Employees' Retirement System of Georgia Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 A component unit of the State of Georgia Celebrating 70 Years of Service 2 2020 Our Mission Our mission is to be the guardian of the State of Georgia's retirement plans and promote a dignified retirement for the members, retirees, and their beneficiaries. Our vision is to demonstrate an unwavering commitment to delivering accurate and timely retirement benefits utilizing a knowledgeable staff and state-of-the-art technology to best serve the retirement needs of current and future members. Our Values Our Core Values are: Integrity Customer Service Operational Excellence Continuous Improvement and Innovation Employees' Retirement System of Georgia Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 A component unit of the State of Georgia Serving Those Who Serve Georgia James A. Potvin Executive Director Table of Contents Introductory Section Boards of Trustees 4 Letter of Transmittal 5 Certificate of Achievement for Excellence in 9 Financial Reporting PPCC Recognition Award for Funding 10 Administrative Staff and Organization 11 Organizational Chart 12 Financial Section Independent Auditors' Report 14 Management's Discussion and Analysis (Unaudited) 16 Basic Financial Statements: Combining Statement of Fiduciary Net Position as of 24 June 30, 2020 Defined Benefit Plans-Combining Statement of 25 Fiduciary Net Position as of June 30, 2020 Combining Statement of Changes in Fiduciary Net 26 Position for the Year Ended June 30, 2020 Defined Benefit Plans-Combining Statement of Changes 27 in Fiduciary Net Position for the Year Ended June 30, 2020 Statement of Net Position-State Employees' Assurance 28 Department Active Members Fund Statement of Revenues, Expenses, and Changes in Net 29 Position-State Employees' Assurance Department Active Members Fund Statement of Cash Flows-State Employees' Assurance 30 Department Active Members Fund Notes to Financial Statements 31 Required Supplementary Information (Unaudited): Defined Benefit Plans: Schedule of Employers' and Nonemployer 70 Contributions Schedules of Employers' and Nonemployer Net 72 Pension/OPEB Liability and Related Ratios Schedules of Changes in Employers' and 74 Nonemployer Net Pension/OPEB Liability Schedule of Investment Returns 80 Schedules of the Systems' Proportionate Share 81 of the Net OPEB Liability Schedules of the System's Contributions to OPEB Plans 82 Notes to Required Supplementary Information (Unaudited) 83 Additional Information: Schedule of Administrative Expenses 88 Contributions and Expenses Schedule of Investment Expenses 89 Investment Section Investment Overview 91 Pooled Investment Fund/Rates of Return 92 Asset Allocation at Fair Value/Investment Summary 93 Schedule of Fees and Commissions 94 Twenty Largest Equity Holdings 95 Top 10 Fixed Income Holdings 96 Actuarial Section Actuary's Certification Letters 98 Summary of Plan Provisions 110 Summary of Actuarial Assumptions 112 Active Members 124 Member and Employer Contribution Rates 126 Defined Benefit Plans-Schedules of Funding Progress 128 Schedule of Retirees Added to and Removed from Rolls 130 Analysis of Change in Unfunded Accrued Liability (UAL) 132 Solvency Test Results 135 Statistical Section Introduction 138 Additions by Source-Contribution/Investment Income 139 Deductions by Type 142 Changes in Fiduciary Net Position 146 Number of Retirees 148 Average Monthly Payments to Retirees 149 Annual Benefit 150 Withdrawal Statistics 151 Average Monthly Benefit Payment for New Retirees 152 Retired Members by Retirement Type 157 Retired Members by Optional Form of Benefit 159 Principal Participating Employers 163 Schedule of Revenue and Expenses-State 165 Employees' Assurance Department Active Members Fund Schedule of Membership-State Employees' 166 Assurance Department Active Members Fund Statistical Data at June 30, 2020 167 Appendix 168 Introductory Section Celebrating 70 Years of Service Board Chair Eli Niepoky and Executive Director Jim Potvin Introductory Section Boards of Trustees as of September 30, 2020 Employees' Retirement System, Legislative Retirement System, Georgia Defined Contribution Plan, and Georgia Military Pension Fund Eli P. Niepoky Chair Frank F. Thach, Jr. Vice-Chair Lonice Barrett Steve McCoy Greg S. Griffin Public School Employee Retirement System* Alex Atwood Homer Bryson State Employees' Assurance Department** Michael Lowe Richard Taylor Mark Butler Georgia Judicial Retirement System* Vacant Ellen S. Golden Ron Mullins Vacant *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 Greg S. Griffin, Steve McCoy, Eli P. Niepoky, and Alex Atwood serve in addition to the two members shown above. 4 Introductory Section Letter of Transmittal September 30, 2020 Two Northside 75 Atlanta, GA 30318 I am pleased to present the Comprehensive Annual Financial Report of the retirement systems and programs administered by the Employees' Retirement System of Georgia (the System) for the fiscal year ended June 30, 2020. The management of 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 The System was established in 1949 by an Act of the Georgia General Assembly to provide benefits for all State employees. 