Comprehensive annual financial report fiscal year ended June 30, 2010

Employees' Retirement System of Georgia
Comprehensive Annual Financial Report
Fiscal year ended June 30, 2010

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

A component unit of the State of Georgia

Our Mission
Our mission is to be guardian of the retirement plans on behalf of the State of Georgia for the ultimate benefit of the members, retirees and beneficiaries.
Our vision is to use our passion for excellence to become the "Best Managed" retirement system in the country, utilizing state-of-the-art technology, and knowledgeable, customer-focused staff to best serve customers and to protect the retirement system for all of our current and future members.
Our Values
Our Core Values are:
Quality execution Accurate results Continuous improvement Knowledgeable and customer focused staff Sound and secure investment of funds

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2010

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Pamela L. Pharris Executive Director
A component unit of the State of Georgia

Table of Contents

Introductory Section

Boards of Trustees

4

Letter of Transmittal

5

Administrative Staff and Organization

7

Organizational Chart

8

Financial Section

Independent Auditors' Report

10

Management's Discussion and Analysis (Unaudited)

11

Basic Financial Statements:

Combined Statement of Net Assets as of June 30, 2010

17

(With Comparative Totals as of June 30, 2009)

Combined Statement of Changes in Net Assets for the Year Ended June 30, 2010

18

(With Comparative Totals for the Year Ended June 30, 2009)

Combining Statement of Net Assets as of June 30, 2010

19

Defined Benefit Plans

Combining Statement of Net Assets as of June 30, 2010

20

Combining Statement of Changes in Net Assets for the Year Ended June 30, 2010

21

Defined Benefit Plans

Combining Statement of Changes in Net Assets for the Year Ended June 30, 2010

22

Notes to Financial Statements

23

Required Supplementary Schedules (Unaudited)

Schedules of Funding Progress

39

Schedules of Employer Contributions

40

Notes to Required Supplementary Schedules

41

Additional Information

Administrative Expenses Schedule

43

Contributions and Expenses for the Year Ended June 30, 2010

(With Comparative Totals for the Year Ended June 30, 2009)

Schedule of Investment Expenses

44

For the Year Ended June 30, 2010

(With Comparative Totals for the Year Ended June 30, 2009)

Investment Section

Investment Overview

46

Pooled Investment Fund/Rates of Return

47

Asset Allocation

48

Equity Holdings/Schedule of Fees and Commissions

49

Fixed Income Holdings

50

Actuarial Section

Actuary's Certification Letters

52

Summary of Actuarial Assumptions

59

Active Member Overview

65

Contribution Rates

66

Analysis of Change in Unfunded Accured Liability

67

Statistical Section

Introduction

70

Additions by Source - Contribution/Investment Income

71

Deductions by Type

72

Changes in Net Assets

74

Number of Retirees

75

Average Monthly Payments to Retirees

76

Annual Benefit

77

Withdrawal Statistics

78

Average Monthly Benefit Payment for New Retirees

79

Top Participatory Employers

84

Statistical Data at June 30, 2010

85

Introductory Section

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Introductory Section
Boards of Trustees
Employees' Retirement System, Georgia Defined Contribution Plan, Legislative Retirement System, and Georgia Military Pension Fund.

Russell W. Hinton Chair

Harold Reheis Vice-Chair

Dan Ebersole

Steve Stevenson

Michael D. Kennedy

Frank F. Thach, Jr.

Public School Employees Retirement System*

Ned J. Winsor State Employees Assurance Department**

Samuel B. Kellett

J. Sammons Pearson

Michael Thurmond

Georgia Judicial Retirement System*

H. Phillip Bell

Daniel J. Craig

William D. Ray

Karlton Van Banke

*The PSERS and GJRS boards are comprised of the members of the ERS board and additional members shown under each plan. **SEAD -- ERS Board Members Russell Hinton, Dan Ebersole, and Steve Stevenson serve in addition to the two members show above. 4

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Introductory Section
Two Northside 75 Atlanta, GA 30318

Letter of Transmittal
December 30, 2010

I am pleased to present the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010 of all plans administered by Employees' Retirement System of Georgia (the System). The management for the System is responsible for the accuracy, completeness and fairness of the presentation including all disclosures. It is to the best of our knowledge and belief that the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the System.
Profile of the System
Employees' Retirement System was established to provide benefits for all State employees in 1949. Plans administered by the System include the Employees' Retirement System (ERS), the Legislative Retirement System (LRS) established in 1979, the Public School Employees Retirement System (PSERS) established in 1969, the Georgia Defined Contribution Plan (GDCP) established in 1992, the Georgia Judicial Retirement System (GJRS) established in 1998, and the Georgia Military Pension Fund (GMPF) established in 2002. In addition, the Board of Trustees is responsible for a group term life insurance plan (SEAD), the 457 Plan established in 1974, and the 401(k) Plan which began in 1994. A summary of each plan can be found on pages 23 through 31 of this report. The assets of all plans are pooled together into one fund except for the three defined contribution plans which are maintained individually.
The ERS, LRS, GDCP, GMPF, 401(k) and 457 plans are administered by a 7 member Board made up of 3 ex-officio members, 1 Governor appointed member, and 3 Board appointed members. PSERS has the same Board as ERS with 2 additional Governor appointed members. GJRS has the same Board as ERS with 3 additional Governor appointed members.
As of June 30, 2010, the System's defined benefit plans and GDCP served a total of 125,742 active members and 53,469 retirees/beneficiaries from 914 employers around the state. There were 29,324 participants in the 401(k) plan with a total account balance of $355 million. The 457 plan had 14,446 participants with a balance of $503 million. There are 738 participating employers from around the state in the 457 and 401(k) plans.
Legislation
In the 2010 Session, ERS sponsored legislation to assist in maintaining the security and soundness of all the plans we administer, while striving to protect the members, retirees and beneficiaries in these plans. Acts 450, 455 and 457 moved us in the direction of our goal.

Act 450 revised language relating to the handling of medical examinations for persons that are receiving disability benefits under age 60 by removing the ability for the medical examinations to be conducted at the retiree's place of residence. Additionally, the bill provides that earnable compensation in the calculation of earnings limitation includes workers' compensation income. This prevents a member who retires on disability due to workers' compensation from making more money in disability retirement than as an active employee. Workers' compensation benefits plus pension disability cannot exceed the last working salary. The definition of independent contractor rules for rehired retirees was included in statute by Act 455. This Act also requires employers to report to ERS when they rehire a retiree.
We presented legislation to keep our plans in compliance with Federal law which was signed into law as Act 457. It is anticipated that similar legislation will be presented each year to maintain our Federal compliance.
Summary of Financial Information
Please refer to the Management's Discussion and Analysis starting on page 11 of this report for an overview of the financial status of the System, including a summary of the System Net Assets, Changes in Net Assets, and Asset Allocations.
In FY2010, the pooled fund generated a return of 10.99% a marked improvement from the prior two year's market decline. The fund continues to invest in a mix of high quality bonds and stocks which allows the System to participate in rising markets while controlling the downside risks. This has proven to be a successful strategy for other markets and for our System. For further information on investments of the pooled fund, please refer to pages 46 through 50 of this report.
The objective of ERS pension trust funds is to meet longterm benefit promises through contributions that remain approximately level as a percent of member payroll over time while maintaining an actuarially sound system. Historical information relating to the progress in meeting this objective is presented on page 39. The latest actuarial valuations conducted as of June 30, 2009 show the funded ratio of most systems decreasing except for the two smaller funds LRS and GMPF. The decrease is primarily due to unfavorable investment experience. The following table shows the change in funding percentage for each of the pension systems:
5

Introductory Section

ERS PSERS LRS GJRS GMPF

FY2008 89.4%
102.7% 125.6% 116.7%
27.6%

FY2009 85.7% 93.5%
128.8% 112.4% 30.5%

In 2010, the actuary will conduct a five year experience study on all systems. Further information regarding the funding condition of the pension plans can be found in the Actuarial Section of this report.
Initiatives
Our focus continues to be on several keys areas: Enhanced Customer Service, Succession Planning/Growth and Technology Enhancements/Business Continuity.
Customer Service ERS continues to move in the direction of increased resources for our members whether that be online activities, additional/ new educational classes or timely pushed communications Our current focus for online tools is around the refund application and retirement processes. With these processes online, it will allow for quicker processing for all members. The administration of our defined contribution plans is moving to the GaBreeze system which already allows our members to manage their flexible benefits.
Earlier this year, the website was upgraded to include an online version of our Workshop for Retirement Application Processing (WRAP). This provides members another opportunity to gather information about the retirement process versus traveling to a meeting. These online workshops will be expanded to include similar courses for all of our systems and additional educational pieces for active members. For some of the plans, communication has always been via mail or the call center. A focus will be placed on developing educational meetings with these members at locations throughout the state as we do for ERS members.
Succession Planning Succession and Growth Development strategies were developed this year in our Member Services division. In order to push forward with these strategies, pension classes were developed by our most experienced employees to be utilized in cross-training of all employees in this division. In addition, a knowledgebase has been created as a way to capture our institutional knowledge and is accessible by all employees in the agency. This allows us to expand on the experience our current employees possess and move them forward in higher roles.

Technology Enhancements and Business Continuity ERS has taken on significant technology challenges this year and successfully completed several high visibility initiatives. In our development area, we established a process by which our rehired retirees are tracked in the system, created files for use by GaBreeze to include in the total compensation statements for active members, and implemented SharePoint. In our operations area, the vast amount of time spent this year has been on upgrading and improving our network infrastructure, as well as ensuring operational resiliency with the build-out of our disaster recovery facility. In the upcoming year, our telephone system will be upgraded to allow for all of our systems to work together in supporting our members.
Acknowlegements
This report reflects the combined effort of our staff under the Board's leadership. Copies of this report, along with other valuable plan information, can be downloaded from the System's website.
I would like to express my sincere thanks to the Boards of Trustees for their leadership and support. Many thanks are also extended to the offices of the Governor, Lieutenant Governor, members of the House and Senate Retirement Committees and their staff, members of the House and Senate, and the department officials whose support and assistance have helped ERS accomplish its mission over the years.
Respectfully submitted,
Pamela L. Pharris, Executive Director Employees' Retirement System of Georgia

6

Introductory Section
Administrative Staff and Organization

Pamela L. Pharris Executive Director

Jim Potvin Deputy Director

Charles W. Cary, Jr. CIO - Investment Services

Gregory J. Rooks Controller

Chris Hackett Director
Information Technology

Nicole Paisant Director
Human Resources

Susan Anderson Director
Member Services

Carlton Lenoir Director
Financial Management

Megan Schaum Director
Peach State Reserves

Consulting Services
Cavanaugh Macdonald Consulting, LLC - Actuary KPMG LLP - Auditor State Street Bank and Trust Company - Defined Contribution Custodian AON Hewitt - Defined Contribution Consultant ING LLC - Defined Contribution Administrator
Investment Advisors
Albritton Capital Management Mondrian Investment Partners Limited Philadelphia International Advisors Cramer Rosenthal McGlynn Munder Capital Management Barrow, Hanley, Mewhinney & Strauss Cooke & Bieler

Medical Advisors
Harold E. Sours, M.D., Atlanta GA Benjamin B. Okel, M.D., Decatur, GA Ira H. Slade, M.D., Griffin, GA Douglas Smith, M.D., Smyrna, GA Richard Tyler, M.D., Atlanta, GA William H. Biggers, M.D., Atlanta, GA Jeffrey T. Nugent, M.D., Atlanta, GA Pedro F. Garcia, M.D., Atlanta, GA Shel Sharpe, M.D., Rome, GA
PENN Capital Management Montag & Caldwell, Inc. RidgeWorth Capital Management Sands Capital Management Fisher Investments Mesirow Financial Investment Management

7

Introductory Section

Organizational Chart

Boardof Trustees

Executive Director

Deputy Director

Investment Services
Division

Information Technology
Division

Financial Management
Group

Member Services
Division

Accounting Division

Executive Support

8

Financial Section

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Financial Section

Independent Auditors' Report

KPMG LLP Suite 2000 303 Peachtree Street, NE Atlanta, GA 30308-3210

The Board of Trustees Employees' Retirement System of Georgia:

We have audited the accompanying financial statements of the Employees' Retirement System of Georgia (the System), a component unit of the State of Georgia, as of and for the year ended June 30, 2010 as listed in the table of contents. These financial statements are the responsibility of the System's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the System's June 30, 2009 financial statements and, in our report dated September 30, 2009, we expressed an unqualified opinion on those financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the System's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the System's net assets as of June 30, 2010 and the changes in net assets for the year then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report dated September 28, 2010 on our consideration of the System's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis, the schedules of funding progress, and schedules of employer contributions on pages 11 through 16 and pages 39 through 40, respectively, are not a required part of the basic financial statements but are supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information, and express no opinion on it.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The introductory section, schedules of administrative expenses and investment expenses, investment, actuarial and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedules of administrative expenses and investment expenses have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material repects in relation to the basic financial statements taken as a whole. The introductory, investment, actuarial, and statistical sections have not been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, accordingly, we express no opinion on them.

December 30, 2010 10

Financial Section
Management's Discussion and Analysis (Unaudited)
June 30, 2010
This section provides a discussion and analysis of the financial performance of the Employees' Retirement System of Georgia (the System) for the year ended June 30, 2010.The discussion and analysis of the System's financial performance is within the context of the accompanying basic financial statements, notes to the financial statements, required supplementary schedules, and additional information following this section.
The System is responsible for administering a cost-sharing, multiple-employer defined benefit pension plan for various employer agencies of Georgia, along with eight other defined benefit pension plans and three defined contribution plans.
The defined benefit pension plans include:
Employees' Retirement System (ERS) Public School Employees Retirement System (PSERS) Legislative Retirement System (LRS) Georgia Judicial Retirement System (GJRS) Georgia Military Pension Fund (GMPF) State Employees' Assurance Department Active Members Trust Fund (SEAD-Active) State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund (SEAD-OPEB) Superior Court Judges Retirement Fund (SCJRF) District Attorneys Retirement Fund (DARF)
The defined contribution retirement plans include:
Georgia Defined Contribution Plan (GDCP) 401(k) Deferred Compensation Plan (401(k)) 457 Deferred Compensation Plan (457)
Financial Highlights
The following highlights are discussed in more detail later in this analysis:
The net assets of the System increased by $521 million, or 4.0%, from $13.2 billion at June 30, 2009 to $13.7 billion at June 30, 2010. The increase was primarily due to the increase in the bond and equities markets in 2010.
For the year ended June 30, 2010, the total additions to net assets were an increase of $1.8 billion compared to a decrease of $1.7 billion for the year ended June 30, 2009. For the year ended June 30, 2010, the additions consisted of employer and member contributions totaling $410 million, insurance premiums of $7.6 million, net investment income of $1.4 billion, participant fees of $0.9 million, and other income of $0.3 million. For the year ended June 30, 2009, the additions consisted of employer and member contributions totaling $422 million, insurance premiums of $8.4 million, net investment loss of $2.1 billion, participant fees of $1.4 million, and other income of $0.9 million.
Net investment income of $1.4 billion in 2010 (comprised of interest and dividend income, the change in fair value of investments, and other, reduced by investment expenses) represents a $3.5 billion increase, compared to the net investment loss of $2.1 billion for the year ended June 30, 2009. The net investment income is due primarily to the increase in the bond and equities markets in 2010.
The total deductions were $1.3 billion and $1.3 billion for the years ended June 30, 2009 and 2010, respectively. For the year ended June 30, 2010, the deductions consisted of benefit payments of $1.3 billion, refunds of $18 million, death benefits of $28 million, and administrative expenses of $21 million. For the year ended June 30, 2009, the deductions consisted of benefit payments of $1.2 billion, refunds of $18 million, death benefits of $26 million, and administrative expenses of $21 million.
Benefit payments paid to retirees and beneficiaries increased by $18.1 million, or 1.5% from $1.24 billion in 2009 to $1.26 billion in 2010. This increase was the result of increases in the number of retirees and beneficiaries receiving benefits across all plans.
11

Financial Section
Management's Discussion and Analysis (Unaudited)
Overview of the Financial Statements
The basic financial statements include (1) the combined statement of net assets and changes in net assets, (2) the combining statements of net assets and changes in net assets, and (3) notes to the financial statements.The System also includes in this report additional information to supplement the financial statements.
In addition, the System presents two types of required supplementary schedules, which provide historical trend information about the plans' funding. The two types of schedules include (1) a schedule of funding progress and (2) a schedule of employer contributions.
The System prepares its financial statements on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. These statements provide information about the System's overall financial status.
Description of the Financial Statements
The Combined Statement of Net Assets is the statement of financial position presenting information that includes all of the System's assets and liabilities, with the balance representing the Net Assets Held inTrust for Pension Benefits. The investments of the System in this statement are presented at fair value. This statement is presented on page 17.
The Combined Statement of Changes in Net Assets reports how the System's net assets changed during the fiscal year. The additions and deductions to net assets are summarized in this statement. The additions include contributions to the retirement plans from employers and members, group life insurance premiums, participant fees, and net investment income, which includes interest and dividends and the net increase in the fair value of investments. The deductions include benefit payments, life insurance death benefit payments, refunds of member contributions and interest, and administrative expenses. This statement is presented on page 18.
The Combining Statement of Net Assets and the Combining Statement of Changes in Net Assets present the financial position and change in financial position for each of the funds administered by the System, including the Pooled Investment Fund that holds and invests funds from each of the participating plans and funds. These statements begin on page 19.
Notes to the Financial Statements are presented to provide the information necessary for a full understanding of the financial statements. The notes to the financial statements begin on page 23.
There are two Required Supplementary Schedules included in this report. These required schedules are applicable to five of the defined benefit plans: ERS, PSERS, LRS, GJRS, and GMPF. The Schedule of Funding Progress presents historical trend information about the actuarially determined funded status of the plans from a long-term, ongoing plan perspective, and the progress made in accumulating sufficient assets to fund benefit payments as they become due. The Schedule of Employer Contributions presents historical trend information about the annual required contributions of employers and percentage of such contributions in relation to actuarially determined requirements for the years presented. The required supplementary schedules begin on page 39.
Notes to Required Supplementary Schedules are presented to provide the information necessary for a full understanding of the supplementary schedules. The notes to required supplementary schedules begin on page 41.
Additional information is presented, beginning on page 43. This section includes the Administrative Expenses Schedule and the Schedule of Investment Expenses. The Administrative Expenses Schedule presents the expenses incurred in the administration of these plans and funds, and the contributions from each plan and fund to provide for these expenses. The Schedule of Investment Expenses presents more detailed information on investment expenses.
12

