc
• the alevel,
• the to This procHoweveris dependpayroll g
ON IV.
Mexico LCS\NMLCS01
expected reace higher ex
eve an econond ERB. GRnd 5.00% forollowing is a
New MeNew MeIdaho PEKansas MinnesoMontanaMontanaNebraskSouth DUtah ReWashingWyomin
e in Total Paliability is amA Plans andortize the une not pay relhich total pacentage of to
ctive payroll, and
otal payroll g
cedure for amr, this methodent on a starowth rate.
ACTUAR
13111_AuditReport_F
al rate of retpected rates
omic spread RS’s recommr ERB. We ftable showi
Reexico PERA exico ERB ERS(1) PERS(1)
ota State Retia Public Empla Teachers(1) ka School(2) akota Retirem
etirement Systgton Departmg Retirement
(1) 2008 W(2) Survey
ayroll: As pamortized ove ERB. The funded accrated. Since
ayroll is expeotal payroll p
l on which th
grows by 4.5
mortizing unodology increationary or gIf active mem
RIAL ASSU
inal.docx
turn of a plans of return, s
between 3.0mended econfind the econng the econ
Econetirement Sy
rement Systeloyees Retire
ment Systemstems(1) ent of Retirem Systems(1)
Wisconsin Comy of Buck Gov
art of determer a 30-year Legislative Drued liability e pay is expeected to increprovided:
he contributio
50% for PER
nfunded accreases the risgrowing activmbership de
MPTIONS
19
n’s asset alloshould result
00% and 4.0nomic assumnomic spreaomic spread
omic Spreaystem
em(1) ment Board(1
s(2)
ment Systems
mparative Stuvernmental Cl
mining the acopen periodDivision of Pas a level do
ected to increease. The a
on is based
RA and 3.75%
rued liabilitiesk of future fve membersecreases, co
AND EXPE
ocation. Higt in higher ec
00% is reasomptions incluad reasonabd of other sim
ad
)
s(1)
udy ients
ctuarial contrd as a level pPERA and thollar amounease, an assamortization
remains at a
% for ERB.
es is commofunding shorship group nontributions m
ERIENCE S
gher allocatioconomic spr
onable for Nude a spreadle for PERA milar retirem
Rate 4.00% 5.00% 3.25% 4.00% 4.00% 3.75% 3.25% 3.50% 3.75% 4.75% 4.50% 4.50%
ribution ratepercent of pahe Volunteert since the bsumption is payment w
a constant o
on for large prtfalls since aeeded to memay need to
STUDY
ons to equityreads.
New Mexico d of 4.00% f
A but high forment plans:
, the unfunday for most or Firefighter benefits for tmade for theill remain lev
or stationary
public plans.adequate funeet the assuo be increase
y,
for r
ded of Fund hese e vel
nding
umed ed in
SECTIO
P:\Admin\New M
order to man assum The tablefrom the
Y22222
Ave
The currerecommegroup witassumptincreased
INVESTMEassumptassumptrecommerecommeexpenses
DEMOGRA
The dema vested decremeNew Mexshould reactuariesand revis
• F• S• F• F• F
We did nthe curre
ON IV.
Mexico LCS\NMLCS01
meet the ammption for po
e below showCAFR for ea
Year 009 008 007 006 005 erage
ent assumptend loweringthin PERA toion of a 3.75d to 4.25% b
ENT AND ADMion, the inveion. The exend that the ended a redus. We agree
APHIC ASSUM
mographic asbenefit), disnts define thxico PERA aeflect each Ss have prepase them as n
our-year inteSix-year inter
ive-year inteive-year inteive-year inte
not receive aent assumpti
ACTUAR
13111_AuditReport_F
mortization peopulation inc
ws the histoach of the pl
PER3.23%1.29%7.65%2.06%1.49%3.14%
tion of a 4.50g this assumo see if diffe5% payroll gby increasing
MINISTRATIVEestments andperience annext experieuction of .30e with this ap
MPTIONS
ssumptions asability and mhe member sand ERB areSystem’s owared a periodnecessary. G
erval endingrval ending Jerval ending erval ending erval ending
an experiencons and the
RIAL ASSU
inal.docx
eriod. Accocreases whe
rical summalans.
RA % % % % % %
0% payroll gmption to 4.25erent payroll rowth assumg the inflatio
E EXPENSESd administraalysis reportence analys0% to the invpproach and
are the assumortality (destatus change large retire
wn experiencdic experienGRS review
g June 30, 20June 30, 200June 30, 20June 30, 20June 30, 20
ce analysis fo recent chan
MPTIONS
20
unting Standen setting a p
ary of the ave
Magistrate2.29% 12.18% 5.77%
(1.45%) 6.45% 5.05%
growth assum5%. Additiogrowth assu
mption for ERon assumptio
: As part of tive expenset for PERA dis for PERA
vestment retd the results
med rates oath before oges which ef
ement systeme. To this ece study to ed experien
008 for PER09 for ERB 007 for Magi007 for Judic006 for Volun
or the Legislnges follow.
AND EXPE
dards (GASBpayroll growt
erage active
Jud2.31.29.8
(1.96.83.6
mption PERAnally, analysumptions shRB appears on to 3.50%
determininges are offsetdid not reviewinclude sucurn assump look reason
of retirementor after retireffect the payms, the demend, the Newreview the cce for the fo
RA istrate cial nteer Firefig
lative group.
ERIENCE S
B No. 25 & 2th assumptio
e covered pa
dicial 33% 25% 85% 91%) 86% 68%
A appears hsis should beould be madreasonable .
g the investmt from the exw this assum
ch a review. tion for the i
nable.
, withdrawalement or disayment of benographic as
w Mexico PEcurrent actuaollowing:
ghters
. Our comm
STUDY
27) do not aon.
ayroll increas
ERB 3.58%4.74%4.04%2.96%2.36%3.54%
high and we e done by eade. The currbut could be
ment return xpected retumption. We For ERB, G
inclusion of
(with or withability). The
nefits. Sincesumptions
ERA and ERBarial assump
ments regard
llow
se
ach rent e
urn
GRS
hout ese e
B ptions
ing
SECTIO
P:\Admin\New M
Rates ofpaid upoand unre
Pla
PERA
Legislativ
Magistrat
Judicial
VolunteeFirefighte
ERB
Membersbenefit p
It is our eretire, anis higher working ulate retire The retirefor each of serviceage. The retireand are b
ON IV.
Mexico LCS\NMLCS01
f Retiremenn early, norm
educed bene
an
ve
te
H1wH2
r ers 5
TT
s who leave ayments, bu
experience tnd therefore,
than when euntil after beement.
ement rates division ande. Late retir
ement rates based on ag
ACTUAR
13111_AuditReport_F
nt: These ratmal, or late refits for the p
Early
N/A
N/A
N/A
Hired prior to J, 2005: age
with 18 years Hired after Jul2005: N/A
55 with 10 yea
Tier 1: 75 poinTier 2: 80 poin
before eligibut are eligible
hat employe the incidenceligible for a
ecoming elig
used by GRd are based orement rates
used by GRge and servic
RIAL ASSU
inal.docx
es form the retirement. Tplans admini
Retirem
Tier pointTier
July 50
ly 1,
ars
nts nts
Tier withTier with
bility for a see for a future
ees will oftence of retirem
a reduced retible for a ret
RS for PERAon age and
s continue af
RS for ERB ace and eligib
MPTIONS
21
basis of deteThe followinstered by PE
ment EligibilUnreduc
1: 25 years ots table 2: 30 years o
N/A
N/A
N/A
N/A
1: 25 years o75 points 2: 30 years o80 points
ervice retireme benefit if v
n wait until thment after atttirement bentirement ben
A are structueligibility forfter age 65 u
are structurebility for unre
AND EXPE
ermining theng is a summERA and ER
lity ced or graded
or 80 points
or age 60
or age 65
ment are notested.
hey are eligitaining eligibnefit. Membnefit may wo
red to coincr unreduced until age 80,
ed to coincideduced bene
ERIENCE S
e expected fmary of eligibRB:
Tier 1: age Tier 2: age
Plan 1 and age 65 withwith 8 yearyears, age or 14 yearsPlan 2: ageor 10 years64 with 5 yeyears, or 24Hired beforwith 5 yearyears Hired after with 5 yearyears
55 with 25
Tier 1: age Tier 2: age
t eligible for
ble for unredbility for unrebers electingork a number
cide with retirbenefits aftea typical ult
de with retireefits after 25
STUDY
future benefibility for redu
Normal
65 with 5 yea67 with 5 yea
Plan 1 Enhah 5 years, agers, age 63 with60 with 12 ye
s e 65 with 5 yes ears, 60 with 4 years re July 1, 200rs, 60 with 15
July 1, 2005:rs, 55 with 16
years
65 with 5 yea67 with 5 yea
immediate
duced benefeduced bene to continue r of years int
rement eligiber 20 or 25 ytimate retirem
ement eligibi years of
its uced
ars ars
nced: e 64 h 11 ears,
ears,
15
05: 64
64
ars ars
fits to efits to
bility years ment
lity
SECTIO
P:\Admin\New M
service. points. Wfor reduc One waydecremethe actuadivisions analysis PERA
State Ge State Ge State Ge State Ge State Po State Po State Ha State Ha Municipa Municipa Municipa Municipa Municipa Municipa Municipa Magistra Judicial VolunteeERB – MaERB – Fe* These p For retireA/E ratio are over move cloadjustmerecommefor State
ON IV.
Mexico LCS\NMLCS01
However, thWe would reced and unre
y that actuarinting to the
al/expected rand for ERB(if applicable
eneral – Maleeneral – Maleeneral – Femaeneral – Femaolice – Age Baolice – Serviceazardous Corazardous Coral General – Mal General – Fal General – Sal Police – Agal Police – Seal Fire – Age al Fire – Servate
er Firefightersales emale populations ar
ement, an A/between 85100% befor
oser to the acent was less ended a largGeneral and
ACTUAR
13111_AuditReport_F
hey did not acommend re
educed retire
ies analyze number of eratio, or A/E B before ande).