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 System is responsible for administering a Group Term Life Insurance Plan (SEAD), the 457 Plan established in 1974, and the 401(k) Plan established in 1994. A summary of each plan can be found on pages 31 through 41 of this report. The investments of all plans are pooled together into one fund except for the three defined contribution (DC) plans, which are maintained individually. the state. There were 71,716 participants in the 401(k) plan with a total investment balance of $1.3 billion. The 457 plan had 12,331 participants with a total investment balance of $644.3 million. There are 470 participating employers from around the state in the 457 and 401(k) plans. Legislation The Georgia General Assembly, which adjourned June 26, 2020 after a three-month hiatus due to COVID-19, passed four Acts affecting the System as it relates to the defined benefit and defined contribution programs it administers. Act 371 provides for retirement plan membership for the judge and employees of the recently established Statewide Business Court. Specifically, this bill allows individuals employed full-time as a judge for the Business Court to be eligible for JRS membership, while all other Business Court employees are eligible for membership in ERS. This is a fiscal retirement bill which was found to have no cost to either ERS or JRS. Act 383 changes the required plan membership of new Legislative Counsel for the General Assembly from ERS to JRS for all those employed on or after July 1, 2020. It also allows for current ERS members of Legislative Counsel to elect and continue membership in JRS for such employment. A fiscal retirement bill, Act 383 has a firstyear cost to ERS of $26,000 which is required by law to be appropriated and was concurrently funded in the FY21 Budget (Act 404). The ERS, LRS, GDCP, GMPF, 401(k), and 457 plans are governed by a 7-member Board of Trustees (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, 2020, the System's defined benefit (DB) plans served a total of 106,628 active members and 74,395 retirees/beneficiaries from 697 employers around Act 386 allows for ERS members, after meeting specific requirements, to purchase and receive credit for all service under the Georgia Defined Contribution Program (GDCP) which was immediately prior to ERS membership. It also provides for a payment plan option to be implemented in order to pay for such service. This is a fiscal retirement bill which was found to have no cost to either ERS or GDCP as the member is required to cover full actuarial cost. (continued) 5 Introductory Section Letter of Transmittal Act 510 requires employers who hire retirees of the ERS to pay both the employer and employee contributions associated with such employment. The retiree will not accrue any additional service credit and their retirement benefit will be suspended after working 1,040 hours in a calendar year. Exceptions apply for employment with an independent contractor. This is a nonfiscal retirement bill having no financial impact on the System and is effective January 1, 2021. All fiscal retirement bills are effective July 1, 2020 by law; however, nonfiscal bills become effective when the Governor signs the bill or upon enactment (if the legislation is neither signed nor vetoed). Bills signed before July 1 are effective July 1 of such year, whereas any bills enacted after July 1 and through the end of the calendar year are effective January 1 of the following year. markets while controlling the downside risks. This has proven to be a successful strategy for other markets and for the System. For further information on investments of the pooled fund, please refer to the Investment Section on pages 90 through 96 of this report. The objective of the System's pension trust funds is to meet long-term 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 pages 128 and 129. The latest actuarial valuations as of June 30, 2019 showed the funded ratio of four of the five of the defined benefit plans increasing. The following table shows the change in funding percentage for each of the pension systems: FY2018 FY2019 Summary of Financial Information The management of the System is charged with the responsibility of maintaining a sound system of internal accounting controls. The objectives of such a system are to provide management with reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations, and that they are recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. The concept of reasonable assurance recognizes that first, the cost of a control should not exceed the benefits likely to be derived, and second, the evaluation of the cost and benefits requires estimates and judgments by management. Even though there are inherent limitations in any system of internal control, the management of the System makes every effort to ensure that through systematic reporting and internal reviews, error or fraud would be quickly detected and corrected. Please refer to the Management's Discussion and Analysis starting on page 16 of this report for an overview of the financial status of the System, including a summary of the System's Fiduciary Net Position, Changes in Fiduciary Net Position, and Asset Allocations. For fiscal year 2020, the pooled investment fund generated a time-weighted rate of return of 5.48%. The fund continues to invest in a mix of high-quality bonds and stocks which allows the System to participate in rising ERS PSERS LRS GJRS GMPF 75.3 % 83.7 % 130.7 % 108.7 % 53.6 % 75.6 % 84.0 % 132.8 % 107.6 % 57.0 % Further information regarding the funding condition of the pension plans can be found in the Actuarial Section of this report, beginning on page 97. Excellence in Financial Reporting For the ninth consecutive year, the Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Employees' Retirement System of Georgia for its comprehensive annual financial report for the fiscal year ended June 30, 2019. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. (continued) 6 Introductory Section Letter of Transmittal Initiatives Pandemic Impact The System was fortunate in that we already had almost all of the technology infrastructure needed to transition to a mostly-teleworking environment in place before the pandemic began, including critical areas like pension payroll and the call center. We needed about a week to get a handful of individuals set up to work remotely, but the vast majority of our staff was able to telework from the day we decided to leave our office on March 13, 2020. Management quickly identified a number of business processes that required modification. Internal and external meetings are currently being conducted over teleconferencing platforms, primarily Zoom. This applies to Board meetings as well. We have not been able to see visitors in person, so counseling has been done via telephone or teleconference. To hedge against possible US Mail service interruptions, we launched a project to transition individuals who receive paper checks over to direct deposit; as a result, only just over 1% of retirees still receive a paper check. We invested in our network bandwidth to account for the additional remote workers; currently we have 6-8x the capacity we need for a typical day. The area that has been the most difficult to move out of the building is our mail services area, what we call the "Doc Center". Despite our efforts to reduce physical mail, including investing in improvements to our secure web site to allow for electronic transfer of many documents, we still see a significant amount of mail. So we divided our Doc Center staff in half, and the two halves alternated one week in the office, and one week out of the office so that mail can be scanned and put in queues for distribution and archiving. Once the mail is sorted and scanned, it can be handled remotely from that point forward. In the event of a total building closure, we have emergency procedures and equipment in place at the staff's homes so they can keep things moving. prepare for the possibility of the pandemic escalating further and completely shutting down access to our building for a period of time, but we are confident in our ability to keep serving our members at near-peak capacity regardless of the amount of time we will be teleworking. Long-term, we have a new appreciation for how technology can be used to extend our reach in communicating with our members and other constituents, and we will be able to make much better use of it in the future. This likely also applies to our staff's work schedules as well. Recent events have clearly shown that we have the ability to maintain most of our services at a high level and our long-term working schedules will likely be reflective of that reality. Member Self Service We launched our online refund application process several years ago and have been working to build awareness of the process by educating our members and employers. Our long-term goal was to ultimately have more than 95% of our refunds processed via the online application. After setting a new high in FY20 of over 75%, in early FY21 we are over 91% and very near to achieving our goal. In addition, our Retirement Online Application process, which went live in late 2018, exceeded 52% usage for ERS retirees in late FY20, a new high water mark. Plan Changes ERS is currently making two significant changes to the benefit options available to our retirees. The first is our initial foray into providing guaranteed lifetime income for defined contribution plan members. With the Supplemental Guaranteed Lifetime Income, retirees can roll over a portion or all of their 401(k) or 457 plan balances into the ERS pension fund and convert the rollover into a lifetime annuity payment. The annuity payment can be taken in any actuarially equivalent form of benefit that is offered for the regular pension benefit through the fund. We have been in close contact with our outsourcing thirdparty administrator (TPA) for our defined contribution plans and in general, we are pleased with their ability to continue their operations and administration of our plans. Overall, we are very proud of the way our staff adjusted to their remote working conditions and with their ability to keep up with all of their work. Over the course of several months, we continued to make modest investments in redundant equipment and system enhancements to The second change is the creation of an Escalating Annuity. ERS has not provided a Cost-of-Living Adjustment in about 10 years, so we decided to offer a mechanism for retirees to take a reduction in their initial benefit, but thereafter receive an increase of 2% to their monthly payment each year. Like other actuarially equivalent benefits, the amount of the initial reduction is based on the retiree's age and life expectancy at retirement. This will allow retirees to take their benefit in closer to a "constant dollar" annuity stream, thereby (continued) 7 Introductory Section Letter of Transmittal reducing the erosion of their purchasing power throughout their retirement. Other Initiatives During FY20, ERS issued an Request for Proposal for TPA outsourcing services for the Peach State Reserves plans the state's 401(k) and 457 plans. After reviewing all proposals and selecting two finalists for in-person presentations, we are very pleased to announce that we have retained Alight Solutions to continue as our outsourcing provider. At the April 2020 meeting, the Board decided to amend the ERS Funding Policy with an eye toward the future. Many of the amended provisions are unlikely to have any impact on the contributions or funding ratio of the System in the near term, but the Board regarded them as prudent safeguards for the System at a time when our funding level is higher than it is today. The amendments are: The minimum Actuarially Determined Employer