Management's Discussion and Analysis (Unaudited)
Financial Analysis of the System
A summary of the System's net assets at June 30, 2010 and 2009 is as follows:

Financial Section

Assets: Cash and receivables Investments Capital assets, net Total assets
Liabilities: Due to brokers and accounts payable Net assets

Net Assets (in thousands)

2010

2009

Amount Change

Percentage Change

$

89,833

13,620,392

6,789

13,717,014

137,999 13,103,879
9,791 13,251,669

(48,166) 516,513
(3,002) 465,345

(34.9) % 3.9
(30.7) 3.5

38,437 $ 13,678,577

94,537 13,157,132

(56,100) 521,445

(59.3) 4.0 %

13

Financial Section
Management's Discussion and Analysis (Unaudited)

The following table presents the investment allocation at June 30, 2010 and 2009:

Asset allocation at June 30 (in percentages): Equities Domestic obligations: U.S. Treasuries U.S. Agencies Corporate and other bonds International obligations: Governments Corporates Mutual and common collective trust funds and separate accounts Short-term securities
Asset allocation at June 30 (in thousands): Equities Domestic obligations: U.S. Treasuries U.S. Agencies Corporate and other bonds International obligations: Governments Corporates Mutual and common collective trust funds and separate accounts Short-term securities

2010
57.8 %
19.6 1.8 9.6
1.4 0.6 6.4 2.8

2009
52.3 %
23.3 2.0
14.5
-- -- 6.1 1.8

$ 7,870,484
2,673,779 244,955
1,302,714
195,900 88,327 867,117 377,116
$ 13,620,392

6,857,211
3,054,228 256,591
1,901,645
-- -- 798,581 235,623 13,103,879

The total investment portfolio increased by $517 million from 2009, which is due to the increase in the bond and equities markets in 2010.
The investment rate of return in fiscal year ended June 30, 2010 was 11.0% with a 13.8% return on equities and an 8.7% return on fixed income investments. The five-year annualized rate of return on investments at June 30, 2010 was 2.6%, with a (0.2%) return on equities and a 5.9% return on fixed income investments.

14

Management's Discussion and Analysis (Unaudited)

Financial Section

A summary of the changes in the System's net assets for the years ended June 30, 2010 and 2009 is as follows:

Additions Employer contributions Member contributions Participant fees Insurance premiums Net investment income (loss) Other Total additions
Deductions Benefit payments Refunds Death benefits Administrative expenses Total deductions Net increase (decrease) in net assets

Changes in Net Assets (in thousands)

2010

2009

Amount Change

Percentage Change

$

290,459

119,943

853

7,655

1,430,494

292

1,849,696

298,356 123,509
1,376 8,431 (2,111,007)
903 (1,678,432)

(7,897) (3,566)
(523) (776) 3,541,501 (611) 3,528,128

(2.6) % (2.9) (38.0) (9.2) (167.8) (67.7) (210.2)

1,261,079 1,242,927

17,533

17,547

28,459

26,475

21,180

21,044

1,328,251 1,307,993

$

521,445 (2,986,425)

18,152 (14)
1,984 136
20,258 3,507,870

1.5 (0.1) 7.5 0.6 1.5 (117.5) %

Additions The System accumulates resources needed to fund benefit payments through contributions and returns on invested funds. In fiscal year 2010, total contributions decreased 2.7%, reflecting a contribution percentage that remained unchanged along with a decrease in the number of active contributing members and a reduction in contributions receivable. Employer contributions to ERS for a group of local tax commissioners are statutorily paid by the Department of Revenue (DOR) with state appropriations. These DOR contributions were not appropriated and will not be received in fiscal year 2011 and accordingly at June 30, 2010 contributions receivable was reduced $5.7 million. Net investment income increased by $3.5 billion, due to the increase in the bond and equities markets in 2010.
Deductions For fiscal year 2010, total deductions increased 1.5%, primarily because of a 1.5% increase in benefit payments. This was due to an increase of approximately 3% in the number of retirees receiving benefit payments across all defined benefit plans. Refunds decreased 0.1%, which was primarily due to a decrease in the number of refunds processed during 2010. Death benefits increased 7.5%, which was primarily due to an increase in the number of death claims processed during 2010. Administrative expenses increased 0.6% over the prior year, primarily due to increases in the employer portion of health insurance and contractual services.

15

Financial Section
Management's Discussion and Analysis (Unaudited)
Funding Status
The schedules of funding progress and employer contributions provide information regarding how the plans are performing and funded from an actuarial perspective. The information is based upon actuarial valuations conducted by certified actuaries. The funding ratio, which is presented on the schedule of funding progress, indicates the ratio of the actuarial value of assets and the actuarial accrued liabilities. The higher this ratio, the better position the System is in with regards to its funding requirements. The June 30, 2009 and 2008 actuarial valuations, the latest valuations available, indicate the actuarial value of assets and funding ratios for the five applicable defined benefit retirement plans were as follows:

ERS PSERS LRS GJRS GMPF

Actuarial value of plan assets (in thousands)

Funding ratio

June 30, 2009 $ 13,613,606
769,618 30,303
317,624 6,413

June 30, 2008 14,017,346 791,855 30,706 313,315 5,269

June 30, 2009 85.7 % 93.5
128.8 112.4 30.5

June 30, 2008 89.4 %
102.7 125.6 116.7
27.6

In management's opinion, the System continues to operate on an actuarially sound basis, as evidenced by the funding ratios. A funding ratio over 100% indicates the plans, from an actuarial perspective, have more assets available than will be necessary to satisfy the obligations of the plans. GMPF is a relatively new plan that was established in 2002 and is being increasingly funded over time in accordance with contribution amounts recommended by the actuary.

Requests for Infomation
This financial report is designed to provide a general overview of the System's finances for all those with interest in the System's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Employees' Retirement System of Georgia, Two Northside 75, Suite 300, Atlanta, GA 30318.

16

Combined Statement of Net Assets
June 30, 2010 (with comparative totals as of June 30, 2009) (In thousands)
ASSETS
CASH RECEIVABLES:
Employer and member contributions Interest and dividends Due from brokers for securities sold Other
Total receivables
INVESTMENTS - AT FAIR VALUE: Short-term Domestic obligations: U.S. Treasuries U.S. Agencies Corporate and other bonds International obligations: Governments Corporates Common stocks Mutual funds, common collective trust funds, and separate accounts Total investments
CAPITAL ASSETS, NET
Total assets
LIABILITIES Accounts payable and other Due to brokers for securities purchased
Total liabilities
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS
See accompanying notes to financial statements.

Financial Section

2010

$

8,623

2009 6,858

20,521 48,332 11,081
1,276
81,210

27,277 56,471 45,433
1,960
131,141

377,116

235,623

2,673,779 244,955
1,302,714

3,054,228 256,591
1,901,645

195,900 88,327
7,870,484 867,117
13,620,392

-- -- 6,857,211 798,581
13,103,879

6,789

9,791

13,717,014 13,251,669

21,934 16,503
38,437

66,649 27,888
94,537

$ 13,678,577 13,157,132

17

Financial Section
Combined Statement of Changes in Net Assets
Year ended June 30, 2010 (with comparative totals for the year ended June 30, 2009) (In thousands)

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS BEGINNING OF YEAR
ADDITIONS: Contributions: Employer Member Participant fees Insurance premiums Administrative expense allotment
Investment income (loss) Net increase (decrease) in fair value of investments Interest and dividends Other Total investment income (loss)
Less investment expenses Net investment income (loss) Total additions
DEDUCTIONS: Benefit payments Refunds of member contributions and interest Death benefits Administrative expenses
Total deductions Net increase (decrease) in net assets
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS END OF YEAR

2010

2009

$ 13,157,132 16,143,557

290,459 119,943
853 7,655
292

298,356 123,509
1,376 8,431
903

1,084,565 353,775 1,701
1,440,041

(2,526,222) 423,042 1,608
(2,101,572)

(9,547) 1,430,494 1,849,696

(9,435) (2,111,007) (1,678,432)

1,261,079 17,533 28,459 21,180
1,328,251
521,445

1,242,927 17,547 26,475 21,044
1,307,993
(2,986,425)

$ 13,678,577 13,157,132

See accompanying notes to financial statements.

18

19

Assets Cash
Receivables: Employer and member contributions Interest and dividends Due from brokers for securities sold Other Unremitted insurance premiums
Total receivables
Investments - at fair value: Short-term Domestic obligations: U.S. Treasuries U.S. Agencies Corporate and other bonds International obligations: Governments Corporates Common stocks Mutul funds, common collective trust funds, and separate accounts Equity in pooled investment fund
Total investments
Capital assets, net
Total assets
Liabilities
Accounts payable and other Due to brokers for securities purchased Insurance premiums payable Due to participating systems
Total liabilities
Net assets held in trust for pension benefits

Defined Benefit Plans

$

8,135

17,529
883 1,188
19,600

Pooled Investment
Fund
1

Defined Contribition Plans

Georgia Defined Contribution
Plan
441

401(k) Plan
23

457 Plan
23

48,211 11,081


898

1,529

565

120

1











174

219







59,292

1,018

1,704

784

Eliminations
(1,188)
(1,188)




12,696,959
12,696,959 6,789
12,731,483

306,257
2,661,276 230,646
1,302,714
195,900 88,327
7,870,484

12,655,604
12,714,897

70,859
12,503 14,309



97,671
99,130




358,990
358,990
360,717




508,127
508,127
508,934




(12,696,959)
(12,696,959)
(12,698,147)

18,378
1,188

19,566

$

12,711,917

1,435 16,503
12,696,959
12,714,897


573
573
98,557

177
177
360,540

1,371
1,371
507,563

(1,188) (12,696,959)
(12,698,147)


See accompanying notes to financial statements.

Total 8,623
20,521 48,332 11,081
1,276
81,210
377,116
2,673,779 244,955
1,302,714
195,900 88,327
7,870,484
867,117
13,620,392 6,789
13,717,014
21.934 16,503
38,437 13,678,577

Combining Statement of Net Assets
June 30, 2010 (In thousands)

Financial Section

Financial Section
Defined Benefit Plans - Combining Statement of Net Assets
June 30, 2010 (In thousands)
20

Assets
Cash
Receivables: Employer and member contributions Interest and dividends Due from brokers for securities sold Other Unremitted insurance premiums
Total receivables
Investments - at fair value: Short-term Domestic obligations: U.S. Treasuries U.S. Agencies Corporate and other bonds International obligations: Governments Corporates Common stocks Mutul funds, common collective trust funds, and separate accounts Equity in pooled investment fund
Total investments
Capital assets, net
Total assets
Liabilities
Accounts payable and other Due to brokers for securities purchased Insurance premiums payable Due to participating systems
Total liabilities
Net assets held in trust for pension benefits

Employees' Retirement
System

$

7,602

Public School Employees Retirement System
45

Legislative Retirement
System
28

Defined Benefit Plans

Georgia Judicial Retirement System

State Employees' Assurance Department
Active

State Employees' Assurance Department
OPEB

223

87

43

Georgia Military Pension
Fund
86

Superior Court Judges
Retirement Fund
20

District Attorneys Retirement
Fund
1

16,580
882
17,462

2

34

913









































132

1,056

2

34

913

132

1,056























1











1

















































































































































10,942,725

616,219

24,810

270,556

155,913

679,350

6,635

751



10,942,725

616,219

24,810

270,556

155,913

679,350

6,635

751



6,789

















10,974,578

616,266

24,872

271,692

156,132

680,449

6,721

771

2

17,114

933

23

248





25

35





















1,168



3

17





























18,282

933

26

265





25

35



$ 10,956,296

615,333

24,846

271,427

156,132

680,449

6,696

736

2

Defined Benefit Plans Total
8,135
17,529
883 1,188 19,600



12,696,959 12,696,959
6,789 12,731,483
18,378
1,188
19,566 12,711,917

See accompanying notes to financial statements.

Combining Statement of Changes in Net Assets
Year Ended June 30, 2010 (In thousands)

Net assets held in trust for pension benefits - beginning of year
Additions: Contributions Employer Member Participant fees Insurance premiums Administrative expense allotment

Defined Benefit Plans
$ 12,274,161
274,795 48,871 7,655 292

Defined Contribution Plans

Georgia

Pooled

Defined

Investment Contribution

401(k)

457

Fund

Plan

Plan

Plan



83,968

309,756

489,247





15,664





16,002

33,899

21,171





385

468

















Investments income (loss): Net increase (decrease) in fair value of investments Interest and dividends Other Less investment expenses Allocation of investment income
Net investment income
Total additions

(1,343) 1,360,429
1,359,086
1,690,699

1,023,038 352,912 (6,003)
(1,369,947)



32 818
(49) 9,518
10,319
26,321

25,485 31
707 (940)

25,283
75,231

36,010 14
994 (1,212)

35,806
57,445

Deductions: Benefit payment Refunds of member contributions and interest Death benefits Administrative expenses
Total deductions
Net increase (decrease) in net assets
Net assets held in trust for pension benefits - end of year

1,200,438 6,920
28,459 17,126 1,252,943
437,756
$ 12,711,917



9

23,618

37,014



10,613















1,110

829

2,115



11,732

24,447

39,129



14,589

50,784

18,316



98,557

360,540

507,563

Total
13,157,132
290,459 119,943
853 7,655
292
1,084,565 353,775 1,701 (9,547)
1,430,494 1,849,696
1,261,079 17,533 28,459 21,180
1,328,251 521,445
13,678,577

Financial Section

See accompanying notes to financial statements.

21

Financial Section
Defined Benefit Plans - Combining Statement of Changes in Net Assets
Year Ended June 30, 2010 (In thousands)
22

Net assets held in trust for pension benefits - beginning of year
Additions: Contributions Employer Member Participant fees Insurance premiums Administrative expense allotment
Investment income (loss): Net increase (decrease) in fair value of investments Interest and dividends Other Less investment expenses Allocation of investment income
Net investment income
Total additions

Employees' Retirement
System

Public School Employees Retirement System

Legislative Retirement
System

Defined Benefit Plans

Georgia Judicial Retirement System

State Employees' Assurance Department
Active

State Employees' Assurance Department
OPEB

$ 10,626,096

597,318

23,644

248,261

144,161

628,199

Georgia Military Pension
Fund

Superior Court Judges
Retirement Fund

District Attorneys Retirement
Fund

5,229

1,251

2

263,064

5,530

75

3,369





1,434

1,243

80

42,052

1,483

318

5,018





































900

6,755











110

175







6

1























































(1,343)

















1,178,084

66,404

2,610

27,378

15,910

69,340

565

138



1,176,741

66,404

2,610

27,378

15,910

69,340

565

138



1,481,857

73,417

3,113

35,940

16,810

76,095

1,999

1,387

81

Deductions: Benefit payments Refunds of member contributions and interest Death benefits Administrative expenses
Total deductions

1,130,669

53,195

1,744

12,365





489

1,896

80

6,483

251

47







14,505

1,956

120

139







4,817

23,642

270

22

203













43

6

1

1,151,657

55,402

1,911

12,774

4,839

23,845

532

1,902

81

Net increase (decrease) in net assets

330,200

18,015

1,202

23,166

11,971

52,250

1,467

(515)



Net assets held in trust for pension

benefits - end of year

$ 10,956,296

615,333

24,846

271,427

156,132

680,449

6,696

736

2

See accompanying notes to financial statements.

Defined Benefit Plans Total
12,274,161
274,795 48,871 7,655 292
(1,343) 1,360,429 1,359,086 1,690,699
1,200,438
6,920 28,459 17,126 1,252,943 437,756
12,711,917

Financial Section

Notes to Financial Statements
June 30, 2010 (1) General

The accompanying basic financial statements of the Employees' Retirement System of Georgia, including all plans and funds administered by the Employees' Retirement System of Georgia (collectively, the System), is comprised of the Employees' Retirement System of Georgia (ERS), Public School Employees Retirement System (PSERS), Legislative Retirement System (LRS), Georgia Judicial Retirement System (GJRS), Georgia Military Pension Fund (GMPF), State Employees' Assurance Department Active Members Trust Fund (SEAD-Active), State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund (SEAD-OPEB), Superior Court Judges Retirement Fund (SCJRF), District Attorneys Retirement Fund (DARF), Georgia Defined Contribution Plan (GDCP), 401(k) Deferred Compensation Plan (401(k) Plan), and the 457 Deferred Compensation Plan (457 Plan). All significant accounts and transactions among the various systems, departments, and funds have been eliminated.
In evaluating how to define the System for financial reporting purposes, the management of the System has considered all potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth by Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units. Based on these criteria, the System has not included any other entities in its reporting entity.
Although the System is a component unit of the State of Georgia's financial reporting entity, it is accountable for its own fiscal matters and presentation of its separate financial statements. The Board of Trustees, comprised of active and retired members, ex-officio state employees, and appointees by the Governor, are ultimately responsible for the administration of the System.

