Management report, Peace Officers' Annuity and Benefit Fund of Georgia, a component unit of the State of Georgia, fiscal year ended June 30, 2002

. '. -~.,.-r, ~-.

.{,

:,. ~

..(" ~

'.
I_,,

f: I;,
,1','.!,,. ...

' '

. .. . ,,

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA -TABLE OF CONTENTS-

LETTER OF TRANSMITTAL EXHIBITS

SELECTED FINANCIAL INFORMATION

A SCHEDULE OF PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

2

B SCHEDULE OF CHANGES IN PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

3

C SELECTED FINANCIAL NOTES

4

SUPPLEMENTARY INFORMATION

SCHEUDLES

1 SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT

14

2 RECONCILIATION OF SALARIES

15

3 RECONCILIATION OF PER DIEM AND FEES

16

4 SCHEDULE OF FUNDING PROGRESS

17

5 SCHEDULE OF EMPLOYER CONTRIBUTIONS

18

DEPARTMENT OF AUDITS AND ACCOUNTS

254 Washington Street, SW, Suite 214

w. RLS,,ELL

H1'flON

'ffATE Al."DITOR

(404)65C,..2174

Atlanta, Georgia 30334-8400

March 19, 2003
Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Comm1ss1oners of the Peace Officers' Annuity and Benefit Fund
and Honorable Robert W Carter, Secretary-Treasurer
Ladies and Gentlemen
As part of our audit of the basic financial statements of the State of Georgia presented in the State of Georgia Comprehens,ve Annual Financial Report and the issuance of a Statewide Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2002, we have pertonned certain audit procedures at the Peace Officers' Annurty and Benefit Fund of Georgia Accordingly, the financial statements and compliance actIvItIes of the Peace Officers' Annuity and Benefit Fund of Georgia were examined to the extent necessary In order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal controls as required by the Single Audit Act Amendments of 1996
This Management Report contains infonnatIon pertinent to the financial and compliance acl:1vItIes of the Peace Officers' Annuity and Benefrt Fund of Georgia as of and for the year ended June 30, 2002 The parllcular information provided Is enumerated in the Table of Contents
This report Is intended solely for the infonnat1on and use of management of the State of Georgia and members of the Board and Is not intended to be and should not be used by anyone other than these specified parties
Respectfully submitted,
~-~

RWH sdd

.
SELECTED FINANCIAL INFORMATION -1-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA

EXHIBIT "A"

SCHEDULE OF PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS

JUNE 30. 2002

Cash and Cash Equivalents
Investments U S Governmcnl Secunt1es, at Cost (Market Vah.Je 582,590,548 00) Sloci<s, al Cost (Marl<el Value 586,270,584 02) Bonds and Debentures, at Cost (Merkel Value $53,133,500 04)
Notes, at Cost (Market Value $7,765,160 81)
Investment Accounts, al Cost (Market Value $19,472,669 74) Georgia Pooled Index Fund, at Cost (Marlee! Value$ 41,463,036 96) Group Trust Pool, at cost (Market Value $17,885,762 69)
TOT AL ASSETS
LIABILITIES
None Reported
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS
(A schedule of funding progress 1s presented on page 17)

s

1,460,808 08

s

80 251,938 42

103,408,343 52

50,650,642 21

7,522,840 38

19,472,669 74

33,008,390 91

25 004 781 21

319,319,606 39

$ 320,780,414 47

000

$ 320,780.414 47

. 2.

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA

EXHIBIT "B"

SCHEDULE OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS

YEAR ENDED JUNE 30, 2002

ADDITIONS
Member Conlnbullon1
F11e1 end Bond Forfeitures
Investment Income Interest Recerved Drw:lends Received Ga11 or (Loll) on S8'& of lm,oestmenls (Net)
Olher Sources Co1TMTI1Ut0fl Reb!ltel Contract w11t1 Judges of the Probale Courtl Retirement Fund of Georgie For AdmlnlatratlVe Servtcet Contractl wtlh Stme Agendfn Georgia Department of Rvenue For Collecllon al Feea from Fin" end Bond F011eltures Georo1a Department of Treasury end Fl5CIIII SeMCes For Collection of Fem from Fines end Bond Forlelh.lres Miscelaneous Income
DEDUCIIONS
Beneflls Desai Beneftts otaablhty Beneflls Rellremenl Beneftll &JMYOnh~ Benefitl
Admlnl:atrattve Expense PenonaJ S.l"YICH Operallng E.Jq:,enses
Refmds to Terminated Members
NET INCREASE
NE! ASSETS HELD IN TRUST FOR PENSION BENEFITS - JULY 1 2001