Age Based Service Baseale Age Baseale Service Based* e Based* rections – Agrections – SeMale Age BasFemale Age BService Basedge Based* ervice Based Based* ice Based
s
re small so les
/E ratio unde5% and 100%re and after tctual plan exthan we wo
ger increase d service ba
RIAL ASSU
inal.docx
analyze eligieviewing retement to mo
decrement rexpected me
ratio. Belowd after the ch
ed ed ased
e Based ervice Basedsed Based d
ss weight sho
er 100% is c%. As showthe experienxperience (c
ould have recin the retire
ased rates fo
MPTIONS
22
bility for unreirement rate
ore accuratel
rates is to coembers decrew is a table change in ret
ould be put on
considered cwn above, thence analysis.closer to 100commendedment rates f
or Municipal
AND EXPE
educed benes by all agesly reflect all
ompare the nrementing. Tcontaining thirement rate
A/E rat
111712162962113917102161740129
1010
n experience
conservativeere are man. In general
0%). Howevd. In particulfor male andGeneral, Po
ERIENCE S
efits at age s and serviceligibilities fo
number of aThis ratio is he A/E ratio
es due to the
io before
11% 73% 23% 69%
22% 99% 67% 13% 32%
95% 73% 07% 16%
63% 73% 00% 23% 9% 03% 02% analysis resu
. We wouldny A/E ratios, GRS adjus
ver, in many lar, we woul
d female servolice and Fire
STUDY
60 with 75 ce combinatior benefits.
ctual membreferred to afor all PERA
e experience
A/E ratio a
112%154%116%152%22%84%73%104%117%94%151%107%194%83%148%228%125%17%
No ChanNo Chan
ults.
recommend for PERA th
sted the ratecases, the d have vice based re.
ons
ers as A e
after
ge ge
d an hat es to
rates
SECTIO
P:\Admin\New M
For ERBwith the c25 years the currerecommeIn particu We recom Rates ofwho termcontributterminatiinterest. assumesreceive aterminatecontribut To value and yearalso a fuPolice, aor by a cexperien The portiThe PERrecommemember assumpt Rates ofa disabiliare set o The disamore in lby gendefor ERB. Rates ofthis assuapplies tofor non-dalthough
ON IV.
Mexico LCS\NMLCS01
, GRS recomcurrent set oof service w
ent experiencended an incular, we wou
mmend that
f Withdrawaminates emp
ions with intng with lessTypically, to
s that a portioa vested inaced membersions.
these beners of service nction of gennd Municipaombination oce. We gen
ion of terminRA report andend a reviewwill elect to ion.
f Disability: ty benefit. R
on the basis o
bility rates foine with exp
er for Munici We would
f Mortality: Tumption is a o members
disabled memthat gap ha
ACTUAR
13111_AuditReport_F
mmended noof retirementwhere we sece analysis wcrease to retuld have con
each of the
al (Before anloyment witherest or a ve than five yeo calculate won of terminctive pensions with less th
fits, GRS cufor both PE
nder for the al Fire divisioof age and s
nerally find G
nating membd experience
w of this assureceive the
If a membeRates of disaof age and i
or PERA andperience for Ppal Generalnot recomm
The most impredictor of both before mbers since as been shrin
RIAL ASSU
inal.docx
o change to t rates are cle an A/E ratwere similar tirement ratesidered high
actuaries fu
nd After Elih at least fiveested inactivears of servicwithdrawal liaating membn and the re
han five year
urrently usesRA and ERBState Police
ons of PERAservice, and
GRS’s propo
bers electinge analysis aumption in thmore valuab
er becomes ability are usncrease as a
d ERB appePERA when. GRS did nend any cha
mportant decwhen pensioand after restudies con
nking accord
MPTIONS
23
the retiremelose to 100%tio over 100%r to the last ees for membher rates for
urther review
igibility for e years of seve pension foce receive aability after fers will leav
est will terminrs of service
s withdrawal B. In additioe, State CorrA. Actuaries
may includesed assump
g a refund is re silent reghe future. Foble benefit.
disabled priosed to quantage increase
ear reasonab needed. Th
not recommeanges to this
remental vaon paymentstirement. M
ntinually showding to recen
AND EXPE
ent rates. W%, there are %. They alsexperience sbers with less
members m
w their propo
Vested Benervice may cor both PER
a refund of mfive years of
ve their contrnate and takare assume
rates that aon, GRS userections, Mus will either se gender deptions reason
often an assarding this aor ERB, GRWe find this
or to retiremtify the valuees.
ble. GRS adhey also sepend changess assumption
luation assus stop. The
Most often, gew that femalnt mortality s
ERIENCE S
While the totamany ages
so note that study. We ws than 25 ye
meeting the r
osed retireme
nefits): Currechoose to re
RA and ERB.member contf service, theributions in tke a refund. ed to receive
are a functiones withdrawaunicipal Geneset rates by apending on nable for PE
sumption in assumption.
RS assumes s to be a reas
ment, he or se of this bene
djusted disabparated disas to the disan for PERA o
umption is m mortality asender distincles live longestudies.
STUDY
al A/E ratios with less thathe results f
would have ears of servicrule of 75.
ent rates.
ently, a memeceive a refu. Members tributions wite valuation the system a The remain
e a refund of
n of both ageal rates that eral, Municipage, by servthe best fit o
ERA and ER
the valuatio We would that a vestesonable
he is eligibleefit. These
bility rates toability experiebility assumor ERB.
mortality becassumption ct rates are uer than male
seen an from
ce.
mber und of
th
and ning f
e are pal vice, of
RB.
on.
ed
e for rates
o be ence ption
ause
used es,
SECTIO
P:\Admin\New M
Mortality New Mexexperien When segood fit tpublishedcommon conservaof conse New Mexmembers In GRS’sproposedadjustmerecommeconservaadequateimprove changes reliable d Totally dmembersrecommeSince theunsure if experienPERA re GRS prodeterminreasonabused. New MexmortalityMortality plan expe For disabexperienconserva
ON IV.
Mexico LCS\NMLCS01
tables can bxico PERA isce, a publish
electing a puo the data ad tables thatamong plan
atism is imporvatism or a
xico PERA:s, post-retire
s experienced for the valuents of a threendation for atism. The pe level of conmortality forto this assu
data for furth
isabled mems. GRS’s disend a change GRS expef the table thce. We recoport.
posed chane if they areble and we r
xico ERB: G. For post-reTable with aerience, the
bled mortalitce for ERB f
atism, the sm
ACTUAR
13111_AuditReport_F
be derived os a very larghed table is
blished tableand providest should be cns but does ortant. Thergenerationa
: A different ement disabl
e analysis reuation are thee-year setbpost-retirem
post-retiremenservatism. r males becamption. We
her review of
mbers can besabled mortae to the posrience analyey have in pommend a b
ges to the ae using a pubrecommend
GRS did notetirement moa setback oftable provid
y, GRS is usfor disabled
mall sample s
RIAL ASSU
inal.docx
on the Systege plan but dpreferable.
e, the most i a reasonabconsidered: not project mefore, it is tyal table whic
set of mortaled members
port, the poshe 1971 Grouback for malement male raent female ra We unders
ause of potee recommenf the mortalit
e expected tality rates ar
st-retirement ysis report aplace for disabetter descri
ctive mortalblished tablea better des
t recommenortality, GRSf three yearsdes an appro
sing the 198mortality. Wsize does no
MPTIONS
24
m’s actual edoes not hav
important seble level of co static and g
mortality impypical to selech improves
ality rates ars and active
st-retirementup Annuity Mes and a sevtes does noates use a stand from Gntial data issd identifyingty for males
to have a shre higher thadisabled mo
nd the valuaabled mortalption of the d
ity tables bye or one basscription in th
d any changS is currentlys for males aopriate level
81 Disabled MWhile the A/Eot necessari
AND EXPE
experience ove enough m
election criteonservatismgenerationalprovement inect a static tamortality ove
re used for pe members.
t non-disableMortality Tabven-year set
ot provide anseven-year s
GRS that theysues. We wg any data isat the next e
horter life expan for all heaortality table
ation report dlity is a publdisable mort
y division, bued on experhe report of t
ges to post-ry using the 1and two year
of conserva
Mortality TaE ratios onlyly warrant a
ERIENCE S
or a publishemembers to p
eria are that tm. There are
. A static tanto the futureable with a 5er time.
post-retireme
ed member ble projectedtback for fem
n appropriatesetback and y made the d
would not recssues now inexperience a
pectancy thaalthy retireese and this sedid not specished table otality be incl
ut we are unarience. The the active m
retirement, d1994 Uninsurs for femaleatism.
ble. There iy provide a s change in t
STUDY
ed table. Sinproduce cred
the table is ae two types oable is very e so 5% to 15% le
ent non-disa
mortality ratd to 2000 wimales. The e level of provide an decision not
commend ann order to haanalysis.
an healthy res. GRS did eems reasoncify, we are or based on uded in the
able to changes ap
mortality table
disabled or aured Pensiones. Based o
is very little small level ofthis assumpt
nce dible
a of
evel
bled
tes th
t to ny ave
etired not
nable.
plan
ppear e
active ners n
f tion.
SECTIO
P:\Admin\New M
GRS revthe numbthere maBased onrecomme Other Asreport anreview thmemberson the liacashflow Recomminclude swe find thcommun
• Fvathins
• Wre
• Waa
• Ina
• Inubso
• Inthfo
ON IV.
Mexico LCS\NMLCS01
iewed the acber of activeay be a data n the small send any cha
ssumptionsnd experienche optional fos expected tability is sma
w results whe
mendations several graphhe report coication of the
or PERA, waluation suchese assumpndicated thathowing the d
We recommeeport contain
We suggest cmortization nd funding m
n the PERA nd withdraw
n Section B onfunded liabe helpful if tho analysis con the PERA hroughout thollow.