(2) Authorizing Legislation and Plan Descriptions

Each plan and fund, including benefit and contribution provisions, was established and can be amended by state law. The following summarizes authorizing legislation and the plan description of each retirement fund:
(a) ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation.

Membership As of June 30, 2010, participation in ERS is as follows:
Retirees and beneficiaries currently receiving benefits Terminated employees entitled to benefits but not yet receiving benefits Active plan members
Total
Employers

38,518 68,290 68,567
175,375
741

Benefits Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon state employment that started prior to July 1, 1982 is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are "new plan" members, subject to the modified plan provisions. Effective January 1, 2009, newly hired state employees, as well as rehired state employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to the GSEPS plan.

23

Financial Section

Notes to Financial Statements
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.

Contributions and Vesting Member contributions under the old plan are 4% of annual compensation, up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The state is required to contribute at a specified percentage of active member payrolls, determined annually by actuarial valuation. The state contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2010 were based on the June 30, 2007 actuarial valuation for the old plan and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:

Employer: Normal Employer paid for member Accrued liability
Total

Old plan
2.08 % 4.75 3.58 10.41 %

New plan
6.83 %
3.58 10.41 %

GSEPS
2.96 % --
3.58 6.54 %

Members become vested after ten years of membership service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits.

The employer contributions are projected to liquidate the unfunded actuarial accrued liability within 30 years, based upon the actuarial valuation at June 30, 2009, on the assumption that the total payroll of active members will increase by 3.75% each year.

On November 20, 1997, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan of ERS (SRBP). SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC 415) as a portion of ERS. The purpose of the SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.

Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in this plan whenever their benefits under ERS exceed the limitation on benefits imposed by IRC 415.

There were 124 members eligible to participate in this portion of ERS for the year ended June 30, 2010. Employer contributions of $1,870,000 and benefit payments of $1,866,177 under the SRBP are included in the combined statements of changes in net assets for the year ended June 30, 2010. Cash of $12,750 under the SRBP is included in the combined statements of net assets as of June 30, 2010.

24

Financial Section

Notes to Financial Statements

(b) PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS.

Membership As of June 30, 2010, participation in PSERS is as follows:

Retirees and beneficiaries currently receiving benefits Terminated employees entitled to benefits but not yet receiving benefits Active plan members
Total
Employers

13,995 68,951 39,962
122,908
195

Benefits A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS makes periodic cost-ofliving adjustments to the monthly benefits.
Contributions and Vesting Members contribute $4 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees.
Employer contributions required for the year ended June 30, 2010 were $141.46 per active member and were based on the June 30, 2007 actuarial valuation.
Members become vested after ten years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.

(c) LRS is a cost-sharing multiple-employer defined benefit plan established by the Georgia General Assembly in 1979 for the purpose of providing retirement allowances for all members of the Georgia General Assembly. LRS is administered by the ERS Board of Trustees.

Membership As of June 30, 2010, participation in LRS is as follows:

Retirees and beneficiaries currently receiving benefits

235

Terminated employees entitled to benefits but not yet receiving benefits

124

Active plan members

216

Total

575

Employers

1

25

Financial Section

Notes to Financial Statements
Benefits A member's normal retirement is after eight years of creditable service and attainment of age 65, or eight years of membership service (four legislative terms) and attainment of age 62. A member may retire early and elect to receive a monthly retirement benefit after completion of eight years of membership service and attainment of age 60; however, the retirement benefit is reduced by 5% for each year the member is under age 62.
Upon retirement, the member will receive a monthly service retirement allowance of $36, multiplied by the number of years of creditable service, reduced by age reduction factors, if applicable. Death benefits are also available through the plan.
Contributions and Vesting Member contributions are 8.5% of annual salary. The state pays member contributions in excess of 4.75% of annual compensation. Employer contributions are actuarially determined and approved and certified by the ERS Board of Trustees.
There were no employer contributions required for the year ended June 30, 2010 based on the June 30, 2007 actuarial valuation.
Members become vested after eight years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member.
However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits.

(d) The GJRS is a system created to serve the members and beneficiaries of the Trial Judges and Solicitors Retirement Fund, the Superior Court Judges Retirement System, and the District Attorneys Retirement System (collectively, the Predecessor Retirement Systems). As of June 30, 1998, any person who was an active, inactive, or retired member or beneficiary of the Predecessor Retirement Systems was transferred to GJRS in the same status effective July 1, 1998. All assets of the Predecessor Retirement Systems were transferred to GJRS as of July 1, 1998. The ERS Board of Trustees and three additional trustees administer GJRS.

GJRS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly for the purpose of providing retirement allowances for judges and solicitors generals of the state courts and juvenile court judges in Georgia, and their survivors and other beneficiaries, superior court judges of the state of Georgia, and district attorneys of the state of Georgia.

Membership As of June 30, 2010, participation in GJRS is as follows:

Retirees and beneficiaries currently receiving benefits

206

Terminated employees entitled to benefits but not yet receiving benefits

55

Active plan members

495

Total

756

Employers

96

Benefits The normal retirement for GJRS is age 60, with 16 years of creditable service; however, a member may retire at age 60 with a minimum of 10 years of creditable service.

Annual retirement benefits paid to members are computed as 66.66% of state paid salary at retirement for district attorneys and superior court judges and 66.66% of the average over 24 consecutive months for trial judges and solicitors, plus 1% for each year of credited service over 16 years, not to exceed 24 years. Early retirement benefits paid to members are computed as the pro rata portion of the normal retirement benefit, based on service not to exceed 16 years. Death, disability, and spousal benefits are also available.

26

Financial Section

Notes to Financial Statements

Contributions and Vesting

Members are required to contribute 7.5% of their annual salary plus an additional 2.5% of their annual salary if spousal benefit is elected. Employer contributions are actuarially determined and approved and certified by the GJRS Board of Trustees.

Employer contributions required for fiscal year 2010 were based on the June 30, 2007 actuarial valuation as follows:

Employer: Normal Accrued liability
Total

12.05 % (8.20)
3.85 %

Members become vested after ten years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits.
The employer contributions are projected to liquidate the actuarial accrued funding excess within 10 years, based upon the actuarial valuation at June 30, 2009, assuming that the amount of accrued liability payment increases 3.75% each year.

(e) The GMPF is a single-employer defined benefit pension plan established on July 1, 2002 by the Georgia General Assembly for the purpose of providing retirement allowances and other benefits for members of the Georgia National Guard (National Guard). The ERS Board of Trustees administers the GMPF.
Membership As of June 30, 2010, GMPF had 480 retirees and beneficiaries currently receiving benefits. Active and inactive plan member information is maintained by one employer, the Georgia Department of Defense.
Benefits A member becomes eligible for benefits upon attainment of age 60, with 20 or more years of creditable service (including at least 15 years of service as a member of the National Guard), having served at least 10 consecutive years as a member of the National Guard immediately prior to discharge, and having received an honorable discharge from the National Guard.
The retirement allowance is payable for life in the amount of $50 per month, plus $5 per month for each year of creditable service in excess of 20 years. The maximum benefit is $100 per month.
Contributions and Vesting Employer contributions are actuarially determined and approved and certified by the ERS Board of Trustees. There are no member contributions required.
Employer contributions required for the year ended June 30, 2010 were $119.30 per active member and were based on the June 30, 2007 actuarial valuation.

A member becomes vested after 20 years of creditable service (including at least 15 years of service as a member of the National Guard), having served at least 10 consecutive years as a member of the National Guard immediately prior to discharge, and having received an honorable discharge from the National Guard.
The employer contributions are projected to liquidate the unfunded actuarial accrued liability within 20 years, based upon the actuarial valuation at June 30, 2009.

27

Financial Section
Notes to Financial Statements
(f) SEAD-Active was created in 2007 by the Georgia General Assembly to amend Title 47 of the Official Code of Georgia Annotated, relating to retirement, so as to establish a fund for the provision of term life insurance to active members of ERS, LRS, GJRS, and SCJRF. Effective January 1, 2009, members of ERS under the GSEPS plan are not eligible for term life insurance. The SEAD-Active trust fund accumulates in the fund the premiums received from the aforementioned retirement systems, including interest earned on deposits and investments of such payments from active members.
Employee contribution rates of 0.05% and 0.02% of members' salaries for old plan members and new plan members, respectively, were appropriated for the fiscal year ending June 30, 2010. There were no employer contribution rates required for the fiscal year ended June 30, 2010. Old plan members were hired prior to July 1, 1982, and new plan members were hired on or after July 1, 1982, but prior to January 1, 2009.
According to the policy terms covering the lives of members, insurance coverage is provided on a monthly, renewable term basis, and no return premiums or cash value are earned. The net assets represent the excess accumulation of investment income and premiums over benefit payments and expenses and are held as a reserve for payment of death benefits under existing policies.
(g) SEAD-OPEB was created in 2007 by the Georgia General Assembly to amend Title 47 of the Official Code of Georgia Annotated, relating to retirement, so as to establish a fund for the provision of term life insurance to retired and vested inactive members of ERS, LRS, GJRS, and SCJRF. The SEAD-OPEB trust fund accumulates in the fund the premiums received from the aforementioned retirement systems, including interest earned on deposits and investments of such payments from retired and vested inactive members.
Employee contribution rates of 0.45% and 0.23% of members' salaries for old plan members and new plan members, respectively, were appropriated for the fiscal year ending June 30, 2010. There were no employer contribution rates required for the fiscal year ended June 30, 2010. Old plan members were hired prior to July 1, 1982, and new plan members were hired on or after July 1, 1982.
According to the policy terms covering the lives of members, insurance coverage is provided on a monthly, renewable term basis, and no return premiums or cash value are earned. The net assets represent the excess accumulation of investment income and premiums over benefit payments and expenses and are held as a reserve for payment of death benefits under existing policies.
(h) SCJRF is a single-employer defined benefit pension plan established by the Georgia General Assembly in 1945 for the purpose of providing retirement benefits to the superior court judges of the state of Georgia. SCJRF is directed by its own Board of Trustees. The Boards of Trustees for ERS and SCJRF entered into a contract for ERS to administer the plan effective July 1, 1995.
Membership As of June 30, 2010, SCJRF had 27 retirees and beneficiaries currently receiving benefits and no active members. No new members are allowed into SCJRF.
Benefits
The normal retirement for SCJRF is age 68, with 19 years of creditable service, with a benefit of two-thirds the salary paid to superior court judges. A member may also retire at age 65, with a minimum of 10 years of creditable service, with a benefit of one-half the salary paid to superior court judges. Death, disability, and spousal benefits are also available.
Contributions and Vesting Employer contributions are not actuarially determined, but are provided on an as-needed basis to fund current benefits.
28

Financial Section

Notes to Financial Statements
(i) DARF is a defined benefit pension plan established by theGeorgiaGeneralAssembly in 1949 for the purpose of providing retirement benefits to the district attorneys of the state of Georgia. DARF is directed by its own Board of Trustees. The Boards of Trustees for ERS and DARF entered into a contract for ERS to administer the plan effective July 1, 1995.
Membership As of June 30, 2010, DARF had 7 retirees and beneficiaries currently receiving benefits and no active members. No new members are allowed into DARF.
Benefits Persons appointed as district attorney emeritus shall receive an annual benefit of $15,000, or one-half of the state salary received by such person as a district attorney for the calendar year immediately prior to the person's retirement, whichever is greater.
Contributions and Vesting Employer contributions are not actuarially determined, but are provided on an as-needed basis to fund current benefits.

(j) GDCP is a defined contribution plan established by the Georgia General Assembly in July 1992 for the purpose of providing retirement allowances for state employees who are not members of a public retirement or pension system and do not participate in Social Security. GDCP is administered by the ERS Board of Trustees.

Membership As of June 30, 2010, participation in GDCP is as follows:

Retirees and beneficiaries currently receiving benefits Terminated employees entitled to benefits but not yet receiving benefits Active plan members
Total
Employers

1 100,516
16,502
117,019
378

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payments will be based upon mortality tables and interest assumptions adopted by the ERS Board of Trustees. If a terminated member has less than $5,000 credited to his/her account, the ERS Board of Trustees has the option of requiring a lump-sum distribution to the member. Upon the death of a member, a lump-sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.

Contributions Members are required to contribute 7.5% of their annual salary. There are no employer contributions. Earnings will be credited to each member's account as adopted by the ERS Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.

(k) The 401(k) Plan was established by the State of Georgia Employee Benefit Plan Council (the Council) in accordance with Georgia Law 1985, as amended, Official Code of Georgia, Sections 45-18-50 through 45-18-58, and Section 401(k) of the Internal Revenue Code (IRC). On October 1, 1994, activity commenced when the 401(k) Plan became available to employees of the State of Georgia Community Service Boards (CSBs). On December 1, 1998, the 401(k) Plan became available to employees of the Georgia Lottery Corporation (GLC). On July 1, 2005, the Plan became available to employees of Fayette County Board of Education; on July 1, 2006, the Plan became available to employees of Walton County Board of Education; and on January 1, 2010 the Plan became available to employees of Henry County Board of Education.

29

Financial Section

Notes to Financial Statements

Effective July 1, 1998, the State of Georgia Employee's Deferred Compensation Group Trust (Master Trust) was formed for the State of Georgia Deferred Compensation Program to serve as the funding medium for the 401(k) Plan. At that time, the 401(k) Plan began operating on an employee elective deferral basis for all state employees working at least 1,000 hours in a 12-month period. All assets of the 401(k) Plan are held in trust for the exclusive benefit of the participants and their beneficiaries. The assets of the 401(k) Plan and the State of Georgia Employees' Deferred Compensation 457 Plan are commingled in the Master Trust with the respective trusts owning units of the Master Trust. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.

Effective July 1, 2005 (HB275), ERS became the trustee of the 401(k) Plan. ING LLC and State Street Bank and Trust Company hold, administer, and invest the assets of the Master Trust.

Contributions and Vesting Participating CSBs, the GLC and Walton and Henry County Boards of Education offer employer contributions to eligible employees of up to 7.5% of base salary (limited to a maximum of $245,000 base salary for 2009 and 2010) as either a contribution matching employee elective contributions or an automatic contribution regardless of employee participation. As of January 1, 2009 individual participants may defer up to 80% of eligible compensation, or up to limits prescribed by the IRC (whichever is less).

Effective January 1, 2009, in accordance with O.C.G.A. 47-2-350 through 47-2-360, newly hired state employees, as well as rehired state employees who did not maintain eligibility for the ERS "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). The GSEPS plan includes automatic enrollment in the 401(k) plan at a contribution rate of 1% of salary, along with a matching contribution from the state. The state will match 100% of the employee's initial 1% contribution. Employees can elect to contribute up to an additional 4% and the state will match 50% of the additional 4% of salary. Therefore, the state will match 3% against the employee's 5% total savings. Contributions greater than 5% do not receive any matching funds. Employees who are not participants of the GLC, CSB, or GSEPS plans do not receive any employer contributions in their 401(k) plan.

All employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all state service. Vesting is determined based on the following schedule:

Less than 1 year 1 2 3 4 5 or more years

--% 20 40 60 80 100

For CSB/GLC participants whose services terminated prior to January 1, 2010 but after December 31, 2001, the following vesting schedule applies:

Less than 2 years 2 3 4 5 6 or more years

--% 20 40 60 80 100

For CSB/GLC participants whose services terminated prior to January 1, 2002, the following vesting schedule applies:

Less than 3 years 3 4 5 6 7 or more years

--% 20 40 60 80 100

30

Financial Section
Notes to Financial Statements
Employee contributions and earnings thereon are 100% vested at all times. The 401(k) Plan also allows participants to roll over amounts from other qualified plans to their respective account in the 401(k) Plan on approval by the 401(k) Plan Administrator. Such rollovers are 100% vested at the time of transfer.
Distributions The participant may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or retirement or other termination of service (employer contribution balances are only eligible for distribution upon separation from service). Upon the death of a participant, his or her beneficiary shall be entitled to the vested value of his or her accounts. Distributions are made in installments or in a lump sum.
(l) The 457 Plan was established by the State Personnel Board in accordance with Georgia laws 1974, page 198 as amended, Official Code of Georgia, Sections 45-18-30 through 45-18-36, and Section 457 of the Internal Revenue Code (IRC). The 457 Plan is available to employees of the State of Georgia and county health departments and permits such employees to defer a portion of their annual salary until future years. Employee contributions and earnings thereon are 100% vested at all times.
Effective July 1, 1998, the State of Georgia Employee's Deferred Compensation Group Trust (Master Trust) was formed for the State of Georgia Deferred Compensation Program to serve as the funding medium for the 457 Plan. All assets of the 457 Plan are held in trust for the exclusive benefit of the participants and their beneficiaries. The assets of the 457 Plan and the State of Georgia Employees' Deferred Compensation 401(k) Plan are commingled in the Master Trust with the respective trusts owning units of the Master Trust. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.
Effective July 1, 2005 (HB275), ERS became the trustee of the 457 Plan. ING LLC and State Street Bank and Trust Company hold, administer, and invest the assets of the Master Trust.
Distributions The balance in the employee's account in the 457 Plan is not available to the employee until termination, retirement, death, or unforeseeable emergency as defined in the 457 Plan.
(3) Significant Accounting Policies and System Asset Matters
(a) Basis of Accounting
The System's basic financial statements are prepared on the accrual basis of accounting. Contributions from the employers and members are recognized as additions in the period in which the members provide services. Retirement benefits and refund payments are recognized as deductions when due and payable.
(b) Investments
Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price. Investment income is recognized as earned by the System. There are no investments in, loans to, or leases with parties related to the System.
The System utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
31

Financial Section
Notes to Financial Statements
(c) Capital Assets Capital assets, including software development costs, are stated at cost less accumulated depreciation. The capitalization thresholds are $100,000 for buildings and building improvements and $5,000 for equipment and vehicles. Depreciation on capital assets is computed using the straight-line method over estimated useful lives of five to forty years. Depreciation expense is included in administrative expenses. Maintenance and repairs are charged to administrative expenses when incurred. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the statements of changes in net assets in the period of disposal.
(d) Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets and changes therein. Actual results could differ from those estimates.
(4) Investment Program
The System maintains sufficient cash to meet its immediate liquidity needs. Cash not immediately needed is invested in either short-term or long-term investment securities as directed by the Board of Trustees. All investments are held by agent custodial banks in the name of the System.
Cash Cash balances are fully insured through the Federal Deposit Insurance Corporation, an agency of the U.S. Government. Fiduciary accounts, such as those of the System, are granted $250,000 of insurance coverage per participant in the System. Temporary cash on hand not committed for a specific purpose is invested overnight.
Investments State statutes and the System's investment policy authorize the System to invest in a variety of short-term and long-term securities as follows:
(a) Short-Term Short-term investments are authorized in the following instruments: Repurchase and reverse repurchase agreements, whereby the System and a broker exchange cash for direct obligations of the U.S. Government or obligations unconditionally guaranteed by agencies of the U.S. Government or U.S. corporations. The System or broker promises to repay the cash received, plus interest, at a specific date in the future in exchange for the same securities. The System held repurchase agreements of $377,116,000 at June 30, 2010.
U.S. Treasury obligations. Other short-term securities authorized, but not currently used, are as follows: Commercial paper, with a maturity of 180 days or less. Commercial paper is an unsecured promissory note issued
primarily by corporations for a specific amount and maturing on a specific day.The System considers for investment only commercial paper of the highest quality, rated P-1 and/or A-1 by national credit rating agencies.
Master notes, an overnight security administered by a custodian bank and an obligation of a corporation whose commercial paper is rated P-1 and/or A-1 by national credit rating agencies.
Investments in commercial paper or master notes are limited to no more than $500 million in any one name.
32

Financial Section

Notes to Financial Statements

(b) Long-Term

Fixed income investments are authorized in the following instruments:
U.S. and foreign government obligations. At June 30, 2010, the System held U.S. Treasury bonds of $2,673,778,920 and international government bonds of $195,899,890.