$

s 9 60317B 00
1 686 OBJ 43
Q,593 322 62)

s

4-4 767 60

13 267 50

34 650 00
31 50000 5606503

s

190 124 01

1795349,U

9 203 740 99

1 519,811 86 S

s

322 449 08

135694172

1 651 387 72 1415996867
3 695936 81

18027013 S 19687 564 33

12 708 026 30

1 679.390 80

135 738 09
s

14 52415519 5183 4091.C

31!5 617 00!5 33

NET ASSETS HELP IN TRUST FOR PENSION BENEFITS JUNE 30 2002

s 320 780 ,41,4 ,47

-3-

PEACE OFFICERS' ANNUITY AND BENEFl1 FUND OF GEORGIA EXIIIBIT "C" SELECTED FINANCIAL NOTES JUNE 30, 2002

A PLAN DESCRIPTION

ORGANIZATION AND PURPOSE The Peace Officers' Annuity and Benefit Fund of Georgia 1s a cost-~haring mult1pleemployer defined benefit pens10n plan established in 1950 by the General Assembly of Georgia for the purpose of paying retirement benefits to the peace officers of the State of Georgia The Board of Comm1ss1oners of the Annuity and Benefit Fund ,~ compnsed of six (6) member~ and consists of the Governor or his des1gnec, an appointee of the Governor other than the Attorney General, the Comm1ss10ner of Insurance or h1~ des1gnee, and three active or retired peace officers appointed by the Governor in accordance with the Official Code of Georgia Annotated Sect10n 47-17-20 The Peace Officers' Annuity and Benefit Fund of Georgia 1s considered a component unit of the State of Georgia and 1s mcluded withm the State of Georgia reporting entity for financial reporting purposes because of the s1gmficance of its legal, operational, and financial relationships v.1th the State of Georgia

Ind1v1duals ehg1ble to apply for membership in the Annmty and Benefit Fund arc defined in the Official Code of Georgia Annotated Section 47-17-1 and generally include any ind1v1dual employed by the State of Georgia or any mun1c1pahty, county, or other poht1cal subd1v1s10n thereof for the preservation of pubhc order. the protechon of hfe and property or the detect10n of crime, and full-time employees of the Annmty and Benefit Fund The Annuity and Benefit Fund 1s funded through a combmahon of member contnbut10ns paid by the affected member and designated portions of fines and forfeitures collected for cnmmal and quas1-cnminal cases involving the v10lat1on of State of Georgia laws, county ordinances, or mumc1pal ordinances

CURRENT MEMBERSHIP The followmg analysis compares the membership of the Peace Officers' Annmty and Benefit Fund of Georgia at June 30, 2002, to that of the pnor year

June 30, 2002 June 30, 2001

Rehrees and Benefic1anes Currently Rece1vmg Benefits and Terminated Members Entitled to but not yet receiving Benefits For D1sab1hty for Retirement For Surv1vorsh1p