Contribution (ADEC) will be no less than the Normal Cost of the system unless the system is at least 105% funded. The ADEC will not decrease by more than 2% of active member payroll from one year to the next. Any unfunded liability created by the granting of a post-retirement benefit adjustment will be amortized over a closed 15-year period. Other Information Independent Audit The Board of Trustees requires an annual audit of the financial statements of the System by independent, certified public accountants. The accounting firm of KPMG LLP was selected by the Board. The independent auditors' report on the statement of fiduciary net position and the related statement of changes in fiduciary net position is included in the Financial Section of this report. Acknowledgements 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, In 2019 we implemented a new platform for the creating of our CAFR, called WDesk. The platform provides a much more automated way of loading financial data into the CAFR template and also streamlines the editing process. With the new process, we were able to produce our 2020 CAFR a full two months earlier than we have ever been able to do so in the past. James A. Potvin, Executive Director Employees' Retirement System of Georgia 8 Introductory Section 9 Introductory Section Public Pension Coordinating Council Recognition Award for Funding 2019 Presented to Employees' Retirement System of Georgia In recognition of meeting professional standards for plan funding as set forth in the Public Pension Standards. Presented by the Public Pension Coordinating Council, a confederation of National Association of State Retirement Administrators (NASRA) National Conference on Public Employee Retirement Systems (NCPERS) National Council on Teacher Retirement (NCTR) Alan H. Winkle Program Administrator 10 Introductory Section Administrative Staff and Organization James A. Potvin Executive Director Angie Surface Deputy Director Charles W. Cary, Jr. CIO - Investment Services Laura L. Lanier Controller Chris Hackett Director Information Technology Nicole Paisant Director Human Resources Susan Anderson Chief Operating Officer Carolyn Kaplan Director Financial Mgmt Quality Assurance Kelly Moody Director Legislative Affairs Danielle Templeton Director Communications Consulting Services Cavanaugh Macdonald Consulting, LLC - Actuary KPMG LLP - Auditor Alight Solutions - Defined Contribution Consultant and Administrator Investment Advisors* Albritton Capital Management Baillie Gifford Overseas Limited Barrow, Hanley, Mewhinney & Strauss Cooke & Bieler Fisher Investments Mondrian Investment Partners Limited Sands Capital Management WCM Investment Management Medical Advisors Harold E. Sours, M.D., Atlanta, GA G. Lee Cross, M.D., Atlanta, GA William H. Biggers, M.D., Atlanta, GA Pedro F. Garcia, M.D., Atlanta, GA H. Rudolph Warren, M.D., Dunwoody, GA Quinton Pirkle, M.D., Atlanta, GA Marvin Bittinger, M.D., Gainesville, GA Joseph S. Wilkes, M.D., Sandy Springs, GA Howard A. McMahan, M.D., Marietta, GA *See page 94 in the Investment Section for a summary of fees paid to investment advisors 11 Introductory Section Organizational Chart 12 Financial Section Commemorating 70 Years of Service ERSGA was recognized in the General Assembly with a resolution from both the House and the Senate. See the Appendix for the resolution text. Financial Section KPMG LLP Suite 2000 303 Peachtree Street, NE Atlanta, GA 30308-3210 Independent Auditors' Report The Board of Trustees Employees' Retirement System of Georgia: Report on the Financial Statements We have audited the accompanying financial statements of the fiduciary activities and the proprietary activity 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, 2020, and the related notes to the financial statements, which collectively comprise the System's basic financial statements for the year then ended as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the fiduciary activities and proprietary activity of the System as of June 30, 2020, and the respective changes in financial position and where applicable, cash flows thereof, for the year then ended in accordance with U.S. generally accepted accounting principles. Emphasis of Matter As discussed in Note 3(h) to the financial statements, in fiscal year 2020, the System adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 16-23 and the schedules of employers' and nonemployer contributions defined benefit plans, schedules of employers' and nonemployer net pension/OPEB liability and related ratios defined benefit plans, schedules of changes in employers' and nonemployer net pension/ OPEB liability defined benefit plans, schedule of investment returns, schedules of the System's (continued) 14 Financial Section proportionate share of the net OPEB liability, the schedules of the System's contributions to OPEB plans and the notes to the required supplementary information on pages 70-87, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the System's basic financial statements. The schedules of administrative expenses - contributions and expenses and investment expenses, and introductory, 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 - contributions and expenses and investment expenses are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Survivors Benefit Fund statement of changes in assets and liabilities and the schedules of administrative expenses contributions and expenses and investment expenses are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory, investment, actuarial, and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 30, 2020 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 solely 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 effectiveness of the System's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the System's internal control over financial reporting and compliance. Atlanta, Georgia September 30, 2020 15 Financial Section Management's Discussion and Analysis (Unaudited) June 30, 2020 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, 2020. 