Georgia Firefighters' Pension Fund, report on review of the financial statements for the fiscal year ended June 30, 2001

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GEORGL.\ FiREFIGHTERS' PENSION FL:-.1D - T..\BLE OF CONTENTS -

TNDEPEJ\'DENT ACCOUNTANT'S COMBINED REPORT 0:\ REVIEW OF Fll\ANCLA.L STATEMENTS A~TI SUPPLEME~TARY INFOR..i\.1ATl01'

EXHIBITS

FINANCIAL STATEMEKTS

A STATEMEJ\1T OF PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

FIDUCIARY FUND TYPE - PENSION TRUST FUND

2

B STATEMENT OF CHANGES IN PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

PENSION TRUST FUND

3

C NOTES TO THE FINANCIAL STATEMEJ\1TS

4

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT

18

~2 SCHEDULE OF FUNDING PROGRESS

19

3 SCHEDULE OF EMPLOYER CONTRIBUTIONS

20

RL,;~u 1 \\'. H1,ro!I.
S,A:E AUDITOR 1:"' 656 210

0EPART1\'1ENT OF AUDITS AND ACCOUNTS
254 W..i~hmgton S1rcc1. S W. Sunc 214 Atlanl:i. Georgia 30334-8400
August 17, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Board of Trustees of the Georgia Firefighters' Pension Fund
and Honorable John C. Kilpatrick, Jr., Secretary-Treasurer Georgia Firefighters' Pension Fund
ThH)EPE:!\TIEKT ACCOlJNTANT'S COMBI!\TED REPORT ON REVIEW OF FINA1\CIAL STATEMENTS A1'.1D SUPPLEMENT.-'\R.Y INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through C) of the Georgia Firefighters' Pension Fund as ofand for the year ended June 30,2001, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of the Georgia Firefighters' Pension Fund.
A review consists principally of inquiries of retirement fund personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance wlth auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
As described in Note 2, these financial statements were prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis ofaccounting described in Note 2.

OIARL-4C

Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 2. The accompanying supplementary information (Schedules 1 through 3) is presented for additional analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the financial statements, and we are not aware of any matenal modifications that should be made thereto.
Respectfully submitted,

l,J~

RWH:gp 01ARL-4C

State Auditor

FINANCL,<\L STATEMENTS - 1-

- - - - - - - -- -- ---- ---- -- - - - -- -------- ------- ---- - - - - - - - - -

GEORGIA FIREFIGHTERS' PENSION FUND STATEMENT OF PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS
FIDUCIARY FUND TYPE - PENSION TRUST FUND JUNE 30, 2001

EXHIBIT "A"

ASSETS
Investments U S Government Secunt1es, at Cost (Market Value $93,858,892 94) Stocks, at Cost (Market Value $251,861,628 74) Bonds, at Cost (Market Value $65,310,046.85) Notes, at Cost (Market Value $4,528,125.00) Investment Accounts, at Cost (Market Value $37,504,454.22)
TOTAL ASSETS
LIABILITIES
Cash Overdraft
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS (A ~chedule of funding progress Is presented on page 19)

$

91,531,508 41

217,678.691 02

64,406.229 35

4,370,761 72

37,504.454 22

s 415,491,644.72

17.81
s 415,491,626 91

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information
The notes to the financial statements are an integral part of this statement. -2-

GEORGIA FIR!:FIGHTERS' PENSION FUND STATEMENT OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS
PENSION TRUST FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "8"

ADDITIONS Member Contnbullons

s 1,815,961 55

Insurance Premiums Tax

13,493,092 81

Investment Income Interest Received D1v1dends Received Other Investment Income Gain or (Loss) on Sale of Investments (Net)

s 10,557,128.20
4,424.403 00 -932,742.54 -8.943.916.99

5,104,871 67

Other Sources Comm1ss1on Recapture on Stock Transaction Fees Penalty on Member Withdrawal Proceeds from Securities Lit1gat1on

s

259,703.77

8,423.25

4,014.98

272.142 00 S 20.686,068.03

DEDUCTIONS

Benefits Death Benefits D1sab1hty Benefits Retirement Benefits Surv1vorsh1p Benefits

s

15,000.00

387,759.50

6,610,350.13

8,296,578.91 S 15,309,688 54

Adm1mstrat1ve Expenses Personal Services Operating Expenses

$

285,504.45

1,562,975.43

1,848,479.88

Refunds to Terminated Members NET INCREASE

180,901 50
s

17 ,339.069.92 3,346,998 11

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JULY 1, 2000

412.144,628.80

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JUNE 30, 2001

s 415,491,626 91

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary lnformallon.
The notes to the finane1al statements are an integral part of this statement -3-