384 1,431
277

343 1,370
268

Number of Active Members

~
ll.iM

12ll
l!l ~I~

-4-

PEACE OFFICERS' ANNUITY AND BENErIT FUND OF GEORGIA EXHIBIT C'' SELECTED FINANCIAL NOTES



JUNE 30, 2002

A PLAN DESCRIPTION
PLAN BENEFITS The Peace Officers' Annuity and Benefit Fund of Georgia pro\'Ides retirement as well as death and d1sab1hty benefit~ Benefit prov1s10ns and vestmg requirements are estabh~hed by statute and may be amended only by the General Assembly of Georgia A descnpt1on of plan benefits and vestmg requirements 1s as follows
{A) RETIREMENT CONDITIONS Retirement benefits vest after ten years of credited service Normal retirement 1s the earlier of
(I) The later of the first day of the month next followmg the member's fifty-fifth birthday or the first day of the month followmg the completion of ten years of service, or
(2) The first day of the month followmg the completion of thirty years of service. regardless of age
(B) RETIREMENT BENEFITS The normal monthly benefit 1s calculated by mult1plymg $22 00 by the number of years of credited service Thirty years of credited service 1s the maxlffium amount, which may be used for the calculat10n
(C) OPTIONAL BENEFITS The followmg optional benefit prov1s1ons are available to members upon application for retirement benefits
(I) I00% Jomt Life Annuity
(2) 50% Jomt Life Annuity
The monthly benefit amount paid under the optional prov1s1ons 1s the actuarial equivalent of the normal monthly retuement benefit and 1s payable until remarriage
(D) DISABILITY BENEFITS D1sab1hty benefits vest after twenty years of credited service SubJect to the approval of the Board of Commissioners, any active member of the Annuity and Benefit Fund Jommg pnor to July I, 1993, with less than twenty years of credited service who becomes totally and permanently disabled due to disease or mJury may be granted a monthly pension m the amount of$349 26 Any active member of the Annwty and Benefit Fund with more than twenty years of credited service who meets the cntena cited above may qualify for a monthly pens10n calculated m the same manner as a retirement based on age and service
(E) DEATH BENEFITS (I) If a member dies before retirement, the beneficiary 1s entitled to a lump sum settlement m the amount of $3,500 00

-5-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" SELECTED FINANCIAL NOTES JUNE 30, 2002

A PLAN DESCRIPTION

PLAN BENEFITS (2) If a member dies while m the lme of duty and has a designated beneficiary, that beneficiary will be ehg1ble for a lump sum benefit of $5,500 00

(3) If a member dies after his or her retuement date, the beneficiary 1s enlltled to a death payment that 1s decreased by the amount received by the member m
retirement unul they have received a total of $ I,000 00 m pension After they have received the first $ I,000 00 m pens10n, the death payment remams at the
$2,500 00 level

(4) If a member dies before or after the reurement date, but before benefits begm,
and has an eligible spouse, that spouse may elect to receive a reduced monthly annmty

(F) TERMINATION At any time before a member begms drawing retirement benefits, the member may request a 95% refund of all member contnbuuons paid mto the Annmty and Benefit Fund Any mterest or penalties are not refundable

FUNDING REQUIREMENTS Contnbut10n provisions are estabhshed by statute and may be amended only by the General Assembly of Georgia A descnptlon of contnbut10n requirements 1s as follows

(A) MEMBER'S CONTIBUTIONS Members must contnbute $10 00 per month of credited service

(B) COURT FINES AND FORFEITURES For each cnmmal and quas1-cnmmal case mvolvmg the violation of State of Georgia laws, county ordmances, or mumc1pal ordmances, a sum based upon the scale set forth below 1s collected and remitted to the Annmty and Benefit Fund

For fines or bonds forfeitures m excess of $4 00, but not more than $25 00

$ 3 00

For fines or bond forfeitures m excess of $25 00, but not more than $50 00

$ 4 00

For fines or bond forfeitures m excess of $50 00, but, not more than $100 00

$ 5 00

For fines or bond forfeitures m excess of$ I00 00

5%

-6-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C"