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 six other defined benefit pension plans, a defined benefit OPEB plan, three defined contribution plans, and a custodial fund, all of which comprise the fiduciary funds. The System is also responsible for administering an enterprise fund, which comprises the proprietary fund. 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) Superior Court Judges Retirement Fund (SCJRF) District Attorneys Retirement Fund (DARF) The defined benefit OPEB plan consists of the State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund (SEAD-OPEB). The defined contribution retirement plans include: Georgia Defined Contribution Plan (GDCP) State of Georgia Employees' Qualified Trust Deferred Compensation Plan (401(k) Plan) State of Georgia Employees' Deferred Compensation Plan (457 Plan) The custodial fund consists of the Survivors Benefit Fund (SBF). The enterprise fund consists of the State Employees' Assurance Department Active Members Fund (SEAD-Active). Overview of Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The System administers two categories of funds: fiduciary funds and a proprietary fund. Information related to the financial statements of the funds is presented in the notes to the financial statements. Fiduciary funds are used to account for resources held for the benefit of parties outside of the System. The primary focus of the System's fiduciary funds is the accumulation of resources for and the payment of pension and OPEB benefits. The System maintains four types of fiduciary funds: (1) defined benefit pension trust funds which are used to report resources held in trust for pensions for retirees and beneficiaries covered by ERS, PSERS, LRS, GJRS, GMPF, SCJRF, and DARF (2) a defined benefit OPEB trust fund, which is used to report resources held in trust for other postemployment benefits of retirees and beneficiaries covered by SEAD-OPEB (3) defined contribution pension trust funds, which are used to accumulate contributions and earnings in the accounts of participants covered by GDCP, the 401(k) Plan, and the 457 Plan, and (4) a custodial fund, which is used to report resources held by the SBF in a custodial capacity for other plans. Proprietary funds, which include enterprise and internal services funds, are used to account for the System's activities that are similar to private-sector businesses. The System maintains one proprietary fund, which is an enterprise fund, (continued) 16 Financial Section Management's Discussion and Analysis (Unaudited) SEAD-Active. The primary focus of the System's enterprise fund is the accumulation of resources for, and payment of, group term life insurance benefits for active members of ERS, LRS, and GJRS covered by SEAD-Active. The basic financial statements comprise statements for both fiduciary and proprietary funds. The fiduciary fund financial statements include (1) Combining Statement of Fiduciary Net Position (2) Defined Benefit Plans Combining Statement of Fiduciary Net Position (3) Combining Statement of Changes in Fiduciary Net Position, and (4) Defined Benefit Plans Combining Statement of Changes in Fiduciary Net Position. The proprietary fund financial statements include (1) Statement of Net Position (2) Statement of Revenues, Expenses, and Changes in Net Position and (3) Statement of Cash Flows. In addition, the System presents six types of required supplementary schedules, which provide historical trend information about the plan. Four of the schedules are presented from the perspective of the System reporting as the plan and include (1) Schedules of Employers' and Nonemployer Contributions (2) Schedules of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios (3) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability and (4) Schedule of Investment Returns. Two of the schedules are presented from the perspective of the System reporting as the employer for its employees who participate in the SEAD-OPEB and the Georgia State Employees Postemployment Benefit Fund (State OPEB Fund) and include the (5) Schedules of the System's Proportionate Share of the Net OPEB Liability and (6) Schedules of the System's Contributions to OPEB Plans. The System also includes in this report additional information to supplement the financial statements. The System prepares its financial statements on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles as promulgated by the Governmental Accounting Standards Board (GASB). These statements provide information about the System's overall financial status. Financial Highlights The highlights of the fiduciary funds of the System are as follows: The net position of the fiduciary funds increased by $85.4 million, or 0.5%, from $18.4 billion (as restated) at June 30, 2019 to $18.5 billion at June 30, 2020. The increase in net position from 2019 to 2020 was primarily due to positive fixed income and equity market returns. For the year ended June 30, 2020, the total additions to net position were $1.9 billion, compared to $2.1 billion for the year ended June 30, 2019. For the year ended June 30, 2020, the additions consisted of employer, nonemployer contributing entities (nonemployer), and member contributions totaling $945.0 million, insurance premiums of $3.1 million, net investment income of $931.9 million, and