ACTUAR
13111_AuditReport_F
ctive mortali deaths comreporting pr
sample size nge to this a
s: Based once analysis aorm electiono elect life o
all, a more reen doing a pr
for the Exphs and tablemplete. Wee report:
e suggest a ch as percenptions will hat they reviewdata that waend includingned this infocommentingmethods formethod. Wereport, addit
wal decremenof the PERAbility, fundedhe impact ofould be donreport, we re
he report for
RIAL ASSU
inal.docx
ty experiencmpared to othroblem and cfor this assu
assumption.
n our review,appear reasons for retireesonly benefitsefined assumrojection.
perience Anes that are use recommend
review and nt married anave a significwed the assuas reviewed fg A/E ratios frmation. on the cont
r PERA. Thee recommentional commnts to explai
A report, the ratio and thf each individe to see if thecommend uactual, curre
MPTIONS
25
ce for ERB. her teacherschose to keeumption and
all other asonable. We s to incorporversus joint
mption on op
nalysis Reposeful in descd the followi
comment ofnd spouse agcant impact umption but for these assfor all decre
tinued approe ERB repord also commentary by grn the justificimpact of th
he annual reqdual demog
he change isusing the saent and prop
AND EXPE
They obsers’ retirementep the curren potential da
ssumptions dwould recom
rate an explt and survivoptional form e
ort: The repcribing the reng changes
f other assuge differenceon the valuano data wassumptions.
ements revie
opriateness ort contained menting on troup would bcation of the he new demoquired contrraphic assum
s reasonableame color forposed assum
ERIENCE S
rved a large t systems. Tnt active moata problems
described in mmend that icit assumptor benefits. election prov
ports preparesults of the
s to further im
mptions usee. It is not eation. The Es provided.
wed for PER
of the asset,this informahe amortizabe helpful onchanges in
ographic assribution is shmption chane. r the lines inmptions to m
STUDY
discrepancyThey believeortality table. s, we would
the valuatiothe actuarie
tion on the While the imvides better
red by GRS e study. Ovemprove the
ed in the penexpected thaERB report We recomm
RA. The ER
, funding, anation on the ation methodn the retiremrates.
sumptions ohown. It wounge was sho
n graphs make it easie
y is e
not
on es
mpact
erall,
nsion at
mend
RB
nd asset .
ment
n the uld own
er to
SECTIO
P:\Admin\New M
ACTUARIA As discusplus the amade to immediatcontributplan provActuarialretiremenof the ult Different level funddeterminfinancing The desiimportan
• B• S• F• P• B• In
These fasignifican Changesto a fundmethod ufunding runder the The cost typically compensamount pcost metcareer, opercentamember’reaches
ON V.
Mexico LCS\NMLCS01
AL COST ME
ssed earlier,administrativthe plan plutely needed ions neededvisions, mem cost methont plan to spimate contri
actuarial coding over time the pattern
g objectives o
red pattern oce of the fol
Budgetary limStability of co
lexibility of fPace of fundiBenefit securntergeneratio
ctors and thnt elements
s in member ed status wh
used. This drequired in ae plan.
of accruing expressed a
sation. For fper active mhod. This co
or can be expge of pay. Ts career sinretirement a
ACTUAR
13111_AuditReport_F
ETHODS
, the ultimateve costs of os the investmto pay bene
d to fund thember charactds are calcu
pecific periodbutions.
ost methods me, or more n or pace of of the fund a
of funding thlowing facto
mitations ontribution rafunding ng
rity onal equity
eir relative ito be consid
characteristhich is eithedifference, aany one year
benefits undas a percentflat or unit beember assuost can be epressed as tThe latter apce the initial
age.
RIAL METH
inal.docx
e cost of anyoperating thement return efits or admin ultimate costeristics, inveulation proceds of time. A
can provideflexibility in f
f the fundingand benefit s
hat is influenors to the fina
ate
mportance tdered when s
tics, plan exr more or lespplied differ
r. This adjus
der most meage of pay wenefits basemed to cont
expressed asthe value of pproach leadl value of ac
HODS
26
y retirement e plan. Thison accumulanistrative cost are determestment exp
esses which As such, it ha
for faster fufunding. Thand therefo
security cons
ced by the aancing of the
to maintaininselecting an
perience, anss favorablerently by eacstment can d
ethods is refwhen benefitd on servicetinue in servs a level perbenefits acc
ds to an increcruing bene
program is s cost is provated contrib
osts. The levmined by theperience, anddetermine a
as an influen
unding earliee choice of
ore should besiderations.
actuarial cose plan:
ng the actuan actuarial co
nd investmee than expecch cost methdistort the tru
ferred to as tts and contr
e, this cost isice. The pa
rcentage of pcruing duringeasing norm
efits is small
equal to thevided from cobutions whichvel and timine actuarial ad the actuar
and allocate nce on the le
er in a plan’san actuarial e linked to lo
st method wi
rial integrity ost method.
nt return ovected under thhod, adjusts ue cost of be
the normal cributions are s expressed ttern of this pay over a mg the current
mal cost patteand increas
e benefits paontributions h are not ng of the assumptionsrial cost meththe cost of a
evel and tim
s existence, cost method
ong term
ill depend on
of the plan
er time can lhe actuarial the level of enefits accru
cost. This cobased on as a dollar cost varies b
member’s fult year as a ern throughoes as a mem
aid
, hod. a ing
more d will
n the
are
lead
uing
ost is
by ll
out a mber
SECTIO
P:\Admin\New M
At any poaccrued contributliabilities valuationtreated, acost of acthe unfuntotal costcost dete The Entr
• EapofadyeisA
The Entrsystems.75%, useEmployethe 87 pl New Mexapproach New Mexconventioused by the Normgroup of 2004. For purpothe tradit This modyears agis requireeasy as cconventio
ON V.
Mexico LCS\NMLCS01
oint in time (liability of beions and invexceed the
n method. Aan additionaccruing benended obligatt, or it may bermination.
y Age Norm
Entry Age Noctuarially reqercentage of the plan, wccumulate toetermined bears as a pes added to thActuarial gain
y Age Norm. The 2009 ed Entry Agee Retiremenans surveye
xico PERA:h.
xico ERB: Tonal Entry AERB is a mo
mal Cost for enew entrant
oses of this tional metho
dified Entry Ao. In many ed by statuteconventionaonal Entry A
ACTUAR
13111_AuditReport_F
(i.e., the valuenefits whichvestment retuvalue of ass
Although actual cost resultsefits (normaion over a p
be expressed
al actuarial
ormal Actuaquired contr
of pay (or levwhich if paid o an amount
by amortizingercentage ofhe normal cons and losse
al Actuarial Public Funde Normal. Tnt Systems, ed using Ent
: GRS used
The methodAge Method uodification ofeach individts, based on
discussion, d as "conve
Age is no lonstates, it wa
e. The original Entry Age Age, actuarie
RIAL METH
inal.docx
uation date),h, under the urn. An unfusets on handuarial cost ms since futurl cost). Thiseriod of yead as a perce
cost method
arial Cost Mibution. This
vel dollar for from entry int sufficient to
g the unfundf increasing post to determes adjust the
Cost Metho Survey by N
The Wisconspublished inry Age Norm
the Entry A
used for Neused by mosf this convenual each yea
n actual new
we will referntional Entry
nger widely uas required bnal reason foin the era be
es needed to
HODS
27
the actuariacost method
unded actuad on the valu
methods mayre funding ofs additional crs and addin
entage of fut
d is as follow
Method – Ths cost methonon-pay rela
nto the plan o pay the exed actuarialpayroll (or le
mine the tota unfunded li
d is the mosNASRA showsin 2008 Comn December mal.
Age Normal m
ew Mexico Est public emntional Entryar, the normentrants for
r to this ERBy Age."
used. It wasby statute. Inor the modifiefore compuo make four
al cost methd, is expectearial liability wuation date ay differ in howf this amouncost may beng it to the nure salaries
ws:
his method isod determineated plans) fto the last a
xpected bene liability ove
evel dollar foal actuarially ability each
st common mwed 94 out o
mparative St2009 (revise
method for P
ERB differs sployee retire
y Age Methomal cost is der the five-yea
B method as
s used by mn some stateied Entry Aguterized datapresent valu
od may deteed to be fundwill exist if thas measuredw this unfun
nt is not cons determined
normal cost tand include
s used to dees the normfor each ind
assumed retiefit. An addr a period no
or non-pay rerequired coyear.
method usedof 126 survetudy of Majoed in May 20
PERA and w
significantly ement systed. Rather th
etermined foar period en
"modified E
many public ses (not New
ge was that ia processingue calculatio
ermine the ded by past he accrued d by the ass
nded liability sidered in thd by amortizito arrive at ted in the nor
etermine the al cost as a ividual memirement ageitional cost iot to exceedelated plansntribution.
d by public eyed systemor Public 010), had 79
we agree with
from the ms. The mehan calculatr a hypothetding June 30
Entry Age," a
systems manw Mexico), it s
t was twice g. To use thons for each
set is e ng he rmal
level mber
, will s
d 30 s) and
ms, or
9% of
h this
ethod ing tical 0,
and
ny still as e
SECTIO
P:\Admin\New M
member per memof individ This is noNevertheEntry Agbecause
• Hypo Modifarbitrown p
• Volat The hindicarecomtheretherenew h
• Stair AlthoperioEntryteachage cthe s
• Poten
Whileentrybecagrouphires
• Inacc
Use obeingliabiligains
ON V.
Mexico LCS\NMLCS01
each year. mber per yeaduals (the hy
ot to say thaeless, we rece. Most statof several w
othetical grou
fied Entry Agrary group ofprofile.
tility of group
hypothetical ated they revmmended. Te may be a ne may be a lahires may no
step versus
ough the normd to another
y Age normahers hired in could be signame in 2004
ntial bias to
e modified E age increasuse the averp as a wholemore likely
curate meas
of the modifig valued fromties during t
s and losses
ACTUAR
13111_AuditReport_F
To use modr, and the ot
ypothetical g
at modified Ecommend thtewide syste
weaknesses
up may not f
ge calculatef individuals
p selected
group of neviewed this gThe profile o
need for matarge need foot be an app
smooth cha
mal cost rater would be g
al cost rates a school in
nificantly diff4 as it was in
understate a
Entry Age mases, it wouldrage entry a
e. This is beto continue
urement of a
ied Entry Agm one year the next valu.
RIAL METH
inal.docx
dified Entry Ather two calcroup).