Obligations unconditionally guaranteed by agencies of the U.S. Government. At June 30, 2010, the System held agency bonds of $244,955,380.

Corporate bonds with at least an "A" rating by a national rating agency. At June 30, 2010, the System held U.S. corporate bonds of $1,302,714,400 and international corporate bonds of $88,326,750.

Private placements are authorized under the same general restrictions applicable to corporate bonds.
Mortgage investments are authorized to the extent that they are secured by first mortgages on improved real property located in the state of Georgia.

Equity securities are also authorized (in statutes) for investment as a complement to the System's fixed-income portfolio and as a long-term inflation hedge. By statute, no more than 65% of the total invested assets on a historical cost basis may be placed in equities. Equity holdings in any one corporation may not exceed 5% of the outstanding equity of the issuing corporation. The equity portfolio is managed by the Division of Investment Services (the Division), in conjunction with independent advisors. Buy/sell decisions are based on securities meeting rating criteria established by the Board of Trustees, in-house research considering such things as yield, growth, and sales statistics, and analysis of independent market research. Equity trades are approved and executed by the Division's staff. Common stocks eligible for investment are approved by the Investment Committee of the Board of Trustees before being placed on an approved list. The System held common stocks totaling $7,870,483,513 at June 30, 2010.

The State of Georgia Employee's Deferred Compensation Group Trust (Master Trust) invests in various mutual funds, common collective trust funds, and separate accounts, as selected by participants. Each participant is allowed to select and invest contributions into 3 mutual funds, 7 common collective trust funds, and 4 separate accounts, as authorized by the Board of Trustees. Mutual funds, common collective trust funds, and separate accounts are reported at the fair value of participant balances.

Substantially all of the investments of ERS, PSERS, LRS, SCJRF, GJRS, GMPF, and SEAD are pooled into one common investment fund. Units in the pooled common investment fund are allocated to the respective plans, based upon the cost of assets contributed, and additional units are allocated to the participating plans, based on the market value of the pooled common investment fund at the date of contribution. Net income of the pooled common investment fund is allocated monthly to the participating plans, based upon the number of units outstanding during the month.

The units and fair value of each plan's equity in the pooled common investment fund at June 30, 2010 were as follows (dollars in thousands):

Employees' Retirement System Public School Employees Retirement System Legislative Retirement System Georgia Judicial Retirement System State Employees' Assurance Department - Active State Employees' Assurance Department - OPEB Georgia Military Pension Fund Superior Court Judges Retirement Fund

Fair value $ 10,942,725
616,219 24,810
270,556 155,913 679,350
6,635 751
$ 12,696,959

Units
4,712,638 265,383 10,685 116,519 67,146 292,572 2,857 323
5,468,123

Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the Employees' Retirement System. State law limits investments to investment grade securities.

33

Financial Section

Notes to Financial Statements
It is the System's investment policy to require that the bond portfolio be of high quality and chosen with respect to maturity ranges, coupon levels, refunding characteristics and marketability. The System's policy is to require that new purchases of bonds be restricted to high grade bonds rated no lower than "A" by any nationally recognized statistical rating organization. The quality ratings of investments in fixed income securities as described by Standard & Poor's and by Moody's Investors Service, which are nationally recognized statistical rating organizations, at June 30, 2010 is shown in the following chart.
Quality Ratings of Fixed Income Investments Held at June 30, 2010

Investment Type Domestic obligations:
U.S. Treasuries U.S. Agencies Corporates
Total Corporates International obligations:
Governments
Total Governments Corporates
Total Fixed Income Investments

Standard & Poor's/ Moody's
Quality Rating

June 30,2010 Fair Value

AAA/Aaa AAA/Aaa
AA/Aa AA/A A/A
AAA/Aaa AA/Aa
AA/Aaa

$ 2,673,778,920 244,955,380 63,056,880 846,828,750 282,956,070 109,872,700
1,302,714,400
95,426,370 100,473,520 195,899,890
88,326,750
$ 4,505,675,340

The investment policy requires that repurchase agreements be limited to the purchase of U.S. Treasury or Agency obligations or corporate bonds rated no lower than "A" by any nationally recognized statistical rating organization with a market value in excess of funds advanced. As of June 30, 2010, the System held repurchase agreements of $377,116,000.
Mutual funds, common collective trust funds, and separate accounts investments of the deferred compensation plans are not considered to have credit risk and do not require disclosure of credit risk rating.
Concentration of Credit Risk. Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issue. On June 30, 2010, the System did not have debt or equity investments in any one organization, other than those issued or guaranteed by the U. S. Government or its agencies, which represented greater than 5% of plan net assets.
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. While the System has no formal interest rate risk policy, active management of the bond portfolio incorporates interest rate risk to generate improved returns. This risk is managed within the portfolio using the effective duration method. This method is widely used in the management of fixed income portfolios and quantifies to a much greater degree the sensitivity to interest rate changes when analyzing a bond portfolio with call options, prepayment provisions, and any other cash flows. Effective duration makes assumptions regarding the most likely timing and amounts of variable cash flows and is best utilized to gauge the effect of a change in interest rates on the fair value of a portfolio. It is believed that the reporting of effective duration found in the following table quantifies to the fullest extent possible the interest rate risk of the System's fixed income assets.

34

Financial Section

Notes to Financial Statements

Effective Duration of Fixed Income Assets and Repurchase Agreements by Security Type

Fixed Income and Repurchase Agreements Security Type
Domestic obligations: U.S. Treasuries U.S. Agencies Corporates
International Obligations: Governments Corporates
Repurchase Agreements
Total

Market Value June 30, 2010
$ 2,673,778,920 244,955,380
1,302,714,400
195,889,890 88,326,750 377,116,000
$ 4,882,791,340

Percent of All Fixed Income Assets and Repurchase Agreements
54.8 % 5.0
26.7
4.0 1.8 7.7
100.0 %

Effective Duration (Years)
6.0 2.0 4.3
4.3 3.0 --*
4.8*

*Total Effective Duration (Years) does not include Repurchase Agreements
Mutual funds, common collective trust funds, and separate investments of the deferred compensation plans are not considered to have interest rate risk and do not require disclosure of interest rate risk.

(5) Investment Lending Program
State statutes and Board of Trustees policies permit the System to lend its securities to broker-dealers with a simultaneous agreement to return the collateral for the same securities in the future. The System is presently involved in a securities lending program with major brokerage firms. The System lends equity and fixed income securities for varying terms and receives a fee based on the loaned securities' value.
During a loan, the System continues to receive dividends and interest as the owner of the loaned securities. The brokerage firms pledge collateral securities consisting of U.S. Government and agency securities, mortgage-backed securities issued by a U.S. Government agency, and corporate bonds. The collateral value must be equal to at least 102% to 115% of the loaned securities' value, depending on the type of collateral security.
Securities loaned totaled $3,537,760,045 at fair value at June 30, 2010. The collateral value was equal to 105.7% of the loaned securities' value at June 30, 2010. The System's lending collateral was held in the System's name by the tri-party custodian.
Loaned securities are included in the accompanying combined statement of net assets since the System maintains ownership. The related collateral securities are not recorded as assets on the System's combined statements of net assets, and a corresponding liability is not recorded, since the System is deemed not to have the ability to pledge or trade the collateral securities. The System is deemed not to have the ability to pledge or sell the collateral securities, since the System's lending contracts do not address whether the lender can pledge or sell the collateral securities without a borrower default, the System has not previously demonstrated that ability, and there are no indications of the System's ability to pledge or sell the collateral securities.
(6) Operating Leases
The System leases copier machines and mailing equipment under long-term, noncancelable operating lease agreements. The leases expire at various dates through 2013 and provide for renewal options ranging from one year to five years. Lease expense totaled $22,228 during 2010. The following is a schedule by years of future minimum rental payments required under operating leases in excess of one year as of June 30, 2010.

35

Financial Section
Notes to Financial Statements
Fiscal Year ending June 30: 2011 2012 2013 2014 2015 Total minimum payments required

$ 12,100 8,573 1,267 -- --
$ 21,940

(7) Capital Assets

The following is a summary of capital assets and depreciation information as of and for the year ended June 30, 2010:

Capital assets: Land Building Equipment Vehicles Computer software

Balance at

Balance at

June 30, 2009 Additions Disposals June 30, 2010

$ 944,225 2,800,000 1,363,979 13,381
14,344,610
19,466,195

152,116
152,116



944,225



2,800,000



1,516,095



13,381



14,344,610



19,618,311

Accumulated depreciation for: Building Equipment Vehicles Computer software

(350,000) (745,108)
(4,633) (8,575,953)
(9,675,694)

Capital assets, net

$ 9,790,501

(70,000) (212,959)
(1,911) (2,868,921)
(3,153,791)
(3,001,675)



(420,000)



(958,067)



(6,544)



(11,444,874)



(12,829,485)



6,788,826

During fiscal year 2010, the System did not experience any capital asset impairment loss with respect to the provisions of GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries.

(8) Commitments and Contingencies
Employees' Retirement System of Georgia In January 2007, multiple retirees filed a civil action in Fulton County Superior Court against the Employees' Retirement System of Georgia (ERS) seeking additional benefits retroactive to the time of their retirement dates for a class of those retirees who elected survivorship options and who retired during the preceding twenty-year period. Plaintiffs alleged that ERS did not use updated mortality tables in the calculation of their benefits. These claims were identical to those brought against the Teachers Retirement System of Georgia (TRS) under class action, by the same attorneys, in 2004. On February 19, 2009, the Court of Appeals issued a final ruling against TRS in favor of the plaintiffs and also denied the parties' motions for reconsideration. Because of this final decision against TRS, ERS has conceded liability on the breach of contract claim.
At June 30, 2009 management estimated a liability of approximately $43 million based on the final judgment and estimated final payments. At June 30, 2010, there is no remaining liability related to this action.
The System is subject to legal actions in the ordinary course of its business. In the opinion of management, the System has adequate legal defenses with respect to such actions and their final outcome will not have a material adverse effect upon the financial status of the System.

36

Financial Section

Notes to Financial Statements
Public School Employees Retirement System On August 7, 2008, multiple retirees filed a civil action in Fulton County Superior Court against Public School Employees Retirement (PSERS) seeking additional benefits retroactive to the time of their retirement dates for a class of those retirees who elected survivorship options and who retired during the preceding twenty-year period. The case asserts the same claims as were asserted against the TRS and ERS above. Because of the final decision against TRS, PSERS has conceded liability on the breach of contract claim.
At June 30, 2009, management estimated a liability of approximately $856,000 related to retroactive benefits and related attorneys' fees. At June 30, 2010 there is no remaining liability related to this action.

(9) Funded Status and Funding Progress

The funded status of each plan as of June 30, 2009, the most recent actuarial valuation date, is as follows (dollar amounts in thousands):

Actuarial value of plan
assets (a)

Actuarial accrued liability (AAL) entry age
(b)

Unfunded AAL/(funding
excess) (b-a)

Funding ratio (a/b)

Annual covered payroll
(c)

Unfunded AAL/(funding excess) as percentage of covered payroll
[(b-a)/c]

ERS PSERS LRS GJRS GMPF

$ 13,613,606 769,618 30,303 317,624 6,413

15,878,022 823,232 23,523 282,474 21,021

2,264,416 53,614 (6,780) (35,150) 14,608

85.7 %
93.5 128.8 112.4
30.5

$ 2,674,155 N/A
3,780 52,083
N/A

84.7 %
N/A
(179.4)
(67.5)
N/A

1 No statistics regarding covered payroll are available. Contributions are not based upon members' salaries, but are simply $4.00 per member per month for nine months each fiscal year.

2 No statistics regarding covered payroll are available. Active and inactive plan member information is maintained by the Georgia Department of Defense.

The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multi-year trend information about whether the actuarial values of plans assets are increasing or decreasing over time relative to the AALs for benefits.

37

Financial Section

Notes to Financial Statements

Additional information as of the latest actuarial valuation follows:

Valuation date Actuarial cost method Amortization method
Remaining amortization period Asset valuation method
Actuarial assumptions Investment rate of return Projected salary increases
Postretirement cost-of-living adjustment

ERS
June 30, 2009 Entry age Level percent of pay, open 30 years 7-year smoothed market

PSERS
June 30, 2009 Entry age Level dollar, open 30 years 7-year smoothed market

LRS
June 30, 2009 Entry age Level dollar, open N/A 7-year smoothed market

7.50% 5.45-9.25% None

7.50% N/A 3.00% annually

7.50% N/A 3.00% annually

Valuation date Actuarial cost method Amortization method
Remaining amortization period Asset valuation method
Actuarial assumptions Investment rate of return Projected salary increases
Postretirement cost-of-living adjustment
1 Includes inflation rate of 3.75% in 2010.

GJRS June 30, 2009 Entry age Level percent of pay, open
10 years 7-year smoothed market

GMPF June 30, 2009 Entry age Level dollar, open
20 years 7-year smoothed market

7.50% 6.00% None

7.50% N/A None

38

Required Supplementary Schedules (UNAUDITED)
Schedules of Funding Progress
(In thousands)

Employees' Retirement System

Actuarial valuation
date
6/30/2004 6/30/2005 6/30/2006 6/30/2007 6/30/2008 6/30/2009

Actuarial value of plan assets
(a)
$ 12,797,389 13,134,472 13,461,132 13,843,689 14,017,346 13,613,606

Actuarial accrued liablility (AAL) entry age (b)
13,106,648 13,512,773 14,242,845 14,885,179 15,680,857 15,878,022

Unfunded AAL/ (funding excess)
(b-a)
309,259 378,301 781,713 1,041,490 1,663,511 2,264,416

Funding ratio (a/b)
97.6 % 97.2 94.5 93.0 89.4 85.7

Annual covered payroll
(c)
$ 2,445,619 2,514,430 2,630,167 2,680,972 2,809,199 2,674,155

Unfunded AAL/ (funding excess) as percentage of covered payroll
[(b-a)/c]
12.6 % 15.0 29.7 38.8 59.2 84.7

Public School Employees Retirement System

6/30/2004 6/30/2005 6/30/2006 6/30/2007 6/30/2008 6/30/2009

743,815 753,767 766,277 785,460 791,855 769,618

666,883 671,040 691,651 746,078 770,950 823,232

(76,932) (82,727) (74,626) (39,382) (20,905)
53,614

111.5 112.3 110.8 105.3 102.7 93.5

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Legislative Retirement System

6/30/2004 6/30/2005 6/30/2006 6/30/2007 6/30/2008 6/30/2009

27,892 28,462 29,172 30,049 30,706 30,303

22,023 23,531 23,407 24,357 24,454 23,523

(5,869) (4,931) (5,765) (5,692) (6,252) (6,780)

126.6 121.0 124.6 123.4 125.6 128.8

3,402 3,586 3,602 3,688 3,778 3,780

(172.5) (137.5) (160.0) (154.3) (165.5) (179.4)

Georgia Judicial Retirement System

6/30/2004 6/30/2005 6/30/2006 6/30/2007 6/30/2008 6/30/2009

250,313 264,924 279,564 297,090 313,315 317,624

196,502 213,060 229,837 249,278 268,516 282,474

(53,811) (51,864) (49,727) (47,812) (44,799) (35,150)

127.4 124.3 121.6 119.2 116.7 112.4

40,908 42,916 45,308 48,621 51,102 52,083

(131.5) (120.9) (109.8)
(98.3) (87.7) (67.5)

Financial Section

Georgia Military Pension Fund

6/30/2004 6/30/2005 6/30/2006 6/30/2007 6/30/2008 6/30/2009

1,250 2,176 3,100 4,165 5,269 6,413

12,343 14,454 17,625 19,887 19,124 21,021

11,093

10.1

12,278

15.1

14,525

17.6

15,722

20.9

13,855

27.6

14,608

30.5

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

This data, except for annual covered payroll, was provided by the System's actuary. No statistics regarding covered payroll are available. Contributions are not based upon members' salaries, but are simply $4.00 per member per month for nine months each fiscal year. No statistics regarding covered payroll are available. Active and inactive plan member information is maintained by the Georgia Department of Defense.
See accompanying notes to required supplementary schedules and accompanying independent auditors' report.