participant fees of $451.0 thousand. Net investment income of $931.9 million in 2020 (comprising interest and dividend income, the change in fair value of investments, and other, reduced by investment expenses) represents a decrease of $234.7 million, or 20.1%, compared to the net investment income of $1.2 billion for the year ended June 30, 2019. The change in net investment income was primarily due to more moderate equity gains in 2020 compared to 2019. The total deductions from net position increased by $61.8 million to $1.8 billion for the year ended June 30, 2020 compared to $1.7 billion for the year ended June 30, 2019. For the year ended June 30, 2020, the deductions primarily consisted of benefit payments. The highlights of the proprietary fund of the System are as follows: The net position of the proprietary fund increased by $13.5 million to $319.3 million at June 30, 2020 compared to $305.9 million at June 30, 2019. The increase in net position from 2019 to 2020 was primarily due to positive fixed income and equity market returns. (continued) 17 Financial Section Management's Discussion and Analysis (Unaudited) For the year ended June 30, 2020, total operating loss was $3.1 million compared to $3.0 million for the year ended June 30, 2019. The increase relates primarily to an increase in the number of active members who received death benefits during the year. Net investment income allocated from the pooled investment fund of $16.6 million in 2020 represents a decrease of $3.1 million, or 15.5%, compared to net investment income allocated from the pooled investment fund of $19.6 million for the year ended June 30, 2019. The change in investment income allocated from the pooled investment fund was primarily due to more moderate equity gains in 2020 compared to 2019. Description of the Financial Statements Fiduciary Funds The Combining Statement of Fiduciary Net Position is the statement of financial position presenting information that includes the fiduciary funds' assets and liabilities, with the balance representing the Net Position Restricted for Pensions and OPEB and SBF. The investments of the funds in this statement are presented at fair value. This statement is presented on page 24. The Combining Statement of Changes in Fiduciary Net Position reports how the fiduciary funds' net position changed during the fiscal year. The additions include contributions to the retirement plans from employers, nonemployer, and members; group term life insurance premiums; participant fees; and net investment income, which includes interest and dividends and the net increase in the fair value of investments, net of investment expenses. 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 26. The Defined Benefit Plans' Combining Statement of Fiduciary Net Position and the Combining Statement of Changes in Fiduciary Net Position present the financial position and changes in financial position for each of the defined benefit plans administered by the System. These statements are on pages 25 and 27, respectively. Proprietary Funds The Statement of Net Position is the statement of financial position presenting information that includes the assets and liabilities, with the balance representing the net position. This statement is presented on page 28. The Statement of Revenues, Expenses, and Changes in Net Position distinguishes operating revenues and expenses from nonoperating items. Principal operating revenues result from insurance premiums from members, while operating expenses result from death benefit payments and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. This statement is presented on page 29. The Statement of Cash Flows provides information about cash receipts and cash payments during the year. When used in conjunction with related disclosures and information in the other financial statements, the statement provides relevant information about the plan's ability to generate future net cash flows, the plan's ability to meet its obligations as they come due, and presents the reasons for differences between operating income and associated cash receipts and payments. This statement is presented on page 30. Notes to 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 31. (continued) 18 Financial Section Management's Discussion and Analysis (Unaudited) Required Supplementary Information begins on page 70. The required schedules are discussed as follows: The Schedule of Employers' and Nonemployer Contributions presents historical trend information for the last 10 consecutive fiscal years about the required contributions and the percent of required contributions actually contributed. The Schedule of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios presents the components of the net pension/OPEB liability as of the fiscal year end and the fiduciary net position as a percentage of the total pension/OPEB liability as of that date. This trend information will be accumulated to display a 10-year presentation. The Schedule of Changes in Employers' and Nonemployer Net Pension/OPEB Liability presents total net pension/OPEB liability and is measured as total pension/OPEB liability less the amount of the fiduciary net position. This trend information will be accumulated to display a 10-year presentation. The Schedule of Investment Returns presents historical trend information about the annual money-weighted rate of return on plan investments, net of plan investment expense. This trend information will be accumulated to display a 10-year presentation. The Schedule of the System's Proportionate Share of the Net OPEB Liability presents historical trend information about the System's proportionate share of the net OPEB liability (asset) for its employees who participate in the SEAD-OPEB plan and the State OPEB Fund. This trend information will be accumulated to display a 10-year presentation. The Schedule of the System's Contributions to OPEB Plans presents historical trend information about the System's contributions for its employees who participate in the SEAD-OPEB plan and the State OPEB Fund. This trend information will be accumulated to display a 10-year presentation. Three of the required schedules above, the Schedules of Employers' and Nonemployer Contributions, the Schedules of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios, and the Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability are applicable to five of the defined benefit pension plans (ERS, PSERS, LRS, GJRS, and GMPF) and the defined benefit OPEB plan (SEAD-OPEB). Notes to Required Supplementary Information are presented to provide the information necessary for a full understanding of the supplementary schedules. The notes to required supplementary information begin on page 83. Additional information is presented, beginning on page 88, and includes two schedules. The first schedule is the Schedule of Administrative Expenses Contributions and Expenses and presents the expenses incurred in the administration of the plans and funds, and the contributions from each plan and fund to provide for these expenses. The second schedule is the Schedule of Investment Expenses and presents the expenses incurred in the management of the System's investments. (continued) 19 Financial Section Management's Discussion and Analysis (Unaudited) Financial Analysis of the System A summary of the System's net position of the fiduciary funds at June 30, 2020 is as follows (dollars in thousands): Assets: Cash, cash equivalents, and receivables Investments Capital assets, net Net OPEB asset Total assets Deferred outflows of resources Net position 2020 2019 (as restated)1 Amount change Percentage change $ 360,965 18,495,992 6,568 569 18,864,094 681 533,422 18,226,094 6,552 541 18,766,609 1,156 (172,457) 269,898 16 28 97,485 (475) (32.3)% 1.5 0.2 5.2 0.5 (41.1) Liabilities: Due to brokers, accounts payable, and insurance premiums payable Due to other funds/plans and participating systems Net OPEB liability Total liabilities Deferred inflows of resources Net position $ 35,902 319,146 2,350 357,398 3,194 18,504,183 36,003 305,795 4,749 346,547 2,389 18,418,829 (101) 13,351 (2,399) 10,851 805 85,354 1Refer to Significant Accounting Policies and System Asset Matters - Changes in Accounting Principal section for details. (0.3) 4.4 (50.5) 3.1 33.7 0.5 % A summary of the System's net position of the proprietary fund at June 30, 2020 is as follows (dollars in thousands): Assets: Cash, cash equivalents, and receivables Investments Total assets Liabilities: Accounts payable and other Net position Net position 2020 2019 Amount change Percentage change $ 241 319,146 319,387 124 305,795 305,919 117 13,351 13,468 94.4 % 4.4 4.4 47 $ 319,340 42 305,877 5 13,463 11.9 4.4 % (continued) 20 Financial Section Management's Discussion and Analysis (Unaudited) The following table presents the investment allocation at June 30, 2020, and 2019: Asset allocation at June 30 (in percentages): Equities: Domestic International Private equity Domestic obligations: U.S. treasuries Corporate and other bonds International obligations: Corporates Commingled funds Asset allocation at June 30 (in thousands): Equities: Domestic International Private equity Domestic obligations: U.S. treasuries Corporate and other bonds International obligations: Corporates Mutual funds Commingled funds 2020 46.7 % 14.3 2.0 19.4 6.3 1.1 10.2 2019 45.8 % 15.3 1.8 20.8 6.1 0.5 9.7 $ 8,641,627 $ 8,350,863 2,636,114 2,786,569 365,458 335,306 3,584,895 1,162,433 3,784,262 1,104,643 212,119 7,498 1,885,848 95,134 8,114 1,761,203 $ 18,495,992 $ 18,226,094 The total investment portfolio increased by $269.9 million, or 1.5%, from 2019, which is due to positive fixed income and equity market returns. Investment performance is calculated using a time-weighted rate of return using the Daily Valuation Method. The timeweighted rate of return for the fiscal year ended June 30, 2020, was 5.5% with a 3.2% return for equities, a 6.4% return for private equity, and a 9.9% return for fixed income. The five-year annualized rate of return at June 30, 2020, was 7.0% with an 8.2% return for equities, an 11.4% return for private equity, and a 4.1% return for fixed income. A money-weighted return is weighted by the amount of dollars in the fund at the beginning and end of the performance period. A money-weighted return is highly influenced by the timing of cash flows into and out of the fund and is a better measure of an entity or person who controls the cash flows into or out of the fund. The nondiscretionary cash flows for the plan, primarily contributions and benefit payments, have a considerable impact on the money-weighted returns of the portfolio. The money-weighted rate of return for the fiscal year ended June 30, 2020, was (3.6)%, compared to (1.8)% for the fiscal year ended June 30, 2019. (continued) 21 Financial Section Management's Discussion and Analysis (Unaudited) A summary of the changes in the System's net position of the fiduciary funds for the year ended June 30, 2020 is as follows (dollars in thousands): Additions: Employer contributions Nonemployer contributions Member contributions Participant fees Insurance premiums Net investment income Other Total additions Changes in net position 2020 2019 (as restated)1 Amount change Percentage change $ 692,253 44,687 208,018 451 3,088 931,916 14 1,880,427 692,481 42,620 198,928 597 3,328 1,166,626 13 