Entry Age is hat conventioems switchewith the mo
fit individuals
es a normal c. Each mem
ew entrants isgroup at the
of new entranh and scienc
or younger tepropriate pro
anges
e remains fixreater than fchange slow2004 with thferent. But tn 1999.
average entr
ay be approp tend to be tge for a gro
ecause turnoemploymen
actuarial gai
ge method doto the next; tuation, and a
HODS
28
Age, actuarieculations we
an inapproponal Entry Agd to the con
odified Entry
s
cost rate for mber's norma
s typically upe last experients in any gice teachers eachers becoxy for the en
xed for five yfor conventio
wly over five hose hired inthe average
ry age
priately constoo aggressiup of new hi
over is highet.
ns and losse
oes not reflethereby leada different re
es only needere made per
priate methodge be considventional EnAge method
all individuaal cost is not
pdated everence analysiiven period cfrom genera
cause of growntire system
years, the chonal Entry Ayears. For
n that schooentry age o
servative for ive in the opires is neces
er at the youn
es
ect the true nding to incorresult in the m
ded to makeriodically on
d for fundingdered to repntry Age oved:
als based ont related to t
ry five years is and no chcould vary. al industry. wth. The 5 y
m.
hanges fromAge, because
example, col in 1999. T
of the entire s
r a group whpposite envirssarily youngnger ages, le
normal cost rect expecte
measuremen
e two calcula a smaller g
g purposes.place modifieer the years
n the profile othat member
or so. GRShanges wereOne period,Five years layear period o
m one five yee conventionompare the n
Their averageschool is abo
ere the averronment. Thger than for eaving the o
of the grouped accrued nt of actuaria
ations roup
ed
of an r's
S e
ater, of
ear nal new e out
rage his is a
older
p
al
SECTIO
P:\Admin\New M
• GASB
The GDisclNorm
This
BaseGRS hypotSecoinsteaRate memfully r
RecommMethod fnormal cnot believAge Meth ASSET VA A primaryfluctuatiomethod wgood assmarket vbalancing Neither bthe actuapredictabmeasurevalue is avalue ma
ON V.
Mexico LCS\NMLCS01
B Actuarial C
Guide to Imposure by Sta
mal Actuarial
A method ueach indiviover the eaexit age(s). year is calleprovided foNormal Cos
is the traditio
ed on this lanfor New Methetical grou
ond, GRS usad of the indas the cost bers with thireflects the n
mendation: for ERB. If Nosts would lve the differehod.
ALUATION M
y funding poons make thiwhich smootset valuationalue but whig fit (measur
book nor maarial contribuble employer of the fund’a realistic cuay not be a v
ACTUAR
13111_AuditReport_F
Cost Method
plementationate and LocaCost Metho
under which idual includ
arnings or se The portion
ed the Normr at a valuatsts is called
onal approac
nguage, we dexico ERB isup is inconsises an aggre
dividual Entryfor the new is benefit strnew benefit
We recommNew Mexico ikely increasence will be
ETHODS
olicy goal is ts goal difficuthes out thesn method plaich will also red against m
rket value ofution rate forr contributions true value
urrent measuvery meaning
RIAL METH
inal.docx
ds
n of GASB Sal Governmeod that is an
the Actuariaed in an Act
ervice of the n of this Actu
mal Cost. Thtion date by the Actuaria
ch to the En
do not believ in complianstent with “e
egate Entry Ay Age Normtier of memb
ructure inclueligibilities.
mend that GRERB were t
se. This wousignificant,
to have stabult to achievse fluctuatio
aces values oproduce a smarket value
f these asser an ongoingns, but it ign (i.e., a poor
ure of the fungful figure fo
HODS
29
Statements 2ent Plans anapproved m
al Present Vatuarial Valuaindividual buarial Presee portion of the Actuaria
al Accrued L
try Age Met
ve that the mnce with GASeach individuAge Normal al Method. bers who haded in the A
RS switch toto adopt the uld decreasewe recomm
bility in the coe. Thus, mons in supporon a plan’s a
smoother pate) and smoo
ets is generag pension planores sizeabr fit to markend, but on a or a pension
25, 26 and 2nd Employeemethod unde
Value of the Pation is allocabetween ent
ent Value allothis Actuaria
al Present Vaiability.
thod.
modified EntSB for three ual included Method on tFinally, GRS
ave yet to beActuarial Valu
o the convenconventiona
e the actuarend a chang
ontribution post actuariesrt of achievinassets whichttern of costothness.
ally felt to bean. Book vable appreciatet value). On
long-term bfund. Furth
27 on Pensioes describeser the param
Projected Beated on a letry age and aocated to a val Present Value of Futur
try Age Methreasons. Fin an Actuarthis hypotheS has set thee hired. Theuation, yet th
ntional Entryal Entry Agerial liability. Age to the con
pattern. Largs use an assng level conh are relateds. This is a
e appropriatealue producetion and is nn the other h
basis, one dahermore, sha
on Reportings the Entry Aeters as follo
enefits of vel basis assumed valuation
Value not re
hod used by First, the userial Valuatio
etical group e Normal Co
ere are no he Normal C
y Age Normae method, theAlthough wenventional E
ge market vaset valuationtributions. A
d to current question of
e in determines smooth ot a good hand, markeay’s market arp short-ter
g and Age ows:
e of a n.”
ost
Cost
al e e do Entry
alue n A
ning
et
rm
SECTIO
P:\Admin\New M
swings infund the The goalThis is pain asset vchanges values isa current Desirable
• Tst
• T• T
va• T
vaa
• Ina
• Tsea
New Mexvaluationgenerallythe actuadeterminyear, so process wexampleLikewisein the cu Theoreticis createdof the prethis caseyear perirecognitioyears in e
ON V.
Mexico LCS\NMLCS01
n market valplan (i.e., no
of the actuaarticularly imvalues, whein contributi
s not necessat economic c
e characteris
The method statements.
The method sThe theoreticalue of asse
The method salue should ssumptions
nvestment dend vice vers
The value proensible and sset values.
xico PERA n method usey referred to al return on med each yeathat after fouwhere the d, in the curre, 50% and 2rrent year.
cally, if the ad. If the actevious four y
e, the AVA shod have beeon of all gainequal amou
ACTUAR
13111_AuditReport_F
ue can resuot very smoo
arial asset vamportant durin factored inion levels. Iarily a true rclimate or a
stics of an a
should be si
should be eacal underpinnets. The valushould smooconverge toare met. ecisions sho
sa. oduced shoushould not c
(including Med by New Mas a Four-Y
market valuear. Twenty-fur years, theifferences frent year, 75%25% of the d
actual return ual returns oyears, it wouhould equal en recognizen and lossesnts.
RIAL METH
inal.docx
lt in large fluoth).
aluation meting periods onto the fundin this case,
revaluing of tshort-term re
ctuarial asse
mple to ope
asy to explainings shouldue producedoth the effeco the Market
ould not be a
uld be realistcause other
Magistrate, Mexico PERAYear Smoothe of assets (five percent e entire diffeom the three% of the diffeifference fro
is as expecon MVA are uld result in nthe MVA sin
ed. We find s occurring i
HODS
30
uctuations in
thod is to smof volatile cang valuation“unnecessathe assets ineaction to sp
et valuation
rate. It shou
in to all interd be solid and should accct of market f
Value in a r
affected by t
tic; the pricevariables to
Judicial anA to develop
hed Market V(MVA) and thof this differrence has bee previous yerence from
om two and o
cted, no newexactly equano deferral once all differethis methodn any given
the employ
mooth or redapital marketn, produce sary” implies tnvolved but pecific news
method incl
uld be readil
rested partiend not producount for marfluctuationsreasonable p
he actuarial
e tag placed o be adjusted
nd Volunteep the ActuarValue methohe expectedrence is recoeen recogni
years are par three yearsone year ago
w difference oal to expecte
of gains or lorences that od reasonable
year over th
yer contributi
uce investmts in which audden unnethat the chanrather a fluc
s.
ude the follo
ly calculable
es. ce a long-terket and boosuch that thperiod of tim
asset valua
on assets sd to account
er Firefighterial Value of od. The diffed return on Aognized in thzed. This brtially recogn
s ago is recoo, respective
or deferral ged returns oosses duringoccurred prioe since it leahis year and
ions required
ment fluctuatiabrupt changecessary nge in asset ctuation refle
owing:
e from financ
erm lag to theok values. e smoothed
me if all
ation method
hould be t for unrealis
ers): The asAssets (AVA
erence betweAVA is he AVA eachecomes a ronized. For ognized. ely, is recogn
ain or loss bon MVA for eg this period.or to this fouds to full the next thr
d to
ions. ges
ecting
cial
e fair
d,
stic
sset A) is een
h olling
nized
base each . In
ur-
ree
SECTIO
P:\Admin\New M
We find oexpectedtaken on invested.interest oimpact offuture phprojectio8% is eaimmediatcreated aafter threexpected The meththe valuamethodoending 2date by tamount iyears thawe do. S New Mexis generabetween Twenty pthe entiredifferenc The methvaluation To verify the fiscalAVA as oTheoretic Five yearNASRA PMexico P Corridorthe smoofor each
ON V.
Mexico LCS\NMLCS01
one minor flad interest or
the AVA ins. If the MVAon the unrecf this method
hase-in amoun can be fourned on the tely recognizand the AVAee years. Wd return on th
hodology thaation date bylogy, we ind009 using ahe amountss the sum of
at have not bSee Exhibit 1
xico ERB: Tally referred the actual re
percent of the difference es from the
hodology than date by the
the GRS ml year endingof the valuatcally, we sho
rs is the mosPublic Fund
PERA may w
r: There areothing periodplan:
ACTUAR
13111_AuditReport_F
aw with GRSreturn on thestead of the
A returns 8%cognized phadology, we hunts using eund in ExhibMVA, a sma
zing 8% inteA will equal the recommenhe unrecogn
at GRS empy 25% of thedependently n alternative deferred frof the appropbeen yet rec1 in the Appe
The asset vato as a Fiveeturn on MVis differencehas been refour previou
at GRS empe amounts de
ethodology, g 2009 usingion date by ould get the
st common ssurvey. A f
want to cons
e two basic fd and the co
RIAL METH
inal.docx
S’s applicatioe future phaMVA. Theo
% as expectease-in amouhave projectstimated noit 2 in the Apall residual berest on the fhe MVA whend the assetnized phase-
ploys to dete gains and localculated t
e approach. om the previpriate percencognized. Thendix.
aluation meth-Year Smoo
VA and the ee is recognizecognized. Tus years are
ploys to deteeferred from
we indepeng an alternat20% of the gsame answe
smoothing pfour-year smider changin
features of arridor aroun
HODS
31
on of this mese-in amoun
oretically, thisd, a small phnts is immeded the fundin-investmenppendix. It sbase is creatfuture phaseen all current valuation m-in amounts.
rmine the AVosses for thehe AVA for NThis approa
ous three yentage of the oheoretically,
hod used byothed Marketexpected retuzed in the AVThis becomepartially rec
rmine the AVm the previou
ndently calcutive approacgains and loer, and we d
period amongmoothing perng to a five-y
n asset smod MVA. The
ethod. Thernts. Essentis amount is hase-in basediately recogng value wit
nt cash flow.shows that eted under the-in amountsnt phase-in amethod be ch.