SELECTED FINANCIAL NOTES



JUNE 30, 2002

B CASH AND INVESTMENTS
CASH AND CASH EQUIVALENTS Cash and Cash Eqmvalents mclude currency on hand and demand deposits with banks
INVESTMENTS The Official Code of Georgia Annotated (0 CG A) Section 47-17-23 states that the Board of Commissioners of the Peace Officers' Annmty and Benefit Fund of Georgia shall have full power to mvest and remvest funds, subJect to all terms, cond1t10ns, hm1tahons, and restnct10ns imposed by the "Pubhc Retirement Systems Investment Authonty Law" of Georgia. In add1t1on, the Board of Comm1ss1oners 1s restricted to mvest no more than 60% of the assets of the Annmty and Benefit Fund m eqmtles and may not mvest more than I 0% of the assets in corporations or m obhgallons of corporations organized m a country other than the Umted States of Amenca or Canada Statutory prov1s10ns govemmg ehg1ble mvestments are enumerated m the O CG A. Secllon 47-20-83 as follows
( 1) Corporallons or obhgat1ons of corporallons organized under the laws of Georgia or any other state or under the laws of Canada, but only 1f the corporat10n has a market cap1tahzat10n equivalent to $ 100 m1lhon, provided, however, that ei,.cept as provided m O CG A Section 47-20-84, no fund shall mvest m corporat10ns or m obhgat10ns of corporations organized m a country other than the Umted States or Canada, provided, further, that such obhgallon shall be hsted as mvestment grade by a nat10nally recogrnzed rating agency,
(2) Repurchase and reverse repurchase agreements for direct obhgat10ns of the Umted States government and for obhgat10ns uncond1t10nally guaranteed by agencies of the Umted States government and for mvestments ehg1ble under paragraph (I) of this Code section,
(3) Cash assets or deposits in checkmg or savmgs accounts under certificates of deposit or m other form m banks and trust companies and m savmgs accounts, certificates of deposit, or similar certificates or evidences of deposits m savmgs and loan associations and bwldmg and loan associations wluch have qualified for the msurancc protect10n afforded by the Federal Deposit Insurance Corporat10n;
(4) Bonds, notes, warrants, and other evidence of mdebtedness which are direct obhgat10ns of the government of the Umted Stat~s of America or for which the full faith and credit of the government of the Umted States of America 1s pledged for the payment of prmc1pal and mtercst,
(5) Loans guaranteed as to principle and mterest by the government of the Umted States of America, or by any agency or mstrumentahty of the government of the Umtcd States of America, to the extent of such guaranty,

-7-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHJJ3TT "C" SELECTED FINANCIAL NOTES JUNE 30, 2002
B CASH AND INVESTMENTS
INVESTMENTS
(6) Taxable bonds, notes, warrants, and other secunt1es not in default which arc the direct obligauons of any state of the Umted States or of the D1~tnct of Columbia, or of the government of Canada or any province of Canada, or for which the full faith and credit of such state, d1stnct, government, or province has been pledged for the payment of pnnc1pal and interest,
(7) Bonds, notes, warrants, and other securities not in default wluch are the direct obligations of the government of any foreign country which the International Monetary Fund lists as an industnalized country and for which the full faith and credit of such government has been pledged for the payment of principal and interest, provided such securities arc listed as investment grade by a nationally recognized rating agency,
(8) Bonds, debentures, or other secunt1es issued or insured or guaranteed by any agency, authonty, umt, or corporate body created by the government of the Umted States of Amenca whether or not such obligat10ns are guaranteed by the Umted States,
(9) Collateral1zed mortgage obligallons that are hsted as mvestment grade by a nationally recogmzed rating agency,
(I 0) Obhgat10ns issued, assumed, or guaranteed by the International Bank for Reconstruction and Development or the Internat10nal Fmanc1al Corporation,
(11) In addition to those mvestmcnts eligible under paragraph ( 1) of this Code seclion, bonds, debentures, notes, and other evidences of mdebtcdness issued, assumed, or guaranteed by any solvent institution ex1stmg under the laws of the Umted States of America or of Canada, or any state or provmce thereof, which are not m default as to pnnc1pal or mterest and which are secured by collateral worth at least 50 percent more than the par value of the entire issue of such obhgauons, but only 1f not more than one-thud of the total value of the required collateral consists of common stocks,
(12) In addition to those mvestments ehg1ble under paragraph (I) ofth1s Code section, secured and unsecured obligations of issuers described in paragraph (11) of this Code sect10n other than the obligations described m paragraph (11) of this Code section, bearmg mterest at a fixed rate, with mandatory pnnc1pal and mterest due at specified limes, 1f the net earmngs of the issuing, assummg, or guaranteemg mslitut10n available for its fixed charges for a penod of five fiscal years next proceeding date of acqu1s1Uon by the fund have averaged per year not less than one and one-halftimes its average annual fixed charges applicable to such period
-8-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C"' SELECTED FINANCIAL NOTES JUNE 30, 2002
B CASH AND INVESTMENTS
INVESTMENTS and 1f dunng either of the last two years of the penod of such net carnmgs have been not less than one and one-half times its fixed charges for the year, provided, however, that any such obligation shall be hsted as mvestment grade by a nationally recogmzed ratmg agency,
(13) In addition to those mvestments ehg1ble under paragraph (I) ofth1s Code section,
equipment trust obligations or certificates adequately secured and ev1dencmg an mterest m transportat10n eqwpment, wholly or m part withm the Umted States of America, and the nght to receive determmed 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 secuntles ehg1ble for mvestment under this article,
(15) Purchase money mortgages or hke secunues received upon the sale or exchange of real property acquired,
(16) In add1t1on to those mvestments ehg1ble under paragraph (I) of th.ts Code sect10n. a mortgage or mortgage part1c1pat10n, pass-through, conventional pass-through, trust certificate, or other s1m1lar secunty which represents an und1v1ded, beneficial mterest m a pool of loans secured by first mortgages, deeds of trust, or deeds to secure debt upon fee simple, unencumbered, improved, or mcome-producmg real property located m the Uruted States or Canada, wluch 1s improved with a residential bmldmg or condomm1urn unit or buildmgs designed for occupancy by not more than four fam1hes, mcludmg leasehold estates m such real estate 1f such first mortgages, deeds of trust or deeds to secure debt arc fully guaranteed or msured by the Federal Housmg Admm1strat10n, the Urutcd States Department of Veterans Affairs, the Farmers Home Adm1mstrat1on, the Federal Home Loan Mortgage Corporat10n, the Government National Mortgage Assoc1at1on, the Federal National Mortgage Association, or any similar governmental entity or mstrurnental1ty,
( 17) Land and buildings on such land used or acquired for use as a fund's office for the convement transact10n of its O\\'II busmess, provided, however, that portions of such buildmgs not used for its own busmess may be rented by the fund to others, provided, further, that the amount mvested by a fund m office property shall not exceed IO percent of the retirement system assets,
(18) Real property acqwred m satisfaction m whole or m part of loans, mortgages, hens, Judgments, decrees, or debts prev10usly owing to the fund m the course of its busmess,
-9-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "'C" SELECTED FINANCIAL NOTES