GEORGLA. FIREFIGHTERS' PENSION FUND KOTES TO THE FINANCL\L STATEMEKTS
Jl.P.-Jr: 30, 2001

EXHIBIT "C"

~OTE 1: PLAK DESCRIPTION

ORGANIZATIO~ AND PURPOSE The Georgia Firefighters' Pension Fund is a cost-sharing multiple-employer defined benefit pension plan established in 1955 by the General Assembly of Georgia for the purpose ofpaymg retirement benefits to firefighters of the State of Georgia. The Board of Trustees of the Pension Fund is comprised of five (5) members and consists of the Governor or his designee, the Commissioner of Insurance or his designee, two active members ofthe Pension Fund appointed by the Governor and one retired beneficiary of the Pension Fund appointed by the Governor. The Georgia Fuefighters' Pension Fund is considered a component unit ofthe State of Georgia and is mcluded within the State of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the State of Georgia. These reporting entity relationships are defined m Section 2100 of the Governmental Accountmg Standards Board Codification of Governmental Accountm2: and Financial Reportin2: Standards.

Any person employed as a firefighter or enrolled as a volunteer firefighter within the State of Georgia and any regular employee of the Pension Fund is eligible for membership. The Pension Fund is funded through a combination ofmember contributions paid by the affected firefighters and a tax imposed on gross insurance premiums v.Titten by insurance companies, corporations or associations for fire, inland marine and allied lines, lightning extended coverage, and windstorm policies covering property within the State of Georgia.

CURRENT MEMBERSHIP The following analysis compares the membership of the Georgia Firefighters' Pension Fund at June 30, 2001, to that of the prior year:

June 30, 2001 ' June 30, 2000

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Members Entitled to but not yet Receiving Benefits For Disability For Retirement For Survivorship

59 1,952 _ill_

66 1,865 _ill

2,lli

~

Number of Active Members

2212

~

PLAN BENEFITS The Georgia Firefighters' Pension Fund provides retirement as well as death and disability benefits. Benefit provisions and vesting requirements are established by statute and may be amended only by the General Assembly of Georgia. A description of plan benefits and vesting requirements is as follows:

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GEORGIA FIREFIGHTERS' PENSION Fl.T:\1D NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 200 l

EXHIBIT "C"