VA is to adjue prior four yNew Mexicoach adjusts tears. As meoriginal diffewe should g
y New Mexict Value methurn on MVA VA each yeaes a rolling pcognized.
VA is to adjuus four years
ulated the AVch. This apposses for thedo. See Exh
g public planriod was useyear smooth
oothing methe table below
re is no refleially, the exppart of the M
e will be cregnized. To ith and witho. The resultseven if the ase current mes, no new phamounts arehanged to re
ust the expeyears. To ve
o PERA for tthe MVA as
entioned aboerences fromget the same
co ERB to dehod. The difis determine
ar, so that aftprocess whe
ust the MVAs.
VA for New proach adjuse previous fivhibit 1 in the
ns (57%) baed by 17% ofing period.
hod: the numw details the
ection of pected returnMVA and is ated unless illustrate the
out interest os of this ssumed rateethodology. hase-in is fully recogn
eflect the
ected AVA aserify the GRhe fiscal yeaof the valua
ove, the defem the prior the answer, an
evelop the Afference ed each yeater five year
ere the
A as of the
Mexico ERBsts the expecve years. Appendix.
sed on the 2f the plans.
mber of yearese two featu
n is
e on the
e of By
nized
s of RS ar ation erred hree nd
AVA
ar. rs,
B for cted
2009 New
rs in ures
SECTIO
P:\Admin\New M
P
E
J
M
V The corrifrom beinmethod wcurrently
1. Ma2. Pre3. Pre4. 805. 126. Fin
(2,7. Fin8. Inc
Actuarialsmootheunder aclike New in the AV AlthoughLegislatuMVA anddifferenc
ON V.
Mexico LCS\NMLCS01
Pl
PERA Fund
ERB
Judicial
Magistrate
Volunteer Fi
idor essentiang too far frowould ordinahave a corr
arket Value ateliminary Actueliminary AVA% of Market V0% of Market
nal Actuarial V not less than
nal AVA / MVAcrease to the
standards od values wit
ctuarial standMexico ERB
VA. At a ratio
h we are not ure Council Sd AVA for thee.
ACTUAR
13111_AuditReport_F
lan
refighters
ally puts a firom the MVA arily defer. Hridor:
t End of Yearuarial Value aA / MVA ratio Value t Value Value at End n 4 and not grA ratio (6 / 1)Unfunded Lia
of practice inhin a reason
dards but it iB’s ratio, moo of 120%, o
recommendService shoue plans and
RIAL METH
inal.docx
Asset Sm
Smoo
rm limit on thby forcing t
Here is how
New Mexic($ i
r at End of Yea(2 / 1)
of Year reater than 5) ability
ndicate that anable range s suggested
ore than 30%over 20% of
ding New Meuld be awarewhether the
HODS
32
moothing Me
othing Perio
4 years
5 years
4 years
4 years
4 years
he AVA/MVAhe recognitioa 20% corrid
co PERA ann millions)
PERA F $ 8,
ar $ 12, 14 $ 7, $ 10,
) $ 10, 1 $ 2,
a smoothingaround the
d. When the% of the inve
investment
exico PERA e of the signe Legislature
ethod
od
A ratio. Theon of gains odor would w
nd ERB
Fund 796 $575 $43% 037 $555 $
555 $20% 020 $
g method forMVA. A cor
e AVA/MVA restment losse
losses are n
and ERB adificant differe
e Council Se
Corridor
N/A
N/A
20%
20%
N/A
e corridor preor losses tha
work for the p
ERB 7,114 9,366 132% 5,691 8,536
8,536 120%
830
r assets shorridor is not aratio becomees are not bnot being rec
dopt a corridence that ex
ervice is com
r
events the Aat the smootplans that do
Volunteer Firefighters
$ 34.0$ 48.2
142%$ 27.2$ 40.8
$ 40.8120%
$ 7.4
uld produce a requiremees about 13
being recogncognized in
dor, we thinkxists betwee
mfortable with
AVA thing o not
s
%
%
ent 2%
nized AVA.
k the n h this
SECTIO
P:\Admin\New M
AMORTIZ The AnnStandardunfundedJune 15, period, uper annupaymentaggregatsince cov The curreand amoand Newthis plan solution t
ON V.
Mexico LCS\NMLCS01
ATION METH
ual Requiredds No. 25 is d accrued lia2006. The sing payme
um. For ERBs that rise 3te salaries fovered payrol
ent contributrtize the net
w Mexico ERis in surplusto the fundin
ACTUAR
13111_AuditReport_F
ODOLOGY
d Contributiocalculated a
ability over aunfunded liants that rise B, the unfund.75% per anor the pay-rell is assumed
tions being pt unfunded liB. The currs. We recomng problem f
RIAL METH
inal.docx
on (ARC) cuas the sum oa period not tability for Ne4.5% (no in
ded liability nnum. Such elated benefd to increase
paid into theability over 3
rent approprmmend New for the plans
HODS
33
rrently definof normal costo exceed 30
ew Mexico Pcrease for Vis amortizedpayments s
it plans (levee at the sam
e system are30 years for iations are sMexico PERaffected.
ned under Gost plus an am0 years for f
PERA is amoVolunteer Fird over an opeshould remael dollar for t
me rate.
e not sufficienr New Mexicosufficient for RA and ERB
overnmentamount that wfiscal years bortized over arefighters anen 30-year pin a level pethe non-pay
nt to pay theo PERA, MaVolunteer F
B develop a
l Accountingwill pay off thbeginning afan open 30-
nd Legislativperiod, usingercentage of
related plan
e normal cosagistrate, JuFirefighters a
long-term
g he fter -year e) g fns),
st dicial
and
SECTIO
P:\Admin\New M
This sect
• R
• R
• Cpinth
• Aga
• CB
SAMPLE M Generallymathemathose actopinion odifferencgenerallygenerallyby no mobetween cost. New Mexmembersfor activedifferent this, we amember differencinactive sneed furt
• D
–
• Db
ON VI. ACT
Mexico LCS\NMLCS01
tion of our re
Results of Bu
Results of Bu
Content of therovisions, da
nformation thhe finding.
Adequacy of ains and/or nd actuarial
Compliance wBoard.
MEMBER CAL
y accepted aatics and thetuarial stand
on the best wes in the cal
y accepted dy look for liabore than 1%.past and fut
xico PERA:s from GRS e members wmembers buare unable toliabilities. Ines between sample calcuther review a
Decrements g
Appears tbut the re
Death and disenefits. Rep
TUARIAL V
13111_AuditReport_F
eview discus
uck’s review
uck’s review
e actuarial rata considerhat another a
the informatlosses and tmethods.
with the disc
LCULATIONS
actuarial stae framework dards to comway to makelculated resudegree to whbility (presen. Actuaries ture service
: We receivefor the June
were not comut not one coo render an n addition, wour results aulations werare summari
generally co
that the retireport states t
sability beneport indicate
VALUATION
inal.docx
sses the follo
of sample m
of projection
eport with rered, actuariaactuary, unfa
tion providedthe effect of
closure requi
ndards and for calculati
mplex calculae those compults, these dhich results cnt value) rescan differ on, so we will t
ed sample me 30, 2009 Pmplete resultomplete calcopinion on t
we were unaand GRS forre a close maized as follo
orrectly code
rement decrethat it is beg
efits need to es that all dis
N RESULT
34
owing aspec
member calc
ns.
egard to discal methods, vamiliar with t
d in the actuchanges in
irements of G
practices pring the actuaations, differeplex calculatifferences mcan differ to sults that diffn how the liatypically acc
member calcPERA valuatits. We receculation for athe accuracyble to obtainr the active satch. Our cows:
d for retirem
ement is beiinning of the
be reviewedsability bene
TS REVIEW
cts of the act
culations.
closure of acvaluation prothe situation
uarial report wplan provisio
Government
rovide actuaarial results.ences may etions. Althou
may not be mbe consider
fer from anotability valuescept a higher
culations for ion. The sa
eived calculaa single activy of GRS’s cn responses sample calconclusions f
ment, disabili
ng calculatee year.
d to determiefits are assu
W
tuarial valua
ctuarial assuocedures, asn, would requ
with regard ons, actuaria
tal Accounti
ries with the. When it coexist due to ugh this may
material. Thered material.ther actuary
s should be dr difference o
several activmple calcula
ations by decve member. calculations o
to our quesculations. Oufor this revie
ity, death, an
ed in the mid
ne if valuingumed to be n
ation results:
umptions, plassets, and ouire to appra
to analysis oal assumptio
ng Standard
e basic omes to applindividual y lead to ere is no . However, w
y’s calculatiodetermined, of 5% for no
ves and inacations providcrement for Because oof active tions regardur results forw and items
nd withdraw
ddle of the ye
g non-duty non-duty rela
an other aise
of ons,
ds
lying
we ns split
ormal
ctive ded
of
ding r the
s that
al.
ear,
ated.
SECTIO
P:\Admin\New M
–
–
–
–
• Vtoreab
• E
–
• S
• R
• C
–
–
• Mdfob
After our Cavanauof the Jupercenta
ON VI. ACT
Mexico LCS\NMLCS01
For Munic50% (instdeaths bepay. For Munic40% of paas a duty decremenFor State and the ahaving a mFor Municminimum
Various calcuo confirm hoetirement liand with 25.3e reviewed f
Eligibility for t
For State credited s
Salaries prop
Retired benef
COLA for reti
The summretired mevaluation We did nothe COLA
Minor changeeath after te
or actives whefore retirem
review, we ugh Macdonane 30, 2009ge change.