39

Financial Section
Required Supplementary Schedules (UNAUDITED)
Schedules of Employer Contributions
(In thousands)

Employees' Retirement System Public School Employees Retirement System Legislative Retirement System Georgia Judicial Retirement System Georgia Military Pension Fund

Year ended June 30
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009

State annual required
contribution

$

245,388

243,074

258,482

270,141

286,256

281,206

833 833 3,634 6,484 2,866 5,529


1,558 1,594 1,683 1,778 2,395 1,703
617 891 891 1,005 1,103 1,323

Percentage contributed
100 % 100 100 100 100 100
100 100 100 100 100 100
N/A N/A N/A N/A N/A N/A
100 100 100 100 100 100
100 100 100 100 100 100

This data was provided by the System's actuary. See accompanying notes to required supplementary schedules and accompanying independent auditors' report.

40

Financial Section
Notes to Required Supplementary Schedules
June 30, 2010
(1) Schedule of Funding Progress The actuarial value of assets recognizes a portion of the difference between the fair value of assets and the expected actuarial value of assets, based on the assumed valuation rate of return. The amount recognized each year is 1/7th of the difference between fair value and expected actuarial value.
(2) Schedule of Employer Contributions The required employer contributions and percent of those contributions actually made are presented in the schedule.
(3) Actuarial Assumptions The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information from the actuarial valuations for the most recent two- year period is as follows:

Employees' Retirement System: Valuation date Actuarial cost method Amortization method Remaining amortization period of the Unfunded actuarial accrued liability Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post-retirement cost-of-living adjustment

June 30, 2009 Entry age Level percent of pay, open

June 30, 2008 Entry age Level percent of pay, open

30 years 7-year smoothed market

26 years 7-year smoothed market

7.50% 5.45-9.25% None

7.50% 5.45-9.25% None

Public School Employees Retirement System: Valuation date Actuarial cost method Amortization method Remaining amortization period of the Funding Excess Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post-retirement cost-of-living adjustment

June 30, 2009 Entry age Level dollar, open
30 years 7-year smoothed market
7.50% N/A 3% annually

June 30, 2008 Entry age Level dollar, open
10 years 7-year smoothed market
7.50% N/A 3% annually

Includes inflation rate of 3.75% in 2009 and 3.75% in 2010.

41

Financial Section
Notes to Required Supplementary Schedules

Legislative Retirement System: Valuation date Actuarial cost method Amortization method Remaining amortization period of the Funding Excess Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post-retirement cost-of-living adjustment

June 30, 2009 Entry age Level dollar, open
N/A 7-year smoothed market
7.50% N/A 3% annually

June 30, 2008 Entry age Level dollar, open
N/A 7-year smoothed market
7.50% N/A 3% annually

Georgia Judicial Retirement System: Valuation date Actuarial cost method Amortization method Remaining amortization period of the Funding Excess Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post-retirement cost-of-living adjustment

June 30, 2009 Entry age Level percent of pay, open

June 30, 2008 Entry age Level percent of pay, open

10 years 7-year smoothed market

14 years 7-year smoothed market

7.50% 6.00% None

7.50% 6.00% None

Georgia Military Pension Fund: Valuation date Actuarial cost method Amortization method Remaining amortization period of the Unfunded actuarial accrued liability Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post-retirement cost-of-living adjustment

June 30, 2009 Entry age Level dollar, open
20 years 7-year smoothed market
7.50% N/A None

June 30, 2008 Entry age Level dollar, open
30 years 7-year smoothed market
7.50% N/A None

Includes inflation rate of 3.75% in 2009 and 3.75% in 2010.

42

Financial Section

Additional Information

Administrave Expenses Schedule - Contributions and Expenses
Year ended June 30 2010, with comparative amounts for the Year Ended June 30, 2009 (In thousands)

Contributions: Employees' Retirement System Public School Employees Retirement System Legislative Retirement System Georgia Judicial Retirement System State Employees' Assurance Department - Active State Employees' Assurance Department - OPEB Georgia Defined Contribution Plan 401(k) Plan 457 Plan Georgia Military Pension Fund Superior Court Judges Retirement Fund District Attorneys Retirement Fund
Total contributions
Expenses: Personal services: Salaries and wages Retirement contributions FICA Health insurance Miscellaneous
Communications: Postage Publications and printing Telecommunications Travel
Professional Services: Accounting and investment services Computer services Contracts Actuarial services Medical services Professional fees Legal services

2010

$

14,505

1,956

120

270

22

203

1,110

829

2,115

43

6

1

21,180

5,045 514 358
1,043 35
6,995
146 25 78 15
264
5,044 1,547 2,528
324 164 150
74
9,831

Management fees:

Building maintenance

636

Other services and charges: Temporary services Supplies and materials Repairs and maintenance Courier services Depreciation Miscellaneous Office equipment
Total expenses
Net income

125 71 41 11
3,154 48 4

3,454

21,180

$



See accompanying independent auditors' report.

2009
16,809 588 110 175 22 203 310
1,028 1,769
-- 24
6 21,044
4,887 511 354 621 33
6,406
167 47 86 15
315
4,802 1,565 2,538
482 153 115 131
9,786
636
521 147
41 14 3,125 49
4
3,901
21,044


43

Financial Section
Additional Information
Schedule of Investment Expenses
Year Ended June 30, 2010, with comparative amounts for the Year Ended June 30, 2009

Investment Advisory and Custodial Fees Miscellaneous Total Investment Expenses
See accompanying independent auditors' report.

2010

2009

$ 6,005,549 4,931,856 3,541,749 4,502,969

$ 9,547,298 9,434,825

44

Investment Section

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Investment Section

Investment Overview
While the past year was less eventful than the prior year and returns were positive, the sovereign debt crisis emanating from Greece demonstrated that stock markets are still vulnerable to periods of bad news. There are undoubtedly large problems that need to be resolved, but many parts of the world economy are correcting the prior excesses. So as we cycle between episodes of good news and bad news, the financial markets will likely continue to fluctuate.
This pattern is not a new phenomenon and it is easy to get caught up in the latest headlines, but as a pension plan it is more important to stay focused on the long-term. The System continues to invest in a mix of liquid, high quality bonds and stocks. These types of investments allow the System to participate in rising markets while moderating the risks on the downside. A high quality balanced fund has proven to be a successful strategy in a variety of markets over a long period of time.
As in previous years, the bias to quality was a primary goal and was successfully met. "Conservation of Capital" and "Conservatism" continue to be the principal guides in investment decisions. The Board of Trustees continues to use a diversified portfolio to accomplish these objectives.
The economy rebounded during the past fiscal year, although the pace of growth was slowing towards the end of the period. The improvement in housing will likely continue to be slow and uneven as excess inventory and more foreclosures dampen housing starts and prices. Growth in employment, or rather the lack thereof, remains the largest single factor plaguing the economy. The unemployment rate does not appear to be increasing, but neither is it decreasing and remains mired at year ago levels of 9.5%. The real bright spot has been corporate profits, which rose 38%, as companies slashed costs and benefitted from a rebound in business and consumer spending.
Studies undertaken to evaluate the investment returns of pension funds over very long time horizons indicate that the asset allocation decision has the most impact on the fund's returns. Although the returns for the various asset categories vary from year to year, over the long term equities usually outperform fixed income and cash by a very wide margin. For that reason, the System has generally maintained a maximum equity exposure with the remainder of the fund in fixed income securities designed to generate income and preserve capital.

Equity markets rebounded nicely during the fiscal year. The return for the S&P 500 Index was 14.4%. The Dow Jones Industrial Average Index rose 18.9%. Among individual companies, returns varied depending upon the company's size, industry, and exposure to global markets. The MSCI EAFE Index returned 5.9% and the MSCI Emerging Market Index returned 23.2%.
In a change from last year, large and small capitalization domestic stocks underperformed. The S&P 400 Mid Capitalization Index outperformed both the S&P 500 and S&P 600 with a return of 24.9%. The S&P 600 Small Capitalization Index rose 23.6%, well above its ten-year average return of 5.6%, and also above the S&P 500's 14.4%.
These overall returns can be explained primarily by massive central bank and fiscal stimulus, which led to economic growth and rapidly increasing corporate profits. The improved foreign returns can be attributed to many of the same reasons and also the strong emerging market economies providing some offset to the more debt laden, slower growing economies of Europe and Japan.
Returns for the fixed income markets were above average this year. Yields on long-term Treasury bonds began the period at 4.3% and ended at the low of the year of 3.9%, after rapidly falling from a high of 4.8% in early April. Overall the ten-year U.S. Treasury note returned 8.3% and the thirty-year U.S. Treasury bond returned 11.3%. Short-term Treasury bills only returned 0.1%.
Our primary benchmark, the Barclays Government/Credit Index rose 9.6%. It is a shorter maturity index containing higher yielding corporate bonds as well as Treasuries. Higher quality bonds underperformed lower quality bonds as evidenced by the 8.9% return for AAA & AA rated bonds versus 18.3% for BBB rated bonds.
In summary, the investment status of the System is excellent. The high quality of the System's investments is in keeping with the continued policy of "Conservatism" and "Conservation of Capital."
Prepared by the Division of Investment Services

Returns for one, three, five, ten and twenty year periods are presented in this section. The longer time periods, such as the twenty-year period, allow for more valid evaluation of returns, both in absolute terms and relative to an asset class index, by reducing emphasis on the short-term volatility of markets. The Daily Valuation Method was used to calculate rates of return which is in accordance with the CFA Institute's objectives as stated in its publication "Global Investment Performance Standards Handbook," second edition.

46

Pooled Investment Fund
As of June 30, 2010
Employees' Retirement System (ERS) Public School Employees Retirement System (PSERS) Legislative Retirement System (LRS) Georgia Judicial Retirement System (GJRS) State Employees' Assurance Department (SEAD) - Active State Employees' Assurance Department (SEAD) - OPEB Georgia Military Pension Fund (GMPF) Superior Court Judges Retirement Fund (SCJRF)
Total

Investment Section

$

10,942,725,108

616,218,860

24,810,454

270,556,084

155,912,770

679,349,836

6,634,963

750,957

$

12,696,959,032

Rates of Return

15 10
5 (5) (10)
1 Year

Equities S&P 500

3 Year

5 Year

10 Year

20 Year

12 10
8 6 4 2 (2) (4)
1 Year

Total Portfolio CPI

3 Year

5 Year

10 Year

20 Year

10 9 8 7 6 5 4 3 2
1 Year

Fixed Income Barclays Govt/Credit

3 Year

5 Year

10 Year

20 Year

Note: Rates of return are calculated using the Daily Valuation Method based on market rates of return.

47

Investment Section
Asset Allocation at Fair Value

70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%
0.0% 2010 2009 2008 2007 2006 2005

Equies Fixed Income Short-term Securies Mutual funds, etc

Investment Summary

Asset Allocation as of June 30 (in percentages)
Equities Fixed Income Short-Term Securities Mutual and Common Collective Trust Funds and Separate Accounts Total

2010
57.8% 33.0
2.8 6.4

2009
52.3 39.8
1.8 6.1

2008
55.6 37.2
1.5 5.7

2007
59.5 31.0
4.0 5.5

2006
58.6 35.3
0.8 5.3

2005
56.8 37.2
1.1 4.9

100%

100

100

100

100

100

Asset Allocation as of June 30 (in millions)

2010

Equities

$ 7,870

Fixed Income

4,506

Short-Term Securities

377

Mutual and Common Collective Trust Funds and Separate Accounts

867

2009
6,857 5,212
236 799

2008
8,947 6,000
244 915

2007
10,307 5,374 700 953

2006
9,253 5,585
121 843

2005
8,786 5,769
170 756

Total

$ 13,620 13,104 16,106 17,334 15,802 15,481

48

Investment Section

Schedule of Fees and Commissions
For the Year Ended June 30, 2010

Investment Advisors' Fees:* U.S. Equity International Equity Fixed Income
Investment Commissions: U.S. Equity International Equity
SEC Fees: Miscellaneous:*
Total Fees and Commissions

$

3,814,470

1,798,126

--

2,629,885 1,873,324
42,393 3,934,702

$

14,092,900

*Amount included in total investment expenses shown on page 44.

Twenty Largest Equity Holdings
As of June 30, 2010

Shares 527,548 2,263,506 3,499,894 1,337,860 591,461 1,205,888 1,046,519 1,931,388 4,855,406 1,605,291 4,635,770 2,526,243 140,520 2,582,819 1,293,814 2,790,854 1,159,545 3,999,956 697,300 870,186

Company
Apple Inc. Exxon Mobil Corp. Microsoft Corp. Johnson & Johnson International Business Machines Corp. Procter & Gamble Co. Chevron Corp. JPMorgan Chase & Co. Bank of America Corp. Hewlett-Packard Co. General Electric Co. Wells Fargo & Co. Google Inc. AT&T Inc. Wal-Mart Stores Inc. Cisco Systems Inc. Coca Cola Co. Pfizer Inc. Berkshire Hathaway Inc. PepsiCo Inc.

Fair Value $ 132,694,148
129,178,290 80,532,561 79,014,012 73,033,604 72,329,162 71,016,779 70,708,115 69,772,184 69,476,994 66,847,803 64,671,821 62,524,374 62,478,392 62,193,639 59,473,099 58,116,395 57,039,373 55,567,837 53,037,837

Top 20 Equities Remaining Equities

$ 1,449,706,419 6,420,777,094

Total Equities

$ 7,870,483,513

A complete listing is available upon written request, subject to restrictions of O.C.G.A Section 47-1-14. 49

Investment Section
Fixed Income Holdings*
As of June 30, 2010

Issuer
US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. BOND FHLMC GENERAL ELECTRIC CAP CORP GENERAL ELECTRIC CAP CORP US TREAS. NOTE PFIZER INC US TREAS. NOTE WELLS FARGO & COMPANY US TREAS. NOTE UNITED PARCEL SERVICE GENERAL ELECTRIC CAP CORP VERIZON WIRELESS US TREAS. BOND US TREAS. NOTE GENERAL ELECTRIC CAP CORP ONTARIO (PROVINCE OF) EUROPEAN INVESTMENT BANK BERKSHIRE HATHAWAY FIN CORP ROYAL BANK OF CANADA US TREAS. NOTE JOHNSON AND JOHNSON 3M COMPANY

Year of Maturity 2016 2016 2013 2019 2013 2013 2028 2012 2011 2020 2014 2015 2018 2011 2017 2019 2013 2014 2036 2017 2026 2015 2015 2012 2013 2012 2017 2012

Interest Rate 2.625 3.250 2.750 3.375 3.125 1.750 5.250 1.125 4.110 5.550 2.375 5.350 3.500 4.000 3.125 5.125 5.400 5.550 4.500 4.500 5.550 2.950 2.875 5.125 2.100 3.875 5.550 4.650

ERS Fixed Income Securities Defined Contribution Fixed Income Securities

Total ERS and Defined Contribution Fixed Income Securities

Par Value

$

370,000,000

287,000,000

284,000,000

240,000,000

224,000,000

232,000,000

194,000,000

229,000,000

174,000,000

164,000,000

167,000,000

131,000,000

131,000,000

131,000,000

121,000,000

109,000,000

109,000,000

98,000,000

97,000,000

90,000,000

105,000,000

98,000,000

93,000,000

87,000,000

87,000,000

66,000,000

54,000,000

54,000,000

Fair Value

$

380,667,100

304,377,850

298,887,280

248,568,000

238,490,560

237,273,360

233,496,460

230,646,510

177,526,980

172,696,920

172,492,630

148,419,070

140,036,380

134,537,000

126,549,060

124,430,040

118,815,450

109,872,700

107,154,930

102,389,400

100,766,400

100,473,520

95,426,370

93,690,300

88,326,750

70,893,240

63,056,880

58,902,660

$ 4,226,000,000 $ 4,478,863,800

26,000,000

26,811,540

$ 4,252,000,000 $ 4,505,675,340

*A complete listing is available upon written request, subject to restrictions of O.C.G.A Section 47-1-14.