:KOTE I: PLAN DESCRIPTION
PLA.1" BENEFITS (A) RETIREMENT CO1\1DITIONS: Normal retirement is at age fifty-five (55) provided the
member has twenty-five years of service. Early reurement is permitted after fifteen years of service at age fifty.
(B) RETIREMENT BENEFITS: Normal retirement is S743.00 per month plus one percent (I%) for each full year of credited service in excess of twenty-five years. If credited service is less than twenty-five years, the monthly amount of $743.00 is reduced by the ratio of completed years to the full twenty-five years ofservice retirement. Retirement benefits are reduced by six percent (6%) for each year that the member is under the age of fifty-five.
(C) OPTIONAL BENEFITS: The monthly benefits referred to above are payable for the lifetime of the member. Members may elect to receive an actuarially reduced benefit in the form of a Ten Years Certain and Life Annuity or a Joint and Survivor Annuity.
(D) DISABILITY BENEFITS: Subject to the approval ofthe Board of Trustees, any firefighter or volunteer firefighter who becomes totally and permanently disabled as a result ofbodily injury while actively engaged in the performance ofofficial duties is entitled to a monthly retirement benefit of S508.00 after such disability has continued for at least six months. Any firefighter who has served at least five consecutive years or any volunteer firefighter who has served at least ten consecutive years prior to his/her disablement and who has fifteen years ofservice as a firefighter or volunteer firefighter will be entitled to a monthly benefit of $508.00 if he/she becomes totally and permanently disabled as a result of heart disease or respiratory disease, provided his/her disability status is approved by the Board of Trustees.
Effective July 1, 1993, active members of the Pension Fund on or after July 1, 1993, shall not be entitled to disability benefits. However, any member receiving disability benefits before July 1, 1993, shall continue to be eligible to receive such benefits.
(E) DEATH BENEFITS:
(1) Death before Retirement: In the event ofthe death of a member, prior to the attainment of fifteen years of service or retirement, the member's contributions will be returned to the beneficiary of the member.
(2) Death after Retirement: In the event of the death of a member after retirement, the excess, if any, of the member's contributions over the sum of benefits paid will be returned to the beneficiary of the member. If an optional form of payment has been elected, benefits will be paid in accordance with the terms of the selected option.
(F) TERMINATION: In the .event of the termination of a member prior to the completion of fifteen years of service as a firefighter, 95% of the member's contributions will be returned.
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GEORGL\ FIREFIGHTERS' PENSION FUND NOTES TO THE FNANCLA.L STATEMENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE I: PLAN DESCRIPTION
FU:\'DING REQUIREME~TS Contribution provisions are established by statute and may be amended only by the General Assembly of Georgia. A description of contribution requirements is as follows:
(A) MEMBER'S CO:\'TRIBUTIONS: Each member must contribute $15.00 per month, to be paid no later than the tenth day of each month.
(B) INSURANCE PREMIUMS TAX: Each insurance company, corporation, or association doing business within the State of Georgia must pay to the Secretary-Treasurer of the Georgia Firefighters' Pension Fund one percent (1 %) of the gross premiums written by such insurance company, corporation, or association for fire, inland marine and allied lines, lightning extended coverage, and windstorm insurance policies covering property within the State of Georgia.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Al\1D PLAN ASSET MATTERS
FUND COMPRISING FINANCIAL STATEMENTS The Georgia Firefighters' Pension Fund uses a fund to report on its financial position and the results of its operations determined in conformity with the accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. The fund represented in the accompanying financial statements is as follows:
FIDUCIARY FUND TYPE
PENSION TRUST FUND - The fund used to account for the accumulation of resources for retirement benefits to eligible members.
BASIS OF ACCOUNTING The Georgia Firefighters' Pension Fund prepares its financial statements on the basis ofcash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. This basis of accounting is defined as that method of accounting in which certain revenues and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.

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GEORGIA FIREFIGHTERS' PENSION FUND NOTES TO THE FINANCIAL STATEMENTS
Jl.;~E 30, 2001