JUNE 30. 2002

B CASH AND INVESTMENTS
INVESTMENTS (19) Real property acquired m part payment of the cons1derat1on on the sale of other real property owned by the fund 1f such transact10n effects a net reduct10n m the fund s mvestment m real estate,
(20) Real property acqmred by gift or devise, or through merger or consohdat10n with another fund, and
(21) Add1honal real property and eqmpment mc1dent to real property 1f necessary or convenient for the enhancement of the marketability or sale value of real property prev10usly acqmred or held by the fund under paragraphs (I 8). (I 9), and (20) of this Code section.
Investments are defined as those financial instruments with terms m excess of three months from the date of purchase and certam other securities held for the product10n of revenue In add1t10n, funds on deposit with the Annmty and Benefit Fund's mvestment custodian for purposes of contmual mvestment are reflected as mvestments regardless of the term of the instruments The method used to exchange or "swap" secuntles 1s the par-for-par basis with the proV1so that exceptions may be made on quantities in order to even out odd lot transact10ns and proV1ded further that the amount of such differences shall not be more that I00 bonds of $1,000 denominations Any pay-up on a swap must be recouped by add1t10nal income over a seven-year penod or over the hfe of the bond to call, whichever 1s shorter Pay-up shall not be greater than the difference regardless of the term of the instruments Investments in U S government sccuntles. stocks. bonds and debentures, notes, investment accounts, and mvestment pools are recorded at cost Accrued mterest purchased, premiums or discounts on bonds and debentures and U S government secunties are reflected as a part of cost and are not amortized over the remaming hfe of the secunty The market values reflected on the Statement of Plan Net Assets were based on valuahons appeanng m the Annmty and Benefit Fund's Investment Custodian Trust Report at June 30, 2002
Interest mcome and d1v1dend mcome are recogmzed when received in cash Gains and/or losses are recogruzed usmg the completed transaction method Accrued mterest purchased 1s recorded as a reduction of interest income at the time of purchase.
Approximately 25% of the net assets available for benefits are invested in U S government secuntles
The Peace Officers' Annmty and Benefit Fund of Georgia participates man investment pool managed by the Employees' Retirement System of Georgia (ERS) Disclosures concemmg nsk exposure from mvestment m denvat1ves or s1m1lar investments made through the ERS mvestment pool, 1f any. are located m the ERS financial report

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C"' SELECTED FINANCIAL NOTES JUNE 30, 2002