50

Actuarial Section

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Actuarial Section

ERS
April 15, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Section 47-2-26 of the law governing the operation of the Employees' Retirement System of Georgia provides that the actuary shall make annual valuations of the contingent assets and liabilities of the Retirement System on the basis of regular interest and the tables last adopted by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the System prepared as of June 30, 2009. The report indicates that annual employer contributions at the rate of 6.88% of compensation for Old Plan Members, 11.63% of compensation for New Plan Members, and 7.42% for GSEPS Members for the fiscal year ending June 30, 2012 are sufficient to support the benefits of the System.
In preparing the valuation, the actuary relied on data provided by the System. While not verifying data at the source, the actuary performed tests for consistency and reasonableness. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the System enacted through the 2009 session of the General Assembly, as well as the one-time bonus payment to retired members and beneficiaries made in October 2009.
The System is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the System and to reasonable expectations of anticipated experience under the System. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) StatementNos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a percent of payroll. The valuation method used is the entry age normal

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
cost method. The normal contribution rate to cover current cost has been determined as a level percent of payroll. Gains and losses are reflected in the unfunded accrued liability which is being amortized as a level percent of payroll within a 30-year period.
The System is being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the System is operating on an actuarially sound basis. Assuming that contributions to the System are made by the employer from year to year in the future at the rates recommended on the basis of the successive valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the System may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the System and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the System.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM:bdm
52

Cathy Turcot Principal and Managing Director

Actuarial Section

PSERS
June 24, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Section 47-4-60 of the law governing the operation of the Georgia Public School Employees' Retirement System provides that the employer contribution shall be actuarially determined and approved by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the System prepared as of June 30, 2009. Based on a monthly benefit accrual rate of $14.75 effective July 1, 2008, the valuation indicates that annual employer contributions of $15,884,000 or $391.42 per active member for the fiscal year ending June 30, 2012 are sufficient to support the benefits of the System.
In preparing the valuation, the actuary relied on data provided by the System. While not verifying data at the source, the actuary performed tests for consistency and reasonableness. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the System enacted through the 2009 session of the General Assembly.
The System is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the System and to reasonable expectations of anticipated experience under the System. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) Statement Nos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a dollar per active member. The valuation method used is the entry age normal cost method. The normal contribution rate to cover current cost has been determined as a dollar per active member. Gains and losses are reflected in the unfunded accrued liability which is being amortized as a level dollar per active member within a 30-year period.

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
The System is currently being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the System is currently operating on an actuarially sound basis. However, it is our understanding that the legislature has appropriated an amount less than the annual required contribution (ARC) for fiscal year ending June 30, 2011. At that time, the System will not be funded in conformity with the minimum funding standards and will not be operating on an actuarial sound basis. Assuming that contributions to the System are made by the employer from year to year in the future at the rates recommended on the basis of the successive actuarial valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the System may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the System.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM:mjn

Cathy Turcot Principal and Managing Director
53

Actuarial Section

GJRS
June 24, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Section 47-23-21 of the law governs the operation of the Georgia Judicial Retirement System. The actuary makes annual valuations of the contingent assets and liabilities of the Retirement System on the basis of regular interest and the tables last adopted by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the System prepared as of June 30, 2009. The report indicates that annual employer contributions at the rate of 3.90% of compensation for the fiscal year ending June 30, 2012 are sufficient to support the benefits of the System.
In preparing the valuation, the actuary relied on data provided by the System. While not verifying data at the source, the actuary performed tests for consistency and reasonableness. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the System enacted through the 2009 session of the General Assembly as well as the one-time bonus payment to retired members and beneficiaries made in October 2009.
The System is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the System and to reasonable expectations of anticipated experience under the System. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) Statement Nos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a percent of payroll. The valuation method used is the entry age normal cost method. The normal contribution rate to cover current cost has been determined as a level percent of payroll. Gains and losses are

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
reflected in the unfunded accrued liability which is negative and being amortized as a level percent of payroll within a 10-year period.
The System is being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the System is operating on an actuarially sound basis. Assuming that contributions to the System are made by the employer from year to year in the future at the rates recommended on the basis of the successive actuarial valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the System may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the System.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM/CT:dmw
54

Cathy Turcot Principal and Managing Director

Actuarial Section

LRS
April 15, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Section 47-6-22 of the law governing the operation of the Georgia Legislative Retirement System provides that the actuary shall make periodic valuations of the contingent assets and liabilities of the Retirement System on the basis of regular interest and the tables last adopted by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the System prepared as of June 30, 2009. The report indicates that no annual employer contributions for the fiscal year ending June 30, 2012 are required to support the benefits of the System.
In preparing the valuation, the actuary relied on data provided by the System. While not verifying data at the source, the actuary performed tests for consistency and reasonableness. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the System enacted through the 2009 session of the General Assembly.
The System is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the System and to reasonable expectations of anticipated experience under the System. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) Statement Nos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a dollar per active member. The valuation method used is the entry age normal cost method. The normal contribution rate to cover current cost has been determined as a level dollar per active member. Gains and losses are reflected in the unfunded accrued liability which is negative and being amortized as a level dollar per active member.

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
The System is being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the System is operating on an actuarially sound basis. Assuming that contributions to the System are made by the employer from year to year in the future at the rates recommended on the basis of the successive actuarial valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the System may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the System.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM/CT:dmw

Cathy Turcot Principal and Managing Director
55

Actuarial Section

GMPF
August 19, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Section 47-24-22 of the law governing the operation of the Georgia Military Pension Fund provides that the actuary shall make periodic valuations of the contingent assets and liabilities of the Pension Fund on the basis of regular interest and the tables last adopted by the Board of Trustees. We have submitted the report giving the results of the actuarial valuation of the Fund prepared as of June 30, 2009. The report indicates that annual employer contributions of $1,521,245 or $126.57 per active member for the fiscal year ending June 30, 2012 are sufficient to support the benefits of the Fund.
In preparing the valuation, the actuary relied on data provided by the Fund. While not verifying data at the source, the actuary performed tests for consistency and reasonableness. Our firm, as actuary, is responsible for all of the actuarial trend data in the financial section of the annual report and the supporting schedules in the actuarial section of the annual report.
In our opinion, the valuation is complete and accurate, and the methodology and assumptions are reasonable as a basis for the valuation. The valuation takes into account the effect of all amendments to the Fund enacted through the 2009 session of the General Assembly.
The Fund is funded on an actuarial reserve basis. The actuarial assumptions recommended by the actuary and adopted by the Board are in the aggregate reasonably related to the experience under the Fund and to reasonable expectations of anticipated experience under the Fund. The assumptions and methods used for funding purposes meet the parameters set for the disclosures presented in the financial section by Governmental Accounting Standards Board (GASB) Statement Nos. 25 and 27. The funding objective of the plan is that contribution rates over time will remain level as a percent dollar per active member. The valuation method used is the entry age normal cost method. The normal contribution rate to cover current cost has been determined as a level dollar per active member. Gains and losses are reflected in the unfunded accrued liability which is being amortized as a level dollar per active member within a 20-year period.

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
The Fund is being funded in conformity with the minimum funding standard set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. In our opinion the Fund is operating on an actuarially sound basis. Assuming that contributions to the Fund are made by the employer from year to year in the future at the rates recommended on the basis of the successive actuarial valuations, the continued sufficiency of the retirement fund to provide the benefits called for under the Fund may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience is performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the Fund.
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM:mjn
56

Cathy Turcot Principal and Managing Director

Actuarial Section

SEAD Pre-Retirement
April 15, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Chapters 47-2 and 47-19 of the Code of Georgia which govern the operation of the Georgia Employees' Group Term Life Insurance Plan provide that the actuary shall make periodic valuations of the contingent assets and liabilities of the Insurance Plan on the basis of regular interest and the tables last adopted by the Board of Trustees. In this report, we have determined liabilities for life insurance benefits payable upon death in active service (Pre-Retirement).
We have submitted the report giving the results of the valuation of the Plan prepared as of June 30, 2009. The report indicates that employee contributions at the rate of 0.05% of active payroll for Old Plan members, and 0.02% of active payroll for New Plan members, members of the Legislative Retirement System and members of the Judicial Retirement System are sufficient to support the preretirement benefits of the Plan. No employer contribution is required for the fiscal year ending June 30, 2012 for pre-retirement benefits.
The funding method used for this valuation is the unit credit actuarial cost method with projected benefits. Gains and losses are reflected in the unfunded accrued liability. The actuarial assumptions used are in the aggregate reasonably related to the experience under the Plan and to reasonable expectations of anticipated experience under the Plan. In our opinion, the Plan is operating on an actuarially sound basis and the sufficiency of the funds to provide the benefits called for by the Plan may be safely anticipated.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the Plan.

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM/CT:mjn

Cathy Turcot Principal and Managing Director
57

Actuarial Section

SEAD Post-Retirement
April 15, 2010
Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318-7778
Attention: Ms. Pamela Pharris, Executive Director
Members of the Board:
Chapters 47-2 and 47-19 of the Code of Georgia which govern the operation of the Georgia Employees' Group Term Life Insurance Plan provide that the actuary shall make periodic valuations of the contingent assets and liabilities of the Insurance Plan on the basis of regular interest and the tables last adopted by the Board of Trustees. In this report, we have determined liabilities for life insurance benefits payable upon death after retirement (Post-Retirement).
In accordance with GASB 43 and 45, we have determined the liabilities for life insurance benefits payable upon death after retirement. We have submitted the report giving the results of the valuation of the Plan prepared as of June 30, 2009. The report indicates, for postretirement benefits, the employer annual required contribution for the fiscal year ending June 30, 2012 based on a 30-year amortization period of the unfunded accrued liability is 0.61% of covered payroll.
The funding method used for this valuation is the unit credit actuarial cost method with projected benefits. Gains and losses are reflected in the unfunded accrued liability. The actuarial assumptions used are in the aggregate reasonably related to the experience under the Plan and to reasonable expectations of anticipated experience under the Plan. In our opinion, the Plan is operating on an actuarially sound basis and the sufficiency of the funds to provide the benefits called for by the Plan may be safely anticipated assuming future annual required contributions (ARC) are contributed when due.
This is to certify that the independent consulting actuary is a member of the American Academy of Actuaries and has experience in performing valuations for public retirement systems, that the valuation was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the retirement system and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the Plan.

3550 Busbee Pkwy, Suite 250 Kennesaw, GA Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com
Future actuarial results may differ significantly from the current results presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. Since the potential impact of such factors is outside the scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

Sincerely yours,

Edward A. Macdonald, ASA, FCA MAAA President EAM/CT:mjn
58

Cathy Turcot Principal and Managing Director

Actuarial Section
The laws governing the Employees' Retirement System and the plans it administers requires an actuary to perform an annual valuation of the soundness of the system. In addition, the actuary must perform at least once every five years an actuarial investigation of the mortality, service and compensation experience of the members and beneficiaries of the System. The latest valuation was performed as of June 30, 2009 based on actuarial assumptions approved by the Board during the last experience study on April 20, 2006. The GMPF's last experience study was approved by the Board on February 19, 2009.
The more pertinent facts and significant assumptions underlying the computations included in the June 30, 2009 reports are as follows:
Summary of Actuarial Assumptions

Valuation Date Actuarial Cost Method

ERS
June 30, 2009 Entry age

PSERS
June 30, 2009 Entry age

GJRS
June 30, 2009 Entry age

LRS
June 30, 2009 Entry age

GMPF
June 30, 2009 Entry age

Amortization Method Amortization Period

Level percent of pay, open Level dollar, open Level percent of pay, open Level dollar, open Level dollar, open

30 years

30 years

10 years

N/A

20 years

Actuarial Asset Valuation Method

Based on the total fair value income of investments with the excess or shortfall of actual investment income over or under the expected investment return smoothed over 7 years. One-seventh of the excess or shortfall is recognized each year for seven years.

Investment Rate of Return Inflation Rate Projected Salary Increases COLA

7.50% 3.75% 5.45-9.25% None

7.50% 3.75%
n/a 3.0% Annually

7.50% 3.75% 6.00% None

7.50% 3.75%
n/a 3.0% Annually

7.50% 3.75%
n/a 0%

Adopted by the Board on 10/11/2005 Adopted by the Board on 6/16/2005

Rates of Withdrawal Prior to Retirement (Withdrawal, Death, Disability)

ERS

Representative values of the assumed annual rates of separation other than retirement for non-law enforcement officers are as follows. Special rates of separation apply to law enforcement officers.

Annual Rates of Death

Annual Rates of Disability

Age

Men Women Men Women

20

.06 %

.03 % .05 %

.05 %

25

.07

.03

.05

.05

30

.08

.04

.05

.05

35

.09

.06

.10

.05

40

.13

.08

.35

.14

45

.19

.11

.77

.40

50

.32

.17

1.30

.70

55

.56

.29

2.00

1.20

60

1.02

.58

--

--

65

1.80

1.08

--

--

69

2.60

1.50

--

--

59

Actuarial Section

Annual Rates of Withdrawal Years of Service

0-4

5-9

10 & over

Age

Men Women Men Women Men Women

20

30.00 % 28.00 %

--%

--%

--%

--%

25

24.00

24.00

11.00

11.00

--

--

30

22.00

22.00

9.00

11.00

6.00

8.00

35

22.00

20.00

8.00

9.00

5.00

6.00

40

20.00

17.00

8.00

8.00

4.00

4.00

45

17.00

16.00

7.00

7.00

3.00

3.50

50

14.00

16.00

6.00

6.00

3.50

3.50

55

13.00

15.00

5.00

6.00

4.00

5.00

60

13.00

15.00

5.00

6.00

4.50

5.00

65

16.00

20.00

10.00

11.00

4.50

5.00

PSERS

Annual Rates of Death

Annual Rate of Disability

Age

Men

Women

Both

20

.06 %

.03 %

--%

25

.08

.03

--

30

.08

.04

--

35

.10

.06

.01

40

.15

.08

.02

45

.23

.11

.07

50

.40

.17

.17

55

.71

.29

.45

60

1.29

.58

.70

65

2.17

1.08

--

Annual Rates of Withdrawal Years of Service

0-4

5-9

10 & over

Age

Men Women Men Women Men Women

20

36.00 % 36.00 %

--%

--%

--%

--%

25

31.00

28.00

19.00

18.00

--

--

30

28.00

24.00

16.00

16.00

13.00

11.00

35

27.00

20.00

15.00

14.00

9.00

10.00

40

24.00

19.00

14.00

12.50

8.00

9.00

45

21.00

17.50

12.50

11.00

7.00

8.00

50

19.50

16.00

11.00

9.50

6.50

7.00

55

16.00

13.00

9.00

8.00

6.00

6.00

60

GJRS

Actuarial Section

Annual Rates of

Withdrawal

Death

Disability

Age

Both

Men

Women

Both

20

13.0 %

.056 %

.029 %

.1 %

25

13.0

.073

.030

.1

30

13.0

.084

.040

.2

35

13.0

.089

.055

.3

40

13.0

.125

.082

.4

45

4.5

.190

.111

.7

50

3.0

.321

.173

1.0

55

3.0

.558

.292

1.8

60

3.0

1.015

.583

2.9

65

3.0

1.803

1.076

4.7

LRS

Annual Rates of

Withdrawal

Death

Disability

Age

Both

Men

Women

Both

20

10.0 %

.056 %

.029 %

.1 %

25

10.0

.073

.030

.1

30

10.0

.084

.040

.2

35

10.0

.089

.055

.3

40

10.0

.125

.082

.4

45

10.0

.190

.111

.7

50

10.0

.321

.173

1.0

55

10.0

.558

.292

1.8

60

10.0

1.015

.583

2.9

65

10.0

1.803

1.076

--

GMPF

Rates of Withdrawal from Active Service

Service

Rates

10 or less

15 %

11-13

11

14-19

8

20 or more

13

Age

Rates of Death

25

.07 %

30

.07

35

.09

40

.18

45

.29

50

.40

55

.60

60

85

61

Actuarial Section

Annual Rates of Retirement

ERS

Old Plan

Age 65 or more than 34 years

Age

Men

Women

Age 60 or 30 years

Men

Women

50

50 %

50 %

9.0 %

7.5 %

55

50

50

11.0

11.5

60

50

50

22.0

24.0

62

50

50

43.0

44.0

64

50

50

27.0

30.0

65

44

45

--

--

67

26

28

--

--

70

100

100

--

--

New Plan and GSEPS

Men 10 % 10 15 38 29 43 27 100

Women 10 % 10 20 36 30 38 34
100

It is also assumed that 95% of active Old Plan members will retire during the year in which they attain 34 years of service. In addition, it is assumed that 3.5% of male members under age 55, 7.5% of male members ages 55 and over, 3.0% of female members under age 55 and 8.0% of female members ages 55 and over will retire under early reduced retirement.
An additional 10% of active New Plan and GSEPS members less than age 65 are expected to retire in the year in which they attain 30 years of service. In addition, it is assumed that 6.0% of male members under age 55, 6.5% of male members ages 55 and over, 5.0% of female members under age 55 and 10.0% of female members ages 55 and over will retire under early reduced retirement.
Special retirement rates apply to law enforcement officers.

PSERS

Age

Annual Rate

Age

Annual Rate

60

17 %

68

25 %

61

17

69

25

62

26

70

28

63

18

71

28

64

21

72

28

65

32

73

28

66

25

74

28

67

25

75 & over

100

GJRS

Age 60 61-64 65-69 70 71-74 75

Annual Rates of Retirement* 25 % 10 12 50 20 100

* In addition, 40% are assumed to retire each year afer attaining 24 years of service before age 70.

62

Actuarial Section

LRS

Age Annual Rate

Age

Annual Rate

60 - 69 70 71

10 % 35 15

73

25 %

74

40

75

100

72

15

GMPF

Age 60 61 62 63 64 65 & over

Annual Rates of Retirement 60.0 % 33.3 33.3 33.3 33.3 100.0

Annual Rates of Death After Retirement

For all plans except PSERS, the 1994 Group Annuity Mortality Table rated forward two years is used for the period after retirement and for dependent beneficiaries. The RP-2000 Disabled MortalityTable set forward three years is used for the period after disability retirement. For PSERS, the 1994 Group Annuity Table set forward four years for males and set forward two years for females is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disability Mortality Table set forward 5 years for males is used for the period after disability retirement.