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
BASIS OF ACCOUNTING Generally accepted accounting principles applicable to retirement funds require that investments be valued at fair value as ~f the plan year-end for the Statement ofPlan Net Assets. While market value has been disclosed, it is not presented withm the financial statements at June 30, 2001, as it is the policy of the Georgia Firefighters' Pension Fund to prepare its financial statements on a basis of accounting other than accounting principles generally accepted in the United States of America as noted above.
Generally accepted accounting principles also require that plan liabilities for benefits and refunds due to plan members and beneficiaries should be recognized when due and payable in accordance with the terms of the plan, and all other plan liabilities should be recognized on the accrual basis of accounting. Plan liabilities are not recorded in the financial statements at June 30, 2001, as it is the policy of the Georgia Firefighters' Pension Fund to prepare its financial statements on a basis of accounting other than accounting principles generally accepted in the United States of America as noted above.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with banks.
INVESTMENTS The Official Code of Georgia Annotated (O.C.G.A.) Section 47-7-23 states that the Board of Trustees of the Georgia Firefighters' Pension Fund of Georgia shall have full power to invest and reinvest funds, subject to all terms, conditions, limitations, and restrictions imposed by the "Public Retirement Systems Investment Authority Law" of Georgia. In addition, the Board of Trustees is restricted to invest no more than 60% of the assets of the Pension Fund in equities and may not invest more than 10% of the assets in corporations or in obligations of corporations organized in a country other than the United States ofAmerica or Canada. Statutory provisions governing eligible investments are enumerated in the O.C.G.A. Section 47-20-83 as follows:
(1) Corporations or obligations of corporations organized under the laws of Georgia or any other state or under the laws of Canada, but only if the corporation has a market capitalization equivalent to $100 million; provided, however, that except as provided in O.C.G.A. Section 47-20-84, no fund shall invest in corporations or in obligations of corporations organized in a country other than the United States or Canada; provided, further, that such obligation shall be listed as investment grade by a nationally recognized rating agency;
(2) Repurchase and reverse repurchase agreements for direct obligations ofthe United States government and for obligations unconditionally guaranteed by agencies of the United States government and for investments eligible under paragraph (1) of this Code section;
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GEORGIA FIREFIGHTERS' PENSION FUND NOTES TO THE FINANCLA.L STATEMENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE 2: Sl.Jl\.1MARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (3) Cash assets or deposits in checking or savings accounts under certificates of deposit or in other form in banks and trust companies and in savings accounts, certificates ofdeposit, or similar certificates or evidences of deposits in savings and loan associations and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation;
(4) Bonds, notes, warrants, and other evidence of indebtedness which are direct obligations of the government of the United States of America or for which the full faith and credit of the government of the United States of America is pledged for the payment of principal and interest;
(5) Loans guaranteed as to principal and interest by the government of the United States of America, or by any agency or instrumentality of the government of the United States of America, to the extent of such guaranty;
(6) Taxable bonds, notes, warrants, and other securities not in default which are the direct obligations of any state of the United States or of the District of Columbia, or of the government of Canada or any province ofCanada, or for which the full faith and credit of such state, district, government, or province has been pledged for the payment ofprincipal and interest;
(7) Bonds, notes, warrants, and other securities not in default which are the direct obligations of the government of any foreign country which the International Monetary Fund lists as an industrialized country and for which the full faith and credit of such government has been pledged for the payment ofprincipal and interest, provided such securities are listed as investment grade by a nationally recognized rating agency;
(8) Bonds, debentures, or other securities issued or insured or guaranteed by any agency, authority, unit, or corporate body created by the government of the United States of America whether or not such obligations are guaranteed by the United States;
(9) Collateralized mortgage obligations that are listed as investment grade by a nationally recognized rating agency;
(10) Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development or the International Financial Corporation;

-8-

GEORGIA FIREFIGHTERS' PENSIO~ FU1'l) NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A:t\11) PLAK ASSET MATTERS
INVESTMENTS (11) In addition to those investments eligible under paragraph (1) ofthis Code section, bonds, debentures, notes, and other evidences of indebtedness issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, which are not in default as to principal or interest and which are secured by collateral worth at least 50 percent more than the par value of the entire issue of such obligations, but only if not more than one-third of the total value of the required co11ateral consists of common stocks;
(12) In addition to those investments eligible under paragraph (1) ofthis Code section, secured and unsecured obligations ofissuers described in paragraph (11) ofthis Code section other than the obligations described in paragraph (11) ofthis Code section, bearing interest at a fixed rate, with mandatory principal and interest due at specified times, if the net earnings of the issuing, assuming, or guaranteeing institution available for its fixed charges for a period of five fiscal years next preceding date of acquisition by the fund have averaged per year not less than one and one-half times its average annual fixed charges applicable to such period and if during either of the last two years of the period of such net earnings have been not less than one and one-half times its fixed charges for the year; provided, however, that any such obligation shall be listed as investment grade by a nationa11y recognized rating agency;
(13) In addition to those investments eligible under paragraph (1) of this Code section, equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, who11y or in part within the United States of America, and the right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the transportation equipment;
(14) Loans that are secured by pledge or securities eligible for investment under this article;
(15) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired;
(16) In addition to those investments eligible under paragraph (1) of this Code section, a mortgage or a mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar security which represents an undivided, beneficial interest in a pool ofloans secured by first mortgages, deeds of trust, or deeds to secure debt upon fee simple, unencumbered, improved, or income-producing real property located in the United States or Canada, which is improved with a residential building or condominium unit or buildings designed for occupancy by not more than four families, including leasehold estates in such real estate if such first mortgages, deeds oftrust, or deeds to secure debt are fu11y guaranteed or insured by the Federal Housing Administration, the United States
-9-