TUARIAL V
13111_AuditReport_F
cipal Fire antead of 30%)enefits are a
cipal Police aay and the adisability be
nt date. General, thccrued beneminimum of cipal Generaof 65% of p
ulated benefw these amobility for a P
33 years at afor all PERA
the different
Police, it doservice per y
perly projecte
fits for option
red benefits
mary of the lember. In thdate instead
ot match theA was delaye
e to terminatermination coho die after tment.
received theald Consultin
9 valuation p
VALUATION
inal.docx
d State Polic) of pay andssumed to b
and Fire, theaccrued beneenefit and us
e disability befit. The rep35% of pay
al and State ay and the a
fits appear toounts were ulan 2 memb
age 60. We A plans.
benefits gen
oes not appeyear) was inc
ed.
nal forms of
s is valued co
iability did nhe detailed cd of being de
e liability for ted too long.
tion benefit vould improvetermination b
e June 30, 2ng, LLC. Beerformed by
N RESULT
35
ce, the deatthe accrued
be non-duty
e disability befit. It appeased projected
benefit was vport does no. Police, the d
accrued ben
o use differeused. For eer was showbelieve 25.3
nerally calcu
ear that the ecluded for el
payment va
orrectly exce
ot match thecalculation, itelayed for 2 the Judicial t
valuation fore accuracy. but before re
010 valuatioelow is a sumy GRS from t
TS REVIEW
th benefit wad benefit. Threlated whic
benefit was vars the bened service ins
valued as tht describe th
disability bennefit.
ent service aexample, for wn with 10.333 years is c
ulated correc
enhanced seligibility purp
alued correct
ept for Judic
e detailed cat appears thcalendar yeterminated v
r active memGRS is not
etirement or
on report frommary of thethe Cavanau
W
as valued ashe report stach has a min
valued as theefit may havestead of serv
he minimum he disability
nefit was va
mounts but Municipal F
33 years of scorrect. This
ctly.
ervice creditposes.
tly.
cial Plan.
alculation fore COLA was
ears. vested mem
mbers for benvaluing anydeferred ve
m PERA’s ce results of tugh Macdon
s the minimuates that all nimum of 30%
e minimum oe been valuevice at the
of 35% of pabenefit as
lued as the
we were unaire, the norm
service at ags situation sh
t (1.2 years o
r the Judicias applying o
mber. It appe
nefits paid uy death beneesteds who d
current actuatheir replicatnald report a
m of
% of
of ed
ay
able mal e 60 hould
of
al on the
ears
pon efits die
ary, tion
as a
SECTIO
P:\Admin\New M
Based oncases maunderstaliability ca New Mexactuarial assumpt We revieinactive mare summ
• D• B• E• S• S• R• C• M
dd
• Mbna
ON VI. ACT
Mexico LCS\NMLCS01
State GenState PolicMunicipal Municipal Municipal
n these resuaterially greanding is thatalculations f
xico ERB: Wvaluation to
ions and cal
ewed samplemembers anmarized as f
Decrements cBenefit levelsEligibility for tSalaries propService was cRetired benefCOLA for retiMinor change
eath after teeath benefit
Minor changeeneficiary ofot retiremennnuity as the
TUARIAL V
13111_AuditReport_F
Perce
neral ce General Police Fire
ults, it appeaater when cot Cavanaughfrom GRS to
We reviewedo ensure thatculated the
e member cand found ourfollows:
correctly cods correctly cathe different
perly projectecalculated afits for each red benefits
e to terminatermination cos for actives
e to death bef an active m
nt eligible. Gey do for act
VALUATION
inal.docx
ent Change i
rs that GRSompared to th Macdonald
o reconcile th
d sample met they valuedliabilities co
alculations sr results were
ded for retirealculated forbenefits cor
ed. nd projectedoptional for
s is valued cotion benefit vould improves or deferredenefit valuat
member will eGRS may contive member
N RESULT
36
n Value Due
’s valuation the results od was also uhe difference
ember calcud the correctrrectly on an
sent to us bye a close ma
ement, disabr retirement, rrectly calcu
d correctly. m of paymeorrectly. valuation fore accuracy. d vesteds. ion for activeelect a refunnsider valuinrs upon term
TS REVIEW
e to TransitioActuarial Accrued Liability (0.7)% (2.8)% (1.3)% (1.4%) (0.7)%
results wereof PERA’s cuunable to getes between t
ulations fromt benefit leven individual b
y GRS for ERatch. Our co
bility, death, disability, delated.
nt valued co
r active memGRS is not
e members.nd of contribng the greate
mination.
W
on
Normal Amou(2.7)(7.7)(5.4)(4.2)(3.7)
e conservatiurrent actuat detailed sathe results.
m the June 30els, used thebasis.
RB for severonclusions fo
and withdraeath, and w
orrectly.
mbers for benvaluing any
GRS assuutions if the er of the refu
Cost unt % % % % %
ve and in sory. Our
ample memb
0, 2009 ERBe correct
ral active andfor this review
awal. ithdrawal.
nefits paid uy termination
mes a member wa
und or the
ome
ber
B
d w
pon n
as
SECTIO
P:\Admin\New M
REVIEW O
New Mexratio andand an oappeared
New Mexand amochange itwo assuterminatereasonabfor projecgrow at 1One, Newslightly innot reasoperformesensitivit
CONTENT
The AmecommunknowledgThereforeor plan to
Howevermeasurinincluded,communan actuathe elem
The follo
• Tco
• Ain
• Aain
• Aad
ON VI. ACT
Mexico LCS\NMLCS01
OF PROJECTI
xico PERA: contribution
open group 3d reasonable
xico ERB: Wrtization pern retirement
umptions we ed membersble approachctions over a1.5% per yeaw Mexico’s tn the next 20onable and ied with no poy of ERB’s p
T OF THE ACT
erican Acadeication shouge and undee, the form ao another.
r, the Acadeng pension o, either direcications. Sorial valuationents listed s
wing is a list
The name of ommunicatio
An outline of ncluded in thA statement a
nd financial nformation. A summary o
ctive, retiredisplay of the
TUARIAL V
13111_AuditReport_F
IONS
: We reviewn rate beginn30-year projee.
We reviewedriod beginnint eligibility fosuggest mo
s will take a rh, we would a period of fiar over the ptotal populat0 years. Thes an aggresopulation groprojection re
TUARIAL REP
emy of Actuauld meet the erstanding ofand content
my has issuobligations actly or by refeome of the en report is th
should be co
t of the spec
the person oon is intendethe benefits
he actuarial das to the effeinformation
of the membed, and termine characteris
VALUATION
inal.docx
wed limited oning June 30ection based
d the outputng June 30, r future new
odifying. Firsrefund in therecommendve to ten ye
projection petion and numerefore, we bsive assumpowth (stablesults to the a
PORT
aries has staneeds of thef the users aof an actuar
ed the Actuaand communerences to plements wou
he most comvered in the
cific element
or firm retained to serve. being discudeterminatioective date owere compi
er informationated-vestedstics of each
N RESULT
37
utput from a0, 2008 based on the June
t from a 30-y2009 based
w hires. The rst, it appearse first year ofd assuming aars. Second
eriod. Basedmber of schobelieve that ption. As a rpopulation
active popul
ated, “The foe particular cand the actuarial report ma
arial Standanicating the rprior commuuld not be pe
mplete picturee report, even
s:
ning the actu
ussed or valuons. of the calculaled, and the
on, separated. Actuariescategory an
TS REVIEW
a 5-year projed on the stae 30, 2009 v
year projectio on the curreresults appes that GRS af the projecta slower payd, the actived on populatool age childan assumptresult, we reonly). We alation growth
orm and concircumstancary’s relationay vary cons
rd of Practicresults. Thenication, in pertinent in ae of the actun if only brie
uary and the
ued and of a
ations, the de sources an
ed into signifs are encournd reconcilia
W
ection of theatutes in plavaluation. T
on of the plaent statutes,
eared reasonassumes alltion. While tyout of refune population tion projectioren is expection of 1.5% ecommend Ealso recommh assumptio
tent of any aces, taking innship to the siderably fro
ce No. 4, whey list specifipension actull communic
uarial status efly.
e purposes th
any significa
date as of whnd adequacy
ficant categoraged to inclation with pri
e plan’s fundace at that timThe results
an’s funded , which inclunable. There non-vestedthis is a nds to this gris assumed
ons from Procted to declingrowth per y
ERB projectimend analyzi
n.
actuarial nto account tusers.”
om one actua
ich deals wic elements tuarial
cations, but sof the plan,
hat the
nt benefits n
hich the memy of such
ories such asude a detaileor reported
ded me
ratio ude the e are
roup to
oximity ne year is ons be ng the
the
ary
th to be
since all
not
mber
s ed data.
SECTIO
P:\Admin\New M
• AArere
• Amcoloma
• Apwinof
• Aa
We havereports chistoricalinformati
New Mex
• CsFof
RECOMM We havevaluation New Mex
• S• S
of• C
o• W• T
o• D
ON VI. ACT
Mexico LCS\NMLCS01
A summary oActuaries areeconciliationeturn, and an
A descriptionmethod. Chaommunicatio
ong-term trenmethods wou
lso be commA statement o
urpose of thwhich these anformation ref the items u
A disclosure n incomplete
e reviewed thcontained mol informationon. The rep
xico PERA:
Changes in ahould be stairefighters, tf those chan
ENDATIONS F
e the followinn results to in
xico PERA Show detailedShow historic
f Assets. Clarify if payr
r projected iWe recommeThe active mo
n plan expeDescribe the
TUARIAL V
13111_AuditReport_F
of asset infore encouraged with prior reny other recof the actua
anges in assons should bnd of costs r
uld result in amunicated. of the findinge communic
are based. Tegarding finaunderlying thof any facts e understan
he June 30, ost of the elen and severaports did not
:
assumptions ated and thethe liability imnges was no
FOR THE REP
ng suggestionterested pa
Fund: d gain/loss a
cal Market V
roll shown inn the valuat
end includingortality tablerience. assumed co
VALUATION
inal.docx
rmation and d to include eported asseonciliation itarial assumpsumptions anbe stated anresulting froma significantl
gs, conclusiocation and a The communancial reporthese actuariawhich, if noding of the c
2009 actuarements requal additional
contain the
and methodir effects notmpact was not included in
PORT
ons we believarties:
analysis by sValue of Asse
n valuation reion process.g a reconciliae used shoul
ommenceme
N RESULT
38
derivation oan asset su
ets showing ems.
ptions and cond methods d their effecm the continly increased
ons, or recomsummary o
nication shoting. Actuaral determinat disclosed,
communicati
rial valuationuired by ASOsummaries ofollowing re
ds from thosted. For PE
noted for chan the June 30
ve will impro
source. ets and retur
eport is actu. ation of the pd be describ
ent age for d
TS REVIEW
of the actuarimmary by ctotal contrib
ost method afrom those u
cts noted. If nued use of p or decrease
mmendationf the actuari
ould include aries are encoations. might reasoion.