ERS

Age

Men

40

.125 %

45

.190

50

.321

55

.558

60

1.015

Women .082 % .111 .173 .292 .583

Age

Men

Women

65

1.803 %

1.076 %

70

2.848

75

4.517

1.651 2.837

80

7.553

4.915

85

11.567

8.402

PSERS

Age

Men

40

.146 %

45

.233

50

.398

55

.709

60

1.294

Women .083 % .111 .173 .292 .583

Age

Men

Women

65

2.173 %

1.076 %

70

3.405

75

5.586

1.651 2.837

80

8.961

4.915

85

13.945

8.402

63

Actuarial Section

GJRS

Age

Men

Women

Age

Men

Women

40

.125 %

.082 %

65

1.803 %

1.076 %

45

.190

.111

50

.321

.173

70

2.848

1.651

75

4.517

2.837

55

.558

.292

80

7.553

4.915

60

1.015

.583

85

11.567

8.402

LRS

Age

Men

Women

Age

Men

Women

40

.125 %

.082 %

65

1.803 %

1.076 %

45

.190

.111

50

.321

.173

70

2.848

1.651

75

4.517

2.837

55

.558

.292

80

7.553

4.915

60

1.015

.583

85

11.567

8.402

GMPF

Age

Men

Women

Age

Men

Women

40

.125 %

.082 %

65

1.803 %

1.076 %

45

.190

.111

50

.321

.173

70

2.848

1.651

75

4.517

2.837

55

.558

.292

80

7.553

4.915

60

1.015

.583

85

11.567

8.402

64

Active Members
ERS

Actuarial Section

Year
2004 2005 2006 2007 2008 2009

Annual Payroll Active Members (in thousands) Average Pay

72,106 72,716 74,089 73,985 75,293 71,272

$

2,445,619 $

33,917

2,514,430

34,579

2,630,167

35,500

2,680,972

36,237

2,809,199

37,310

2,674,155

37,520

Change
(0.2) % 2.0 2.7 2.1 3.0 0.6

PSERS

Year
2004 2005 2006 2007 2008 2009

Active Members
35,943 36,704 37,587 39,086 40,121 40,581

PSERS is not a compensation based plan.

GJRS

Year
2004 2005 2006 2007 2008 2009

Active Members
451 468 478 480 482 502

Annual Payroll (in thousands) Average Pay

$

40,908 $ 90,705

42,916

91,701

45,308

94,787

48,621

101,294

51,102

106,021

52,083

103,751

Change
(0.8) % 1.1 3.4 6.9 4.7 (2.1)

LRS
LRS is not a compensation based plan. GMPF
GMPF is not a compensation based plan.

Year
2004 2005 2006 2007 2008 2009

Active Members
210 217 218 218 218 218

Year
2004 2005 2006 2007 2008 2009

Active Members
8,573 8,870 10,320 12,017 11,623 12,019

65

Actuarial Section

Member and Employer Contribution Rates
ERS

Year
2004 2005 2006 2007 2008 2009 2010

Member
1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%

Employer Rates

Old Plan*

New Plan GSEPS**

10.41% 10.41% 10.41% 10.41% 10.41% 10.41% 10.41%

10.41% 10.41% 10.41% 10.41% 10.41% 10.41% 10.41%

n/a n/a n/a n/a n/a 6.54% 6.54%

* Old Plan Rate includes an employer pick-up of employee contributions. ** GSEPS Plan began on January 1, 2009

PSERS

Year
2004 2005 2006 2007 2008 2009 2010

Member
$ 36 a year $ 36 a year $ 36 a year $ 36 a year $ 36 a year $ 36 a year $ 36 a year

Employer

$

833,000

833,000

3,634,000

6,484,000

2,866,000

5,680,000

5,529,000

GJRS

Year
2004 2005 2006 2007 2008 2009 2010

Member
7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%

Employer
3.85% 3.85% 3.85% 3.85% 3.85% 3.85% 3.85%

LRS

Year
2004 2005 2006 2007 2008 2009 2010

Member
8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%

Employer

$

52,000

54,000

54,000

62,000

73,000

71,000

75,000

GMPF

Year
2004 2005 2006 2007 2008 2009 2010

Member
n/a n/a n/a n/a n/a n/a n/a

Employer

$

617,000

891,000

891,000

1,005,000

1,103,000

1,323,000

1,434,000

66

Analysis of Change in Unfunded Accrued Liability (UAL)

Actuarial Section

2009

2008

2007

2006

2005

Amount of Increase (Decrease) (in Millions)

ERS

Interest (7.50) added to

$

124.8 $

78.1 $

58.6 $

28.4 $

23.2

previous UAL

Accrued liability contribution

(99.7)

(86.3)

(35.3)

7.4

7.0

Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Salary increases Method changes Amendments (COLAs) Assumption changes Lawsuit Data changes Misc. changes

Total

$

609.1 65.4
107.3 16.7
(296.9) 0.0
(358.6) 0.0
75.9 270.5
86.4
600.9 $

129.3 51.3
103.0 22.9 (22.7) 0.0
188.8 0.0 0.0 0.0
157.6
622.0 $

(59.5) 51.0 115.7 35.7 (33.2)
0.0 5.9 0.0 0.0 0.0 120.9
259.8 $

140.2 50.1 28.1 34.4 (84.2) (69.0)
245.2 0.0 0.0 0.0
22.8
403.4 $

102.4 (24.2) 39.1 39.4 (109.2) (66.0) 225.8 (168.5)
0.0 0.0 0.0
69.0

PSERS

Interest (7.50) added to

$

previous UAL

Accrued liability contribution

(1,567.9) $ 5,026.0

Amount of Increase (Decrease) (in Thousands)

(2,953.7) $ 7,267.0

(5,596.9) $ 4,729.2

(6,204.6) $ 6,961.2

(5,769.9) 9,691.0

Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Salary increases Method changes Amendments (COLAs) Assumption changes Lawsuit Data changes Allotment for expenses Misc. changes

Total

$

34,015.0 973.7
6,201.3 3,267.7
0.0 0.0 0.0 0.0 2,168.0 24,199.5 433.0 (197.3)
74,519.0 $

GJRS

Interest (7.50) added to

$

previous UAL

Accrued liability contribution

Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Salary increases Method changes Amendments (COLAs) Assumption changes Lawsuit Data changes Misc. changes

Total

$

(3,360.0) $
3,596.2
13,941.0 1,102.3 1,982.9 967.2
(10,561.2) 0.0
(2,359.4) 0.0 0.0
4,581.2 (240.6)
9,649.6 $

6,623.0 420.3
3,381.4 4,021.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0 (281.8)
18,477.2 $

(3,737.0) (320.5)
1,053.3 3,556.9
0.0 0.0 36,404.3 0.0 0.0 0.0 0.0 (846.1)
35,243.2 $

7,359.0 1,146.2 (1,717.5) 4,151.6
0.0 (3,594.0)
0.0 0.0 0.0 0.0 0.0 0.0
8,101.9 $

Amount of Increase (Decrease) (in Thousands)

5,256.0 (3,354.4) 4,608.5 4,121.2
0.0 (1,559.2) 23,008.5 (41,797.1)
0.0 0.0 0.0 0.0
(5,795.4)

(3,585.9) $

(3,729.5) $

(3,889.8) $

(4,035.8)

4,498.3

3,953.2

6,928.7

6,330.0

3,164.0 409.3
1,243.3 354.2
(3,432.4) 0.0
1,265.0 0.0 0.0 0.0
(903.4)
3,012.3 $

(1,026.0) (154.4)
(1,614.7) 659.5 369.8 0.0 24.1 0.0 0.0 0.0
3,433.5
1,915.5 $

3,464.0 709.7
1,649.8 322.6
(3,293.9) (1,738.0)
2,383.8 0.0 0.0 0.0
(4,400.5)
2,136.4 $

2,648.0 (950.0)
(2,694.5) 1,638.0 (5,002.0) 1,702.3 5,036.8 (2,725,8)
0.0 0.0 0.0
1,947.0

2004
Not provided by Actuary
Not provided by Actuary
Not provided by Actuary

67

Actuarial Section

2009

2008

2007

2006

2005

Amount of Increase (Decrease) (in Thousands)

LRS

Interest (7.50) added to

$

previous UAL

Accrued liability contribution

Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Salary increases Method changes Amendments (COLAs) Assumption changes Lawsuit Data changes Misc. changes

Total

$

(468.9) $
(21.1)
1,307.4 240.7 (5.7) 0.0 0.0 0.0 0.0 0.0 0.0
(1,529.1) (51.7)
(528.4) $

(426.9) $
(26.3)
241.7 (2.2)
(429.8) 35.9 0.0 0.0 0.0 0.0 0.0 0.0 47.4
(560.2) $

(432.3) $
(31.1)
(155.0) 119.4 423.8
0.0 0.0 0.0 0.0 0.0 0.0 0.0 147.9
72.7 $

(369.8)
(43.1)
289.0 (412.7) (154.7)
0.0 0.0 (142.0) 0.0 0.0 0.0 0.0 0.0
(833.3)

($440.1)
43.1
208.0 172.6 350.0 158.5
0.0 291.1 1.491.7 (1,337.6)
0.0 0.0 0.0
$937.3

2004
Not provided by Actuary

Note: Beginning with the 2011 report, the actuarial section will include Solvency test results and Change in Payroll results. This information has not been gathered in the past years, but is now being created for future years.

68

Statistical Section

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia

Statistical Section Introduction
The objective of the statistical section is to provide a historical perspective, context and relevant details to assist readers in evaluating the condition of the plans. All nonaccounting data is taken from ERSGA's internal sources except for information which is derived from the actuarial valuations. FY2010 is the first year ERSGA has added this information in their Annual Financial Report. Therefore, historical detail may not be complete for some schedules.
Financial Trends
The following schedules have been included to help the reader understand how the System's financial position has changed over the past 10 years:
Additions by Source Deductions by Type Change in Net Assets
Operational Trends
The following schedules have been included to help the readers understand how the System's financial report relates to the services provided by the System and the activities it performs:
Retiree Information Withdrawal (Refund) Data New Retiree Elections Overall Plan Statistics Note: Additional data will be provided beginning with the 2011 report. This information was easily obtained for this years report, but will be created for future years.
70

71

2001

ERS

Employee Contributions

$

Employer Contributions

Investment Earnings

Other

Total Additions to (Deductions

from) Plan Net Assets

$

55,887 315,505 (795,683)
--
(424,291)

PSERS

Employee Contributions

$

Employer Contributions

Investment Earnings

Other

Total Additions to (Deductions

from) Plan Net Assets

$

1,227 17,030 (49,236)
625
(30,354)

GJRS

Employee Contributions

$

Employer Contributions

Investment Earnings

Other

Total Additions to (Deductions

from) Plan Net Assets

$

3,347 1,269 (13,883)
175
(9,092)

LRS

Employee Contributions

$

Employer Contributions

Investment Earnings

Other

Total Additions to (Deductions

from) Plan Net Assets

$

250 97
(981) 110
(524)

GMPF*

Employer Contributions

$

--

Investment Earnings

--

Total Additions to (Deductions

from) Plan Net Assets

$

--

2002
57,920 233,229 (488,398)
--
(197,249)
1,275 11,623 (28,953)
625
(15,430)
3,527 20
(9,128) 175
(5,406)
291 70
(1,415) 110
(944)
-- --
--

*Plan began in 2003

2003

2004

2005

2006

2007

2008

2009

2010

55,456 246,172 488,611
--

54,166 245,388 1,115,798
--

49,973 243,074 930,287
--

50,963 258,482 774,724
--

49,250 270,141 1,869,113
90,333

48,324 286,256 (482,679)
--

43,978 281,206 (1,726,302)
--

42,052 263,064 1,176,741
--

790,239 1,415,352 1,223,334 1,084,169 2,278,837 (148,099) (1,401,118) 1,481,857

1,298 3,555 29,649
594
35,096

1,317 836
66,149 588
68,890

1,352 840
53,970 588
56,750

1,380 3,638 44,561
588
50,167

1,420 6,490 106,833
588
115,331

1,451 2,869 (27,052)
588
(22,144)

1,472 5,096 (97,156)
588
(90,000)

1,483 5,530 66,404
--
73,417

3,814 373
9,340 175
13,702

3,848 1,558 21,315
175
26,896

4,779 1,826 18,422
175
25,202

4,221 1,683 15,665
175
21,744

4,040 1,778 39,324
175
45,317

4,698 2,395 (10,702)
175
(3,434)

4,612 1,703 (38,164)
175
(31,674)

5,018 3,369 27,378
175
35,940

297 43
1,074 110
1,524
591 41
632

293 52
2,444 110
2,899
617 86
703

302 54
2,034 110
2,500
891 103
994

324 54
1,684 110
2,172
891 131
1,022

320 62
4,072 110
4,564

320 73
(1,051) 110
(548)

320 71
(3,772) 110
(3,271)

1,005 503
1,508

1,103 (191)
912

1,323 (657)
666

318 75
2,610 110
3,113
1,434 565
1,999

Additions by Source - Contribution/Investment Income (in thousands)

Statistical Section

Statistical Section

Deductions by Type (in thousands)

ERS

Fiscal Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Service
$ 409,024 449,985 497,634 549,545 605,688 664,891 721,869 797,052 889,669 878,482

Benefit Payments

Partial Lump-Sum
Option
6,289 14,360 17,821 24,792 22,011 23,480

Disability
68,414 80,507 92,433 101,887 111,902 120,315 127,091 131,709 135,743 146,031

Survivor Benefits
41,296 44,110 47,176 50,882 54,584 58,294 61,873 66,397 69,735 82,676

Total Benefit Payments

$

518,734

574,602

637,243

702,314

778,463

857,860

928,654

1,019,950

1,117,158

1,130,669

Net Administrative
Expenses
6,950 7,971 8,509 8,474 9,587 10,596 14,901 18,805 16,809 14,505

Refunds
7,563 5,430 5,253 5,819 6,510 6,978 6,696 7,815 6,597 6,483

Total Deductions
from Plan Assets

$

533,247

588,003

651,005

716,607

794,560

875,434

950,251

1,046,570

1,140,564

1,151,657

PSERS

Fiscal Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Service
$ 29,061 30,063 31,926 34,207 35,278 37,505 40,070 41,607 45,159 45,741

Benefit Payments

Disability
3,382 3,642 3,913 4,142 4,341 4,534 4,814 4,956 5,232 5,402

Survivor Benefits
1,021 1,089 1,182 1,297 1,397 1,465 1,580 1,682 1,806 2,052

Total Benefit Payments
$ 33,464 34,794 37,021 39,646 41,016 43,504 46,464 48,245 52,197 53,195

Net Administrative
Expenses
625 625 594 588 588 588 588 588 588 1,956

Refunds
282 261 233 294 287 316 319 308 261 251

Total Deductions
from Plan Assets
$ 34,371 35,680 37,848 40,528 41,891 44,408 47,371 49,141 53,046 55,402

GJRS

Benefit Payments

Fiscal Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Service

$

4,547

5,172

5,688

6,047

6,827

7,663

7,908

8,259

9,453

10,633

Disability
44 46 47 48 76 103 106 110 112 114

Survivor Benefits
559 643 748 947 1,069 1,136 1,285 1,498 1,546 1,618

Total Benefit Payments

$

5,150

5,861

6,483

7,042

7,972

8,902

9,299

9,867

11,111

12,365

Net Administrative
Expenses
175 175 175 175 175 175 175 175 175 270

Refunds
54 120
70 307
93 379
76 14 263 139

Total Deductions
from Plan Assets

$

5,379

6,156

6,728

7,524

8,240

9,456

9,550

10,056

11,549

12,774

72

Statistical Section

LRS

Benefit Payments

Fiscal Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Service

$

798

923

920

986

1,169

1,210

1,187

1,228

1,265

1,308

Survivor Benefits
281 317 326 337 384 381 401 406 425 436

Total Benefit Payments

$

1,079

1,240

1,246

1,323

1,553

1,591

1,588

1,634

1,690

1,744

Net Administrative
Expenses
110 110 110 110 110 110 110 110 110 120

Refunds
35 16 20 14 69 18 33 65 49 47

Total Deductions
from Plan Assets

$

1,224

1,366

1,376

1,447

1,732

1,719

1,731

1,809

1,849

1,911

GMPF**
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010

Benefit Payments

Service*

$

6

49

93

150

225

303

382

489

Total Benefit Payments

$

6

49

93

150

225

303

382

489

Net Administrative
Expenses
43

Total Deductions
from Plan Assets

$

6

49

93

150

225

303

382

532

*The only type of retirement in GMPF is a service retirement **Plan began in 2003.