GEORGL.A. FIREFIGHTERS' PENSIOK Fl.n\TD NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTIKG POLICIES AND PLAN ASSET MATTERS
I~VESTMENTS ( 16) Department of Veterans Affairs, the Farmers Home Administration, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Federal National Mortgage Association, or any similar governmental entity or mstrumentality;
(17) Land and buildings on such land used or acquired for use as a fund's office for the convenient transaction of its own business; provided, however, that portions of such buildings not used for its own business may be rented by the fund to others; provided, further, that the amount investment by a fund in office property shall not exceed 10 percent of the retirement system assets;
(18) Real property acquired in satisfaction in whole or in part of loans, mortgages, liens, judgments, decrees, or debts previously owing to the fund in the course of its business;
(19) Real property acquired in part payment of the consideration on the sale of other real property owned by the fund if such transaction effects a net reduction in the fund's investment in real estate;
(20) Real property acquired by gift or devise, or through merger or consolidation with another fund; and
(21) Additional real property and equipment incident to real property if necessary or convenient for the enhancement of the marketability or sale value of real property previously acquired or held by the fund under paragraphs (18), (19), and (20) ofthis Code section.
Investments are defined as those financial instruments with terms in excess ofthree months from the date ofpurchase and certain other securities held for the production ofrevenue. In addition, funds on deposit with the Pension Fund's investment custodian for purposes of continual investment are reflected as investments regardless ofthe term ofthe instruments. Investments in U. S. government securities, stocks, bonds, notes, and investment accounts are recorded at cost. Accrued interest purchased, premiums or discounts on bonds and U. S. government securities are reflected as a part of cost and are not amortized over the remaining life ofthe security. The market values reflected on the Statement of Plan Net Assets were based on valuations appearing in the Pension Fund's Investment Custodian Trust Report at June 30, 2001.
Interest income and dividend income are recognized when received in cash. Gains and/or losses are recognized using the completed transaction method. Accrued interest purchased is recorded as a reduction of interest income at the time of purchase.

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GEORGLA. FIREFIGHTERS' PENSIOK FUND NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOl.Jl\1ING POLICIES AI\Tl) PLAN ASSET MATTERS

INVESTMENTS Approximately 22% of the net assets available for benefits are invested in U. S. government securities.

FIXED ASSETS Fixed assets are recorded as expenditures at the time ofpurchase. No depreciation has been provided on fixed assets.

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS Al\Tl) INVESTMENTS

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as ofJune 30, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Pension Fund or by its agent in the Pension Fund's name.

Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Pension Fund's name.

Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution or by its trust department or agent, but not in the Pension Fund's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balances

s=~::4-2s..,1 s 41 16330 s

Risk Categones

2

3

41 163 30 s

o oo s===.!o!.,,!o~o

CATEGORIZATION OF INVESTMENTS For purposes of analysis ofcustodial credit risk, investments consist ofU. S. government securities, stocks, bonds, notes, and investment accounts. Investments are stated at cost, and are summarized and classified as to custodial credit risk within the categories described below:

Category 1 - Insured or registered, or securities held by the Pension Fund or its agent in the Pension Fund's name.

Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the Pension Fund's name.

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- - - - - - - - - - - - - - - - - - ----- --
GEORGL.<\ FIREFIGHTERS' PENSION FUNTI NOTES TO THE FNANCLA.L STATEME~TS
JUKE 30, 2001

EXHIBIT "C"

NOTE 3: CUSTODLA.L CREDIT RISKS OF CASH DEPOSITS A."' Il\T\'ESTME~TS

CATEGORIZATION OF INVESTMENTS Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Pension Fund's name.

The carrying amounts of investment balances as of June 30. 2001, are categorized below.