n reports preOP No. 4. Soof the memb
equired elem
se used in prERA, Legislaanges in ass0, 2009 valu
ove the comm
rns on Marke
al reported (
participant dbed as a pre
deferred ves
W
ial value of acategory of inbutions, bene
and the asseused in prevthe actuary present assued cost basi
ns necessaryial determinaapplicable aouraged to in
onably be ex
epared by GRome reportsber data and
ment:
revious comtive Division
sumptions buuation report
munication o
et Value and
(annualized)
data from theescribed tabl
ted member
assets. nvestment aefits, investm
et valuation vious expects tha
umptions ans, this shoul
y to satisfy tations upon
actuarial nclude deriv
xpected to le
RS. The GRs included d asset
municationsn and Voluntut a descriptts.
of actuarial
d Actuarial V
) by New Me
e prior year.e or table ba
rs.
nd ment
at the nd ld
he
ation
ead to
RS
s teer tion
Value
exico
ased
SECTIO
P:\Admin\New M
Magistra• S• S
of• C
o• C• D
Judicial:
• S• S
of• C
o• C• D
Voluntee
• S• S
of• W• D
New Mex
• S
ON VI. ACT
Mexico LCS\NMLCS01
ate: Show detailedShow historic
f Assets. Clarify if payr
r projected iClarify if 2% lDescribe the
: Show detailedShow historic
f Assets. Clarify if payr
r projected iClarify if 2% lDescribe the
er FirefighteShow detailedShow historic
f Assets. We recommeDescribe the
xico ERB: Show detailed
TUARIAL V
13111_AuditReport_F
d gain/loss acal Market V
roll shown inn the valuatoad for dataassumed co
d gain/loss acal Market V
roll shown inn the valuatoad for dataassumed co
ers: d gain/loss a
cal Market V
end includingassumed co
d gain/loss a
VALUATION
inal.docx
analysis by sValue of Asse
n valuation reion process.
a correctionsommenceme
analysis by sValue of Asse
n valuation reion process.
a correctionsommenceme
analysis by sValue of Asse
g a reconciliaommenceme
analysis by s
N RESULT
39
source. ets and retur
eport is actu. s is applied tent age for d
source. ets and retur
eport is actu. s is applied tent age for d
source. ets and retur
ation of the pent age for d
source.
TS REVIEW
rns on Marke
al reported (
to normal codeferred ves
rns on Marke
al reported (
to normal codeferred ves
rns on Marke
participant ddeferred ves
W
et Value and
(annualized)
ost as well asted member
et Value and
(annualized)
ost as well asted member
et Value and
data from theted member
d Actuarial V
) by New Me
s active liabirs.
d Actuarial V
) by New Me
s active liabirs.
d Actuarial V
e prior year. rs.
Value
exico
ility.
Value
exico
ility.
Value
SECTIO
P:\Admin\New M
In additioSystems not PERAboth systnormal cover a 30of each p In Buck’sshould bethat althosufficientsufficientunfundedfuture, as Another tbenefit pthe retirewould thelead to sebudgetab In order tassets, Bcompletegroup proestimatedpayment assumedentrants Either apsolvencymay inste Our projerate of rethe actuaprior lossterm untiequalize.basis foll
ON VII. SO
Mexico LCS\NMLCS01
on to the actSolvency T
A and ERB wtems indicatost (cost of a0 year periodplan.
s opinion, thee addressedough the 30 t to amortizet assets are d liability is nssets can be
test for insolayments, an
ement systemen be respoerious financble retiremen
to determineBuck requested for both Pojections. Fd the closedprojections
d to be fundewho are like
pproach can y period becaead be used
ections are beturn of 8.00arial value ofses are realizl all prior los. The resultsow.
LVENCY
13111_AuditReport_F
uarial reviewask Force (Rwhere “solveed that statuaccruing bend in accorda
e inability of d, but that doyear amortiz
e the unfundestill expecte
not expectede expected to
lvency is whnd if not, whems would nonsible for mecial hardshipnt contributio
e if PERA or ted and rece
PERA and ERFor PERA, wd group popu
for only curred separatelely to replace
be used to tause assets d to pay bene
based on a p% per year. f assets, cauzed. This ex
sses are reas of our proj
inal.docx
w of New MeRSSTF) askent”. The reutory contribnefits for act
ance with the
f a retiremenoes not meazation required liability ov
ed to be avaid to be amoro be fully de
hether or not en assets ar
o longer be aeeting benefps for emploons.
ERB could eived informRB. We rec
we received oulation. A clorent active ay. An open e retiring andtest for insolare accumu
efits of curre
projection of This assum
using a lowexplains the rlized, at whiections of fu
40
exico PERA ked Buck to aesults of the Jbutions wouldtive membere funding po
nt system to n the retiremrement is nover a longerlable to mee
rtized over aepleted if all
assets are ere expected able to meet fit payments
oyers if bene
be expectedation from G
ceived informopen group posed group
and retired mgroup proje
d terminatinglvency. An oulated to payent members
f the market mption has ther than expecreduction in ch time mar
und assets m
and New Meassist with aJune 30, 20d no longer rs) and amolicy adopted
meet its funment systemot met, futurer, finite perioet all future bany period, thassumptions
expected to to be complthe benefit
s on a pay-asefit payments
d to reach inGRS from promation on ERprojection inprojection in
members. Beection includeg members open group y for the bens if needed t
value of asshe effect of rcted return othe actuaria
rket and actumeasured on
exico ERB, a determinat09 actuarialbe sufficientrtize the unf
d by the Reti
ding policy im is insolvente contributio
od of time. Ifbenefit oblighen at somes are fully re
be sufficienletely depletobligations, s-you-go bas significantl
nsolvency byojections thaRB for both cnformation onncludes liabienefits for nes an assumover the proapproach w
nefits of new to meet bene
sets earningrealizing defon the actua
al value of asuarial valuesn a market a
the Retiremion of wheth valuations ft to fund the funded liabilirement Boa
is a concernt. It is possins may still f this is the cations. If the
e point in theealized.
nt to meet futted. In this cand employ
asis. This couy exceed
y fully depletat were closed and only and lity and beneew entrants
med group ofojection perio
will extend theentrants, bu
efit payment
the assumeferred lossesarial value unssets in the ss are expecteand actuarial
ent her or for
ity rds
and ble be
case, e e
ture case, yers uld
ing
open
efit are
f new od. e ut ts.
ed s on ntil all short ed to
SECTIO
P:\Admin\New M
New Mex The folloGRS andpayment benefit pincludes Employeyears theand 14.7
ON VII. SO
Mexico LCS\NMLCS01
xico PERA
wing graph d a 4.5% pay
on new entayments or the actual rae contributio
ereafter. Em1% for all ye
LVENCY
13111_AuditReport_F
is based on yroll growth rant payroll fnormal cost ate of returnons were ass
mployer contears thereaft
inal.docx
estimated cassumptionfor memberscontribution of 15.02% fsumed to beributions weter.
41
closed group. The projecs hired after ns for new hifor FY 2010 e 10.99% forere assumed
p projectionsction includer June 30, 20ired membeand 8.00%
r FY 2010 and to be 13.97
s using data es the unfund010, but doers. The assfor all yearsnd 2011, and7% for FY 20
provided by ded liability
es not includset projections thereafter. d 10.25% fo010 and 201
e the n
or all 1,
SECTIO
P:\Admin\New M
The folloGRS andprojectiothereafte10.25% f2010 and
ON VII. SO
Mexico LCS\NMLCS01
wing graph d includes thn includes th
er. Employeefor all years d 2011, and
LVENCY
13111_AuditReport_F
is based on he new benehe actual rate contributiothereafter. 14.71% for
inal.docx
open group efit structure te of return oons were assEmployer coall years the
42
projections for member
of 15.02% fosumed to beontributions ereafter.
with no poprs hired afteror FY 2010 ae 10.99% forwere assum
pulation growr June 30, 20and 8.00% for FY 2010 an
med to be 13
wth provided010. The asor all years nd 2011, and3.97% for FY
d by sset
d Y
SECTIO
P:\Admin\New M
New Mex The follo3.75% panew entrpaymentprojectiothereafte7.90% foand 2011
ON VII. SO
Mexico LCS\NMLCS01
xico ERB
wing graph ayroll growthant payroll fos or normal n includes th
er. Employeeor all years th1, 13.15% fo
LVENCY
13111_AuditReport_F
is based on h assumptionor memberscost contribhe actual rate contributiohereafter. Eor FY 2012 a
inal.docx
closed groun. The proje
s hired after Jutions for mte of return oons were assEmployer conand 13.90%
43
up projectionction includeJune 30, 20embers hireof 18.60% fosumed to bentributions wfor all years
ns using dataes the unfun10, but does
ed after Juneor FY 2010 ae 9.40% for Fwere assumes thereafter.
a supplied bynded liability s not includee 30, 2010. Tand 8.00% foFY 2010 anded to be 10.9
y GRS and apayment on
e the benefit The asset or all years d 2011, and 90% for FY 2
a n
2010
SECTIO
P:\Admin\New M
The folloby GRS aasset prothereafte7.90% foand 2011
We belieaccumula
ON VII. SO
Mexico LCS\NMLCS01
wing graph and includesojection incluer. Employeeor all years th1, 13.15% fo
eve that the 1ation would
LVENCY
13111_AuditReport_F
is based on s the new beudes the acte contributiohereafter. Eor FY2012 an
1.5% per yeabe less if low
inal.docx
open group enefit structuual rate of re
ons were assEmployer connd 13.90% f
ar populatiower populati
44
projections ure for membeturn of 18.6sumed to bentributions wfor all years
n growth asson growth is
with 1.50%bers hired a60% for FY 2e 9.40% for Fwere assume
thereafter.
sumption is s experience
population gfter June 302010 and 8.0FY 2010 anded to be 10.9
very aggresed.
growth provi0, 2010. The00% for all yd 2011, and 90% for FY 2
ssive. Asset
ided e years
2010
t
SECTIO
P:\Admin\New M
As indeprecommeactuariesCouncil Sactuarial and procfairly disc From ourGRS fairWe havevaluationthe inform The solvebenefit lereach insthe long insolvencgroup ap2039, anthrougho1.5% perassumptcontributERB withcomparis
ON VII. CO
Mexico LCS\NMLCS01
pendent revieendations fos. The purpoService that assumption
cedures, the closes the ac
r review of thly represent
e made suggn process anmation nece
ency review evels and allsolvency at sterm, and ascy is reached
pproach. Fod is not inso
out the projecr year. As wion is unrealions that res
h an open grson purpose
NCLUSION
13111_AuditReport_F
ewing actuarr the improvose of this rethe valuatio
ns and methosample memctuarial posi
he plan, we s the actuar
gestions thrond reports of ssary to ren
indicates th assumptionsome point issumes an id in 2033 unr ERB, the p
olvent under ction period.
we discussedlistic, and thsult in a solvroup projectis.