C CONTRIBUTIONS REQUIRED AND MADE

FUNDING POLICY The min1mwn annual employer contnbut10n reqmrements are set forth in the Official Code of Georgia Annotated Section 47-20-10 and are not actuanally determined This statute further proh1b1ts any action to grant a benefit increase until such time as the m1rumwn annual contnbut10n requirements meet or ell.ceed leg1slauve reqmrements The actuanal valuat10n as of July I, 2002, which reflected the proceeds of designated port10ns of fines and forfeitures as the employer contnbuuon, md1cated that the m1rumwn employer contnbut10n level was met Member contnbuuon reqmrements are set forth m O C G A Section 47-17-44 and are not actuanally determmed

FUND REQUIREMENTS Actual contnbut1ons for the year ended June 30, 2002, were as follows

Member Contnbutlons Fmes and Bond Forfeitures

$ 1,651,387 72 14,159,969 67
$15,811.357,39

D RELATED PARTY TRANSACTIONS

The Secretary-Treasurer of the Peace Officers' Annmty and Benefit Fund of Georgia 1s also Secretary-Treasurer of the Probate Courts Retuement of Georgia For the year ended June 30, 2002, the Annuity and Benefit Fund received $13,267 50 from the Judges of the Probate Courts Retirement Fund of Georgia for contracted admm1strat1ve services

E CHANGES IN FIXED ASSETS

Fixed assets used m plan operations are not included m the accompanying financial

mformat10n The following 1s a summary of changes in fixed assets dunng the fiscal year

Land

Bmldmg Egmpment

Total

Balance July 1, 2001 $ 5,000 00 $ 305,295 76 $ 233,558 98 $ 543,854 74

Add1t10ns

0 00

0 00

Deleuons

90,970 79 90,970 79

Balance June 30, 2002 $ 5,000 00 $ 305,295 76 $ 142,588 19 $ 452,883 95

-11-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C'" SELECTED FINANCIAL NOTES JUNE 30, 2002
F CONTINGENCIES At June 30, 2002, the Peace Officers Annuny and Benefit Fund of Georgia had mac11ve members dues on hand m the amount of $464,433 66 Nmety-five percent (95%) of such dues are refundable upon request of the mact1ve members G EMPLOYEES' RETIREMENT PLAN The Peace Officers' Annmty and Benefit Fund of Georgia part1c1pates m a defined contribution money purchase pens10n plan, m which benefits depend solely on amounts contributed to the plan plus investment eammgs The Peace Officers' Annuity and Benefit Fund of Georgia Employees' Retirement Plan was established effective July I, 1998, for the purpose of prov1dmg retirement allowances for employees of the Peace Officers' Annmty and Benefit Fund of Georgia Van Kampen American Capital Trust Company 1s custodian and trustee of the plan Part1c1pants shall be fully vested at all umes m his or her md1v1dual account This plan 1s intended to be a paruc1pant directed plan The normal reurement age under the plan 1s 59 For each plan year, the Peace Officers' Annmty and Benefit Fund of Georgia v,ill contribute for each qual1fymg part1c1pant an amount equal to 7 5% of the quahfymg part1c1pant's compensation m the fiscal year Upon termmallon or retirement, any vested benefit will be paid to the part1c1pant or their beneficiaries m a lump sum or as periodic payments from one of the deferred opllons available The Annuity and Benefit Fund's total payroll m fiscal year 2002 amounted to $244,534 52, of which $227,988 00 wa~ for covered employees and used by the Annmty and Benefit Fund for calculating contributions For fiscal year 2002. the Annmty and Benefit Fund contributed $16,814 72 to tlus retirement plan Plan prov1,1ons and contribution reqmrements are established and may be amended by the Board of Comm1ss10ners of the Peace Officers' Annmty and Benefit Fund of Georgia
-12-

SUPPLEMENTARY INFORMATION - 13 -

PEACE OFFICERS' ANNUITY AND BENEFIT EUN OF ~EOB~IA SCHEDULE QF ADMINISTRATIVE EXPENSES PAID BY OBJECT
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