T:i,~e of Investment
L: s Government Secunues
Stocks Bonds Notes Investment Accounts
Total Investments

Risk Categories 2

s $ 91,531.508 41
217,678.691 02 64,406,229 35 4,370,761 i2
37 ,504,4~4 22

000 s

541 "421 C>44 72 s

QQQ s

Carrying

3

A.mount

000 S 91.531.508 41 217,678.691 02 64,406.229 35 4,370.761 72 37,504,454 22

Market Value
s 93,858.892 94
25 I ,861.628 74 65,310,046 85 4,528.125 00 ;}7.504,<!54 22

QQQ S:11 ~ :'121 fl,!,! 72 S 4~3 Q63 lF 7~

KOTE 4: OPERATING LEASES

The Georgia Firefighters' Pension Fund has entered into certain agreements to lease equipment which are classified as operating leases (leases on assets not recorded on the Statement ofPlan Net Assts). These leases generally contain provisions that, at the expiration of the original term of the lease, the Pension Fund has the option ofrenewing the lease on a year-to-year basis. Future minimum lease pa}ments for operating leases as ofJune 30, 2001, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Endin!! June 30

2002 2003

S 3,441.12 2,007.32

Total Future Minimum Lease Payments

$ 5,448.44

Expenditures for rental of equipment under operating leases for the year ended June 30, 2001, totaled $3,441.12.

NOTE 5: CONTRIBUTIONS REQUIRED A.ND MADE

FUNDING POLICY The minimum annual employer contribution requirements are set forth in the Official Code of Georgia Annotated Section 47-20-10 and are not actuarially determined. This statute further prohibits any action to grant a benefit increase until such time as the minimum annual contribution requirements meet or exceed legislative requirements. The actuarial valuation as ofJuly 1, 1999,

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GEORGL.<\ FIREFIGHTERS' PEKSION FUJ\'D NOTES TO THE Fr.-.;A:\:CL.<\L STATE\1ENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE 5: CONTRIBlJTIONS REQUIRED A:'ID MADE

FUNDING POLICY which reflected the proceeds of the msurance premiums tax as the employer contribution, indicated that the minimum employer contribution level was met. Member contribution requirements are set forth m O.C.G.A. Section 47-7-60 and are not actuarially determined.

FUNDING REQUIREMENTS Actual contributions for the year ended June 30, 2001, were as follows:

Member Contributions Insurance Premiums Tax

S 1,815,961.55
13,493.092.81

S15.309.054.36

NOTE 6: CHA.NGES IN FIXED ASSETS

Fixed assets used in plan operations are not included in the accompanying financial statements as required by generally accepted accounting principles applicable to retirement funds. The following is a summary of changes in fixed assets during the fiscal year:

Land

Building Equipment

Total

Balance July 1, 2000

$44,000.00 $ 108,723.98 S 184,325.96 $ 337,049.94

Additions

2,120.93

2,120.93

Deletions

0.00

0.00

Balance June 30, 2001 S 4~.000.0Q $ 108,123,98 S 186,446,89 $ 339,17Q.87

NOTE 7: RISK MANAGEMENT

PUBLIC ENTITY RISK POOL The Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State ofGeorgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. The Department ofCommunity Health has contracted with Blue Cross Blue Shield ofGeorgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.

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GEORGIA FIREFIGHTERS' PENSION FUI\TI NOTES TO THE FIKANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "C"

NOTE 7: RISK MA.""JAGEMEl\1
OTHER RISK MA.l\'AGEMENT The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Georgia Firefighters' Pension Fund is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTES: SUBSEOUENTEVENTS
During fiscal year 2001, the Georgia Firefighters' Pension Fund received $489,937.74 in fire insurance premium tax revenues for Class 9 property coverage within the State of Georgia. All fire insurance premiums tax are received and invested by the Georgia Firefighters' Pension Fund. On July 31, 2001, these revenues were transferred to the Georgia Class Nine Fire Department Pension Fund.
NOTE 9: CONTINGENCIES
Litigation, claims and assessments filed against the Georgia Firefighters' Pension Fund, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2001.
At June 30, 2001, the Georgia Firefighters' Pension Fund had inactive members' dues on hand in the amount of$81,320.00. Ninety-five percent (95%) of such dues are refundable upon request of the inactive members.
NOTE 10: EMPLOYEES' RETIREMENT PLAN
The Georgia Firefighters' Pension Fund participates in a defined contribution money purchase pension plan, in which benefits depend solely on amounts contributed to the plan plus investment earnings. The Georgia Firefighters' Pension Fund Employees' Retirement Plan was established effective July 1, 1998, for the purpose of providing retirement allowances for employees of the Georgia Firefighters' Pension Fund. Van Kampen American Capital Trust Company is custodian and trustee of the plan. Participants shall be fully vested at all times in his or her individual account. This plan is intended to be a participant directed plan. The normal retirement age under the plan is age 59 1/2.
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GEORGIA FIREFIGHTERS' PENSION Fl.Jl\TJ) NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHIBIT "C"