N
inal.docx
ry, Buck hasvement of theeview is to pns were conods were comber calculaition of New
believe the arial position aoughout this f the actuarieder an opini
hat if there arns are exactln the future.nvestment rnder the clospoint of insol
the open gr. This is a red in Section Vis leads to a
vent open groion using a n
45
s been askede actuarial v
provide assunducted usinnsistent with
ations are acMexico PER
actuarial valand funding report that w
es. For Newon on the ac
re no changly realized, b. This is depeturn of 8.00sed group apvency unde
roup approacesult of an aVI, we believ
an optimistic oup projectiono growth (i.
d to provide valuations perance to the
ng complete h generally accurate, andRA and ERB
luation of Nerequiremen
we believe ww Mexico PEccuracy of G
es to statutoboth PERA apendent on m0% per yearpproach, andr a closed gch, with ass
active membve a 1.5% mprojection o
on. We reco.e. stable po
an opinion aerformed by e New Mexic
and valid inaccepted acd the actuariaB retirement
ew Mexico Ets of the reti
will enhance ERA, we werGRS’s 2009
ory contributand ERB cameeting the r. For PERAd in 2058 unroup approaets expectedership grow
membership of future salaommend tha
opulation) as
and the retained
co Legislativeformation, th
ctuarial standal report fullyfunds.
ERB prepareirement systthe actuaria
re unable to valuation re
tion rates or n be expecteassumption
A, the point onder the opeach is reached to grow
wth assumptiogrowth
aries and at GRS provssumption fo
d e he dards y and
ed by tem. al get sults.
ed to ns in of en ed in
on of
ide or
APPEND
P:\Admin\New M
1. Actua2. 75% o3. 50% o4. 25% o5. Total 6. AVA a7. GRS 8. Differ
1. Actua2. 75% o3. 50% o4. 25% o5. Total 6. AVA a7. GRS 8. Differ
1. Actua2. 75% o3. 50% o4. 25% o5. Total 6. AVA a7. GRS 8. Differ
DIX
Mexico LCS\NMLCS01
De
al MVA at EOYof prior year (of second prioof third prior yunrecognizedat EOY (1 + 5AVA at EOY
rence (7 - 6)
al MVA at EOYof prior year (of second prioof third prior yunrecognizedat EOY (1 + 5AVA at EOY
rence (7 - 6)
al MVA at EOYof prior year (of second prioof third prior yunrecognizedat EOY (1 + 5AVA at EOY
rence (7 - 6)
13111_AuditReport_F
evelopment o
Y (gain)/loss or year (gain)year (gain)/losd (gain)/loss (5)
Y (gain)/loss or year (gain)year (gain)/losd (gain)/loss (5) (before corrid
Y (gain)/loss or year (gain)year (gain)/losd (gain)/loss (5) (before corrid
inal.docx
of Actuarial VUsing Al
PE
)/loss ss (2 + 3 + 4)
M
)/loss ss (2 + 3 + 4)
dor)
)/loss ss (2 + 3 + 4)
dor)
46
Value of Assternative Me
ERA Fund
Magistrate
Judicial
sets as of Junethod
ne 30, 2009
$ 8, 3, 1, ( $ 3, 12, 12,
$ $
$ $
Exhi
795,819,080040,473,176018,853,020
(280,003,152)779,323,044575,142,124575,142,126
2
26,270,170
8,989,7603,071,369(882,631)
11,178,49837,448,66837,448,668
0
60,967,62719,889,855
6,789,840(1,902,685)24,777,01085,744,63785,744,639
2
ibit 1
)
)
)
APPEND
P:\Admin\New M
1. Actua2. 75% o3. 50% o4. 25% o5. Total 6. AVA a7. GRS 8. Differ
1. AVA
2. MVA
3. Cont
4. Bene
5. Expe
6. Expe
7. Expe
8. Actu
9. Gain
10. 20%
11. 20%
12. 20%
13. 20%
14. 20%
15. Tota
16. AVA
17. GRS
18. Diffe
DIX
Mexico LCS\NMLCS01
De
al MVA at EOYof prior year (of second prioof third prior yunrecognizedat EOY (1 + 5AVA at EOY
rence (7 - 6)
A at BOY
A at BOY
tributions
efit Payments
ected return a
ected MVA at
ected AVA at
al MVA at EO
n / (Loss) on M
recognition f
of 2008 gain
of 2007 gain
of 2006 gain
of 2005 gain
l Recognized
A at EOY (7 +
S AVA at EOY
erence (17 – 1
13111_AuditReport_F
evelopment o
Y (gain)/loss or year (gain)year (gain)/losd (gain)/loss (5)
s
at 8%
t EOY (2 + 3 +
EOY (1 + 3 +
OY
MVA (8 – 6)
for current yea
n / (loss)
n / (loss)
n / (loss)
n / (loss)
(10 + 11 + 1
15)
Y
16)
inal.docx
of Actuarial VUsing Al
Volunte
)/loss ss (2 + 3 + 4)
+ 4 + 5)
+ 4 + 5)
ar (20% x 9)
2 + 13 + 14)
47
Value of Assternative Me
eer Firefighte
ERB
sets as of Junethod
ers
ne 30, 2009
$ $
$ 9,
8,
(
$ 9,
9,
7,
$ (2,
(
(
$ (
9,
9,
Exhi(contin
34,036,30011,412,239
3,787,235(1,043,513)14,155,96148,192,26148,192,255
(6)
272,828,135
770,044,039
538,793,240
(647,391,550)
697,259,591
358,705,320
861,489,416
113,651,700
245,053,620)
(449,010,724)
(265,137,838)
140,369,391
58,098,017
20,463,050
495,218,104)
366,271,312
366,271,312
0
ibit 1 nued)
)
)
)
)
)
)
)
A
P
APPENDIX
P:\Admin\New Mexico LCS\N
Year EndingJune 30th
2009 (3$ 2010 (2 2011 (1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
NMLCS013111_AuditReport_
Existing MarkeBases Valu
3,779,323,046) 8,795,8$ 2,763,168,013) 9,338,0 1,330,454,064) 9,897,2 (265,940,427) 10,469,84 (124,437,950) 11,053,4 (44,712,977) 11,642,9 (12,979,107) 12,235,4 (5,056,027) 12,828,0 (1,716,788) 13,419,7 (564,833) 14,009,34 (203,684) 14,594,2 (69,151) 15,170,9 (23,595) 15,737,8 (8,258) 16,294,6 (2,825) 16,839,84 (974) 17,370,6 (339) 17,885,3 (118) 18,382,8 (42) 18,862,4 (16) 19,321,3 ‐ 19,755,64
Current
_Final.docx
New
et Actuarial ue Value
19,080 12,575,142,12$ 76,771 12,101,244,78 28,367 11,227,682,43 47,175 10,735,787,60 21,729 11,177,859,67 87,619 11,687,700,59 14,906 12,248,394,01 75,819 12,833,131,84 25,936 13,421,442,72 49,935 14,009,914,76 21,572 14,594,425,25 75,241 15,171,044,39 25,053 15,737,848,64 32,271 16,294,640,52 41,591 16,839,844,41 94,620 17,370,695,59 28,818 17,885,329,15 84,918 18,382,885,03 24,390 18,862,424,43 88,855 19,321,388,87 40,467 19,755,640,46
t Asset Valuation Method
4
w Mexico PERA
Difference
26 (3,779,323,046)$ 83 (2,763,168,012) 31 (1,330,454,064) 02 (265,940,427) 79 (124,437,950) 96 (44,712,977) 14 (12,979,108) 46 (5,056,027) 24 (1,716,788) 68 (564,833) 56 (203,684) 92 (69,151) 48 (23,595) 29 (8,258) 16 (2,825) 94 (974) 57 (339) 36 (118) 32 (42) 71 (16) 67 ‐
48
A (including Jud
ExistingBases
(3,775,200,559)$ 8$ (2,521,838,967) 9 (995,496,643) 9
‐ 10 ‐ 11 ‐ 11 ‐ 12 ‐ 12 ‐ 13 ‐ 14 ‐ 14 ‐ 15 ‐ 15 ‐ 16 ‐ 16 ‐ 17 ‐ 17 ‐ 18 ‐ 18 ‐ 19 ‐ 19
Asset Valuation Met
dicial)
Market ActuValue Va
8,795,819,080 12,57$ 9,338,076,771 11,85 9,897,228,367 10,89 0,469,847,175 10,46 1,053,421,729 11,05 1,642,987,619 11,64 2,235,414,906 12,23 2,828,075,819 12,82 3,419,725,936 13,41 4,009,349,935 14,00 4,594,221,572 14,59 5,170,975,241 15,17 5,737,825,053 15,73 6,294,632,271 16,29 6,839,841,591 16,83 7,370,694,620 17,37 7,885,328,818 17,88 8,382,884,918 18,38 8,862,424,390 18,86 9,321,388,855 19,32 9,755,640,467 19,75
hod Recognizing Expecteuarial alue Difference
71,019,639 (3,775,200$ 59,915,736 (2,521,838 92,725,010 (995,496 69,847,175 53,421,729 42,987,619 35,414,906 28,075,819 19,725,936 09,349,935 94,221,572 70,975,241 37,825,053 94,632,271 39,841,591 70,694,620 85,328,818 82,884,918 62,424,390 21,388,855 55,640,467
d Return on Existing Base
Exhibit
Difference inActuarial
e Value
0,559) (4,122,48$ 8,965) (241,329,04 6,643) (334,957,42 ‐ (265,940,42 ‐ (124,437,950 ‐ (44,712,97 ‐ (12,979,108 ‐ (5,056,02 ‐ (1,716,788 ‐ (564,83 ‐ (203,684 ‐ (69,15 ‐ (23,59 ‐ (8,258 ‐ (2,82 ‐ (974 ‐ (339 ‐ (118 ‐ (4 ‐ (1 ‐ ‐
es*
2
7)7)1)7)0)7)8)7)8)3)4)1)5)8)5)4)9)8)2)6)