73

Statistical Section Changes in Net Assets (in thousands)
74

ERS Total Additions Total Deductions Changes in Plan Net Assets
PSERS Total Additions Total Deductions Changes in Plan Net Assets
GJRS Total Additions Total Deductions Changes in Plan Net Assets
LRS Total Additions Total Deductions Changes in Plan Net Assets
GMPF Total Additions Total Deductions Changes in Plan Net Assets

2001

2002

$

(424,291)

(197,249)

533,247

588,003

(957,538) (785,252)

(30,354) 34,371 (65,725)

(15,430) 35,680 (51,110)

(9,092) 5,379 (14,471)

(5,406) 6,156 (11,562)

(524) 1,224 (1,748)

(944) 1,366 (2,310)

--

--

--

--

--

--

2003

2004

2005

2006

2007

2008

2009

2010

790,239 651,005 139,234

1,415,352 716,607 698,745

1,223,334 794,560 428,774

1,084,169 875,434 208,735

2,278,837 950,251
1,328,586

(148,099) 1,046,570 (1,194,669)

(1,401,118) 1,140,564 (2,541,682)

1,481,857 1,151,657
330,200

35,096 37,848 (2,752)

68,890 40,528 28,362

56,750 41,891 14,859

50,167 44,408
5,759

115,331 47,371 67,960

(22,144) 49,141 (71,285)

(90,000) 53,046 (143,046)

73,417 55,402 18,015

13,702 6,728 6,974

26,896 7,524
19,372

25,202 8,240
16,962

21,744 9,456
12,288

45,317 9,550
35,767

(3,434) 10,056 (13,490)

(31,674) 11,549 (43,223)

35,940 12,774 23,166

1,524 1,376
148

2,899 1,447 1,452

2,500 1,732
768

2,172 1,719
453

4,564 1,731 2,833

(548) 1,809 (2,357)

(3,271) 1,849 (5,120)

3,113 1,911 1,202

632

703

994

1,022

1,508

912

666

1,999

6

49

93

150

225

303

382

532

626

654

901

872

1,283

609

284

1,467

Number of Retirees

Statistical Section

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
0

ERS Rerees

10,000

20,000

38,518 37,049 35,186 33,871 32,685 31,453 29,847 28,562 27,272 25,927

30,000

40,000

50,000

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
0

GJRS Rerees

179 170 164 171 151 148 136 133

206 201

50

100

150

200

250

GMPF Rerees

2010

480

2009

386

2008

305

2007

236

2006

159

2005

104

2004

61

2003 17

0

100

200

300

400

500

600

PSERS Rerees

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

13,995 13,804 13,558 13,189 12,786 12,703 12,353 12,078 11,917 11,691

10,500 11,000 11,500 12,000 12,500 13,000 13,500 14,000 14,500

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
0

LRS Rerees

50

100

150

235 229 225 220 216 226 207 206 193 192

200

250

75

Statistical Section Average Monthly Payments to Retirees

ERS

$2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$5,500

GJRS

$5,000

$4,500

$4,000

$3,500

$3,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GMPF
$85 $75 $65 $55 $45 $35 $25
2003 2004 2005 2006 2007 2008 2009 2010

$335 $315 $295 $275 $255 $235 $215 $195 $175

PSERS
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LRS
$650 $600 $550 $500 $450 $400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

76

Annual Benefit

Thousands

$ 1,200,000
1,100,000 1,000,000
900,000 800,000 700,000 600,000 500,000

ERS Annual Benet
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$ 14,000

GJRS Annual Benet

12,000

10,000

8,000

6,000

4,000

2,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Thousands

$ 601,000

GMPF Annual Benet

501,000

401,000

301,000

201,000

101,000

1,000

2003

2004

2005

2006

2007

2008

2009

2010

Thousands

Thousands

Statistical Section

$ 55,000
50,000 45,000 40,000 35,000 30,000 25,000 20,000

PSERS Annual Benet
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LRS Annual Benet
$ 1,900
1,700 1,500 1,300 1,100
900 700 500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

77

Statistical Section Withdrawal Statistics

ERS Withdrawals

8,000

7,000 6,000

5,000

4,000 2,000

1,000 -

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

ERS Average Withdrawal

$1,600

$1,500 1,400

1,300

1,200 1,100

1,000 900

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

ERS Annual Withdrawal (in thousands)
$8,000 7,500 7,000 6,500 6,000 5,500 5,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PSERS Withdrawals
1600 1400 1200 1000 800 600 400 200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PSERS Average Withdrawal

$250 240 230 220 210 200 190 180 170 160 150

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PSERS Annual Withdrawal (in thousands)
$350 300 250 200 150 100 50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GJRS Withdrawals
14 12 10 8 6 4 2 -
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,500 1,400 1,300 1,200 1,100 1,000
900 800 700 600

GJRS Average Withdrawal
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GJRS Annual Withdrawal (in thousands)

$400 350 300 250 200 150 100 50
-

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LRS Withdrawals
14 12 10 8 6 4 2 -
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LRS Average Withdrawal
$14,000 12,000 10,000 8,000 6,000 4,000 2,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LRS Annual Withdrawal (in thousands)
$80 70 60 50 40 30 20 10 -
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Note: The GMPF Plan does not have a refund feature.

78

Statistical Section

Average Monthly Benefit Payment for New Retirees - ERS

2001
Average Monthly Benefit Average Final Average Salary Number of Retirees
2002
Average Monthly Benefit Average Final Average Salary Number of Retirees
2003
Average Monthly Benefit Average Final Average Salary Number of Retirees
2004
Average Monthly Benefit Average Final Average Salary Number of Retirees
2005
Average Monthly Benefit Average Final Average Salary Number of Retirees
2006
Average Monthly Benefit Average Final Average Salary Number of Retirees
2007
Average Monthly Benefit Average Final Average Salary Number of Retirees
2008
Average Monthly Benefit Average Final Average Salary Number of Retirees
2009
Average Monthly Benefit Average Final Average Salary Number of Retirees
2010
Average Monthly Benefit Average Final Average Salary Number of Retirees

10-15

Years of Credited Service

16-20

21-25

26-30

Over 30

Total

$556.82 $2,577.80
286

$930.29 $2,771.52
210

$1,356.00 $3,084.89
200

$1,533.98 $3,171.87
321

$3,043.12 $4,015.49
1,077

$2,099.17 $3,489.22
2,094

$651.28 $2,608.44
300

$1,008.52 $2,777.64
262

$1,472.04 $3,058.11
212

$1,778.52 $3,258.21
290

$3,265.53 $4,127.08
933

$2,170.36 $3,481.95
1,997

$673.29 $2,675.88
299

$1,099.73 $3,307.90
233

$1,570.92 $3,133.09
234

$1,756.82 $7,027.30
261

$3,444.12 $ 4,268.39
1,009

$2,337.32 $4,147.79
2,036

$661.26 $2,729.52
336

$999.80 $2,840.39
271

$1,616.46 $3,390.17
202

$1,901.33 $3,561.77
290

3,486.20 4,404.67
991

2,309.02 3,717.68
2,090

$704.19 $2,979.35
309

$991.76 $2,858.79
312

$1,440.14 $3,219.54
254

$1,816.69 $3,553.20
299

$3,440.48 $4,321.38
1,091

$2,291.20 $3,711.85
2,265

$632.54 $2,867.00
281

$1,022.68 $2,971.73
299

$1,347.20 $3,087.80
219

$1,789.67 $3,587.30
298

$3,458.78 $4,345.99
1,011

$2,281.17 $3,715.95
2,108

$655.86 $2,935.70
307

$961.27 $3,071.63
303

$1,317.36 $3,265.26
247

$1,789.83 $3,745.37
292

$3,423.26 $4,373.83
1,022

$2,229.02 $3,778.07
2,171

$701.03 $3,025.39
309

$1,068.51 $3,181.44
306

$1,457.03 $3,408.23
280

$1,899.48 $3,767.28
290

$3,576.69 $4,489.73
1,032

$2,342.60 $3,873.97
2,217

$717.65 $3,109.07
344

$1,059.22 $3,179.28
320

$1,458.18 $3,483.90
301

$1,910.75 $3,875.27
324

$3,627.21 $4,548.96
949

$2,272.58 $3,891.02
2,238

$694.23 $3,023.45
391

$1,086.00 $3,345.36
324

$1,502.32 $3,555.21
332

$1,849.65 $3,802.65
375

$3,653.29 $4,588.73
981

$2,247.01 $3,900.93
2,403

79

Statistical Section Average Monthly Benefit Payment for New Retirees - PSERS

2001 Average Monthly Benefit Number of Retirees
2002 Average Monthly Benefit Number of Retirees
2003 Average Monthly Benefit Number of Retirees
2004 Average Monthly Benefit Number of Retirees
2005 Average Monthly Benefit Number of Retirees
2006 Average Monthly Benefit Number of Retirees
2007 Average Monthly Benefit Number of Retirees
2008 Average Monthly Benefit Number of Retirees
2009 Average Monthly Benefit Number of Retirees
2010 Average Monthly Benefit Number of Retirees

10-15

Years of Credited Service

16-20

21-25

26-30

Over 30

Total

$136.87 279

$205.29 163

$265.82 177

$324.14 118

$422.14 100

$237.95 837

$139.82 256

$194.45 168

$271.54 136

$318.18 113

$419.65 68

$229.26 741

$137.89 292

$201.29 148

$258.92 124

$328.44 88

$419.56 97

$229.32 749

$138.46 357

$202.25 182

$273.64 145

$324.25 112

$421.35 89

$225.69 885

$140.98 322

$203.00 197

$269.23 131

$325.73 113

$422.95 93

$229.90 856

$137.90 347

$206.87 206

$265.04 127

$324.20 84

$413.20 115

$226.26 879

$143.42 323

$208.47 174

$265.12 106

$331.55 89

$426.70 93

$229.16 785

$149.91 362

$219.81 199

$279.58 116

$349.05 99

$439.31 98

$238.04 874

$156.52 391

$224.92 200

$289.93 157

$357.58 91

$460.04 90

$242.89 929

$157.66 448

$224.92 200

$300.93 162

$359.24 76

$464.07 105

$243.41 1001

Note: PSERS is not a final average pay plan.

80

Statistical Section

Average Monthly Benefit Payment for New Retirees - GJRS

2001
Average Monthly Benefit Average Final Average Salary Number of Retirees
2002
Average Monthly Benefit Average Final Average Salary Number of Retirees
2003
Average Monthly Benefit Average Final Average Salary Number of Retirees
2004
Average Monthly Benefit Average Final Average Salary Number of Retirees
2005
Average Monthly Benefit Average Final Average Salary Number of Retirees
2006
Average Monthly Benefit Average Final Average Salary Number of Retirees
2007
Average Monthly Benefit Average Final Average Salary Number of Retirees
2008
Average Monthly Benefit Average Final Average Salary Number of Retirees
2009
Average Monthly Benefit Average Final Average Salary Number of Retirees
2010
Average Monthly Benefit Average Final Average Salary Number of Retirees

10-15

16-20

Years of Credited Service

21-25

26-30

Over 30

Total

$4,841.33 $8,529.42
2

$6,163.12 $8,529.42
4

$5,278.58 $7,232.43
9

$746.60 $1,000.00
1

$1,505.22 $2,016.09
1

$3,706.97 $5,461.47
17

0

$6,304.79

$6,380.10

$6,739.14

0

$8,506.83

$8,586.58

$9,026.44

0

3

2

2

0

$6,474.68

0

$8,706.62

0

7

0

$6,770.75

$4,531.83

$7,140.57

$5,439.24

$5,970.60

0

$8,460.17

$6,376.87

$9,564.12

$7,285.35

$7,921.63

0

6

2

4

1

13

$4,748.43 $9,137.11
1

$2,916.48 $5,997.81
3

$7,084.78 $9,564.12
1

$7,140.57 $9,564.12
1

0

$5,472.57

0

$8,565.79

0

6

$4,918.69 $9,420.45
2

$5,972.47 $8,785.09
8

$6,854.45 $9,481.56
10

$5,422.44 $7,262.55
3

0

$5,792.01

0

$8,737.41

0

23

$1,648.42

0

$7,018.67

0

0

$4,333.55

$3,680.42

0

$8,421.30

0

0

$6,050.86

1

0

1

0

0

2

$4,635.56 $7,888.25
4

$1,821.81 $8,213.52
3

$5,338.65 $7,150.62
3

$7,603.57 $10,184.26
1

0

$4,849.90

0

$8,359.16

0

11

$2,485.43 $6,662.15
4

0

$7,368.55

$4,735.08

0

$9,934.33

$6,342.20

0

2

2

0

$4,863.02

0

$7,646.23

0

8

$4,874.28 $9,519.58
8

$5,883.17 $8,825.88
5

$7,366.55 $10,071.58
7

$6,630.61 $8,881.08
5

$7,639.64 $10,232.57
2

$6,478.85 $9,506.14
27

$6,337.43 $10,490.01
1

$4,563.90 $7,018.08
5

$7,643.86 $10,490.01
2

$6,422.80 $8,602.74
4

0

$6,242.00

0

$9,150.21

0

12

81

Statistical Section

Average Monthly Benefit Payment for New Retirees - LRS

2001 Average Monthly Benefit Number of Retirees
2002 Average Monthly Benefit Number of Retirees
2003 Average Monthly Benefit Number of Retirees
2004 Average Monthly Benefit Number of Retirees
2005 Average Monthly Benefit Number of Retirees
2006 Average Monthly Benefit Number of Retirees
2007 Average Monthly Benefit Number of Retirees
2008 Average Monthly Benefit Number of Retirees
2009 Average Monthly Benefit Number of Retirees
2010 Average Monthly Benefit Number of Retirees

8 - 14

Years of Credited Service

15 - 19

20 - 24

25 - 29 30 & over

Total

$305.10 6

0 $558.06 $813.89 $800.44 $619.37

0

1

2

2

9

$297.30 $537.58

0

0

0 $417.44

5

1

0

0

0

6

$321.39 8

$459.05 5

$625.33 6

0 $945.96 $587.93

0

3

22

$258.71 $553.70

0

0

0 $406.21

6

2

0

0

0

8

$358.41 $456.84

0

0 $981.11 $598.79

9

2

0

0

8

19

$355.63 $517.30

0

0

0 $436.47

3

3

0

0

0

6

$256.96 5

$476.39 5

$762.02 2

$939.00 $1,195.52

1

1

$725.98 14

$324.74 $604.63 $698.86

0

0 $542.74

4

4

2

0

0

10

$425.39 2

$650.99 1

0 $921.00 $1,203.00 $800.10

0

2

3

8

$372.93 $558.00

0

0

0 $465.47

8

1

0

0

0

9

Note: LRS is not a final average pay plan.

82

Statistical Section

Average Monthly Benefit Payment for New Retirees - GMPF

2003 Average Monthly Benefit Number of Retirees
2004 Average Monthly Benefit Number of Retirees
2005 Average Monthly Benefit Number of Retirees
2006 Average Monthly Benefit Number of Retirees
2007 Average Monthly Benefit Number of Retirees
2008 Average Monthly Benefit Number of Retirees
2009 Average Monthly Benefit Number of Retirees
2010 Average Monthly Benefit Number of Retirees

Years of Credited Service

20-25

26 - 30 Over 30

Total

$57.50 4

$90.00 4

$100.00 12

$82.50 20

$59.44 9

$81.54 13

$100.00 23

$80.33 45

$54.00 5

$83.57 7

$100.00 28

$79.19 40

$61.25 4

$85.00 13

$100.00 44

$82.08 61

$60.83 6

$83.46 13

$100.00 54

$81.43 73

$55.63 8

$83.61 18

$100.00 47

$79.75 73

$59.50 20

$87.63 19

$100.00 53

$82.38 92

$63.82 17

$85.83 18

$100.00 56

$83.22 91

Note: GMPF is not a final average pay plan.

83

Statistical Section
Top Participatory Employers
ERS
Department of Corrections Department of Behavoiral Health and Developmental Disability Department of Transportation Department of Labor Department of Juvenile Justice Department of Natural Resources Department of Revenue Department of Human Resources Department of Driver Services Department of Community Health
Total top Employers Total ERS Member Count
PSERS
Gwinnett County Schools Cobb County Schools Dekalb County Schools Clayton County Schools Muscogee County Schools Henry County Schools Cherokee County Schools Forsyth County Schools Richmond County Schools Paulding County Schools
Total top Employers Total PSERS Member Count
GJRS
Council of Superior Court Judges Council of State Court Judges Council of Juvenile Judges Prosecuting Attorney's Council
Total top Employers Total JRS Member Count
Data from 9 years prior is unavailable.

Member Count % of total plan

12,527 6,869 4,846 3,867 3,679 2,079 1,154 1,942 1,674 1,351
39,988 68,567

18.2% 10.0%
7.1% 5.7% 5.4% 3.0% 1.7% 2.8% 2.4% 2.0%
58.3%

3,931 2,471 2,234 1,382
970 909 902 894 877 715
15,285 39,962

9.8% 6.2% 5.6% 3.4% 2.4% 2.3% 2.3% 2.2% 2.2% 1.8%
38.2%

203

41.0%

108

21.8%

71

14.4%

96

19.4%

478

96.6%

495

84

Statistical Data at June 30, 2010

System ERS
PSERS GJRS LRS GDCP

Net Assets

$

11 billion

615.3 million 271.4 million 24.8 million 98.5 millon

Employer Contributions
Old Plan: 10.41% New Plan: 10.41%
GSEPS 6.54% ($263.1 mil)

Employee Contributions
Old Plan: 6% (with 4.75% pickup)
New Plan: 1.25% ($42.1 mil)
GSEPS: 1.25%

Active Members
Old Plan: (6%) 2,668 New Plan: (94%) 59,060
GSEPS: 6,839 Total: 68,567

Retirees
Total: 38,518 Service: 30,099 Beneficiary: 2,016 Disability: 5,546 Inv. Sep.: 712 Law. Enf.: 145

$5.5 million

$36 yr ($1.5 million)

39,962

13,995

3.85% ($3.4 million)

7.5% +2.5% Spousal
($5 million)

495

206

8.5%

($75 thousand) (with 4.75% pickup)

216

235

($318 thousand)

None

7.5% ($16 million)

16,502

1

SCJRF

736 thousand

$1.2 million

None

None

27

Annual Payment
$1.1 billion

Average Monthly Benefit
$2403

$53.2 million $12.4 million $1.7 million
NA $1.9 million

$317 $5,007 $633
NA $5,864.20

Statistical Section

DARF SEAD GMPF

2 thousand

$80 thousand

None

836.6 million

None

New Plan: 0.25% Old Plan: 0.50%

6.7 million

$1.4 million

None

None
No. Insured: 62,191
Not maintained By ERS

7

$80 thousand

No. Insured: 33,879

No. of Claims: 947 Amt.Pd: $28.5 mil

480

$489 thousand

$952 $30,095
$85

85

E RSGA

Serving those who serve Georgia

Employees' Retirement System of Georgia