NOTE 10: EMPLOYEES' RETIREME~1 PLAN
For each plan year, the Georgia Firefighters' Pension Fund will contribute for each qualifying participant an amount equal to 15% of the qualifying participant's compensation in the fiscal year. Upon termination or retirement, any vested benefit will be paid to the participant or their beneficiaries in a lump sum or as periodic payments from one ofthe deferred options available. The Pension Fund's total payroll in fiscal year 2001 amounted to $217,015.63, ofwhich $208,176.63 was for covered employees and used by the Pension Fund for calculating contributions. For fiscal year 2001, the Pension Fund contributed $29,131.18 to this retirement plan. Plan provisions and contribution requirements are established and may be amended by the Board of Trustees of the Georgia Firefighters' Pension Fund.

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SUPPLEMENTARY Th.Tf0Ri\.1ATION

- - - - - - - - - - - - - - - - - - - - - - - - - - - - --
GEORGIA FIREFIGHTERS' PENSION FUND SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
FI.CA. Retirement Health and Dental Insurance Unemployment Insurance Workers' Compensation
OPERATING EXPENSES
Regular Operating Expenses Motor Vehicle Expenses Publications, Printing and Media Supplies and Materials Repairs and Maintenance Utilities Insurance and Bonding Other Operating Expenses
Travel
Equipment Rental of Equipment
Computer Charges Equipment Purchases
Telecommunications
Per Diem, Fees and Contracts Per Diem and Fees

s
s 16,601.69
29,131.18 22,252.28
78.67 425 00

217,015.63 68,488 82 S

285,504.45

s 2,618.20
6,703.19 35,200.11 16,623.31
8,054.91 1,238.77
312.08 $

70,750.57 13,956.02

3,441.12

2,120.93 5,460.25

1,467,246.54

1,562,975.43

$ 1,848,479.88

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA FIREFIGHTERS' PENSION FUND SCHEDULE OF FUNDING PROGRESS YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

ACTUARIAL VALUATION
DATE

ACTUARIAL VALUE OF
ASSETS ja)

ACTUARIAL ACCRUED LIABILITY (AAL) - ENTRY AGE NORMAL
(bl

UNFUNDED AAL
(UAAL) (b-al

s s s 07/01/97

285,666,939 00

326,762,787 00

41.095.848.00

s s 07/01/99 $ 397,720.426 00

364,459,517.00

-33,260,909 00

FUNDED RATIO (aibl
874%
109 1%

COVERED PAYROLL
(Cl
nia
nia

UAAL ASA PERCENTAGE OF COVERED
PAYROLL !(b-a)'cl
n/a
nta

Information prior to July 1, 1997. 1s not available m accordance with the parameters of GASB Statement No 25.

The information presented m this required supplementary schedule 1s based on the actuanal study prepared as of July 1, 1999. The actuarial value of assets 1s equal to 88% of market value of assets (mclud1ng fixed assets)

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information
19

GEORGIA FIREFIGHTERS' PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

FISCAL YEAR
1998
1999

ANNUAL REQUIRED CONTRIBUTION

s

11,407,344.00

$

11,749,564.00

PERCENTAGE CONTRIBUTED
100.6%
102.4%

Information pnor to July 1. 1997, Is not available in accordance with the parameters of GASB Statement No. 25.

The information presented in this required supplementary schedule Is based on the actuarial study prepared as of July 1, 1999. Additional information of this latest actuarial valuation follows:

Valuation Date
Actuarial Cost Method
Amort1zat1on Method
Remaining Amortization Period
Asset Valuation Method
Actuarial Assumptions: Investment Rate of Return Proiected Salary Increases Includes Inflation at Cost-of-Living Adjustments

July 1, 1999 Entry age normal Not Applicable since fully funded
Fully funded as of valuation date 5-year smoothed market value
6% Not Applicable None None

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary lnfonnation.
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