PERSONAL SERVICES
Salaries and Wages Emplo~r's Contnbutlons t:lr
FICA Retirement Health Insurance Life Insurance Personal Laab1hty Insurance Workers' Compensation Insurance
OPERATING EXPENSES
Regular Operating Expenses Motor Vehicle Expenses Suppiles end Matonals Repairs and Maintenance Utilities Insurance and Bonchng Other Operetmg Expenses Publlcat10ns and Pnntlng
Travel
Motor Vehicle Purchases Lease/Purchase of Equipment
Equ,pmont Equipment Purchases Lease/Purchase of Equipment
Computer Charges SuppHes and Matenals Repairs and Maintenance Software Equipment Purchases
Telecommun1cations
Per Diem and Fees

$
$ 18,707 48 16,814 72 18,937 21 20215 22,550 00 703 00

244,534 52 77 914 56 $

322,449 08

$ 1,593 69 16,271 50 9,241 77 6,949 90
4,053 00 9,064 53
2 904 46 s

50,078 85 8,796 59

7 586 36

s 8,02348
311964

11,14312

s 4 258 81
5,18010
93,025 68
753 25

103,217 84 6,872 82
1 169 246 14

1,356,941 72

$ 1 679 390 80

- 14 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA RECONCILIATION OF SALARIES YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

Total per Annual Supplement

AdJUSbnents
Carter, Reynolds,

Robert W Beatnce G

Total per Report

$ 253,869 02
-3,750 00 -5 584 50
$ 244 534 52

- 15 -

PEACE OFF/GERS' ANNUITY AND BENEFIT FUND OF GEORGIA RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30 2002

SCHEDULE "3"

Totals per Annuel Supplement

Adjustments

Georgia Pool Index

Hrtson

C Oa\lid

P~nel Options

Teache" Ret.-ement. System

Totala per Report

TYPE PAYMENT
$

FEE AMOUNT

EXPENSE AMOUNT

116133277 S

000 $

Othar Fee.s Consultant Tempora1y Staffing Other Fees

6 194 37 60000 819 00 300 00

$

11692-461-4 $

000 $

TOTAL 1 161,332 77
6 18-4 37 60000 B19 00 30000
1 169 246 14

- 16 -

PEACE

OFFICERS' ANNUITY AND BENEFIT FUND OF SCHEDULE OF FUNDING PROGRESS

GEORGIA

YEAR ENDED JUNE 30 2002

SCHEDULE "4"

ACTUARIAL VALUATION
DATE

ACTUARIAL VALUE OF ASSETS
l

ACTUARIAL ACCRUED LIABILITY (AAL) -ENTRY AGE NORMAL
b

UNFUNDED AAL
(UAAL)
(b-a)

s s 07/01/1998

263,14197400 $ 237 509 076 00

-25,632,898 00

s s s 07/01/2000

307 907,423 00

283 082,799 00

-24 824,624 00

07/01/2002 s 345 900,591 00 s 317 078 498 00 s -28 822 093 00

lnformabon pnor to July 1 1998 1s not available

The lllformet1on presented 1n this schedule la based on the ac:tuenal study prepared as of July 1, 2002 The actuanal value of esseb 1s equal to 110 2% of market value ofuoets

FUNDED
RATIO
(Bib)
110 8%
1088%
109 1%

COVERED PAYROLL
(c)

UAALASA PERCENTAGE OF COVERED
PAYROLL
((b-a}/c)

nla

nla

nla

nla

nla

nla

- 17 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA SCHEDULE OF EMPLOYER CONTRIBUTIONS YEAR ENDED JUNE 30 2002

SCHEDULE "5"

FISCAL YEAR

ANNUAL REQUIRED CONTRIBUTION

1999

$ 9,00211900

2000

$ 9,654,735 00

2001

$ 9,271,564 00

2002

$ 12,071,218 00

lnforma!JOn pnor to July 1, 1998, e not avaiable

The mformabon presented ,n th,s schedule e based on the actuanal study prepared as of July 1, 2002 Addt,onal mformabon of this latest actuanal evaluabon follows

ValuaMn Dae

Actuanal Cost Method

Amortizabon Method

Rema,mng "'1lortlzabon Penod

Asset Valuat10n Method

Actuanal Assumpbons Investment Rate of Return Projected Salary Increases Includes ln!abon at Cost of LMng Adjustments

PERCENTAGE CONTRIBUTED
146% 140% 14B% 117%
July 1, 2002 Entry age normal Level dollar open 30years Mar1<et-related value
7% Not applicable None assumed None assumed

- 18 -