2,104,593 (228) 2,067 9,090 (146) (240) (234,710) 1 (224,166) -- % 4.9 4.6 (24.5) (7.2) (20.1) 7.7 (10.7) Deductions: Benefit payments Refunds Death benefits Administrative expenses Total deductions Net increase in net position 1,715,693 17,960 44,754 16,666 1,795,073 $ 85,354 1,660,330 19,854 37,421 15,620 1,733,225 371,368 55,363 (1,894) 7,333 1,046 61,848 (286,014) 3.3 (9.5) 19.6 6.7 3.6 (77.0)% 1 Refer to Significant Accounting Policies and System Asset Matters - Changes in Accounting Principal section for details. Additions The System accumulates resources needed to fund benefit payments through contributions and returns on invested funds. In fiscal year 2020, total contributions increased $10.9 million, or 1.2%, primarily due to modest overall salary increases. Net investment income decreased by $234.7 million, or 20.1%, due primarily to equity returns moderating somewhat in fiscal year 2020 compared to 2019. Deductions For fiscal year 2020, total deductions increased $61.8 million, or 3.6%, primarily because of an increase of $55.4 million, or 3.3%, in benefit payments. Pension benefit payments increased due to an increase in the number of retirees and beneficiaries receiving benefits in 2020 in addition to cost of living adjustments of 1.5% for PSERS members and two one-time benefit payments of 3% for ERS, JRS, and LRS members. Death benefits increased by $7.3 million, or 19.6%, which was primarily due to an increase in the number of death claims processed during 2020. Refunds decreased by $1.9 million, or 9.5%, which was primarily due to a decrease in the number of refunds processed during 2020. Administrative expenses increased by $1.0 million over the prior year, or 6.7%, primarily due to increased contractual services costs and health insurance costs related to a payment holiday given in the prior year. (continued) 22 Financial Section Management's Discussion and Analysis (Unaudited) A summary of the changes in the System's net position of the proprietary fund for the year ended June 30, 2020 is as follows (dollars in thousands): Operating revenue: Insurance premiums Total operating revenue Changes in net position 2020 2019 Amount change Percentage change $ 547 531 547 531 14 2.7 % 14 2.7 Operating expenses: Death benefits Administrative expenses Total operating expenses Total operating loss 3,588 80 3,668 (3,121) 3,424 80 3,504 (2,973) 164 1 164 (150) 4.8 1.0 4.7 (5.0) Nonoperating revenue: Allocation of investment income from pooled investment fund, net Change in net position $ 16,584 13,463 19,643 16,670 (3,059) (3,209) (15.6) (19.2) % Operating and nonoperating revenue The proprietary fund accumulates resources needed to fund death benefit payments through premiums earned and returns on invested funds. In fiscal year 2020, total premiums earned increased $14 thousand, or 2.7%, primarily due to modest overall salary increases. Effective January 1, 2009, the plan was closed to new members. Allocation of investment income from the pooled investment fund, net of related expenses, decreased by $3.1 million, or 15.6%, primarily due to equity returns moderating somewhat in fiscal year 2020 compared to 2019. Operating expenses For fiscal year 2020, death benefits increased by $164 thousand, or 4.8%, which was primarily due to an increase in the number of death claims processed during 2020. Administrative expenses increased by $783.30 over the prior year, or 1.0%, primarily due to increased contractual services costs. Requests for Information 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. 23 Financial Section Combining Statement of Fiduciary Net Position June 30, 2020 (In thousands) Assets Cash and cash equivalents Receivables: Contributions Interest and dividends Due from brokers for securities sold Other Unremitted insurance premiums Total receivables Investments - at fair value: Domestic obligations: U.S. treasuries Corporate and other bonds International obligations: Corporates Equities: Domestic International Private equity Mutual funds Commingled funds Equity in pooled investment fund Total investments Capital assets, net Net OPEB asset Total assets Deferred outflows of resources Liabilities Accounts payable and other Due to brokers for securities purchased Insurance premiums payable Due to participating systems Net OPEB liability Total liabilities Deferred inflows of resources Net position restricted for: Pensions and OPEB Survivors Benefit Fund See accompanying notes to financial statements. Defined benefit plans $ 33,024 Pooled Investment Fund 202,930 Defined contribution plans Georgia Defined Contribution Plan 401(k) Plan 22,768 16,213 457 Plan 1,297 30,309 -- -- 2,640 449 33,398 -- 41,704 4,030 -- -- 45,734 740 3,641 405 425 2 5 -- -- -- -- 487 259 -- -- -- 1,165 4,130 669 Custodial fund Survivors Benefit Fund 86 Eliminations -- -- -- -- -- -- -- -- -- -- (449) -- (449) -- -- -- -- -- -- -- -- 16,220,640 16,220,640 6,568 569 16,294,199 681 22,093 -- 518 -- 2,350 24,961 3,194 $ 16,266,725 $ -- 3,492,304 1,140,493 212,119 8,622,857 2,634,196 365,458 -- -- -- 16,467,427 -- -- 16,716,091 -- 2,106 6,840 -- 16,707,145 -- 16,716,091 -- -- -- 92,591 21,940 -- -- -- -- -- -- -- 114,531 -- -- 138,464 -- 508 -- -- -- -- 508 -- 137,956 -- -- -- -- 11,466 582 -- 3,506 1,254,153 -- 1,269,707 -- -- 1,290,050 -- 2,959 -- -- -- -- 2,959 -- 1,287,091 -- -- -- -- 7,304 1,336 -- 3,992 631,695 -- 644,327 -- -- 646,293 -- 1,327 -- -- -- -- 1,327 -- 644,966 -- -- -- -- -- -- -- -- -- 167,359 167,359 -- -- 167,445 -- -- -- -- -- -- -- -- -- 167,445 -- -- -- -- -- -- -- -- (16,387,999) (16,387,999) -- -- (16,388,448) -- -- -- (449) (16,387,999) -- (16,388,448) -- -- -- Total 276,318 35,095 42,136 4,030 3,386 -- 84,647 3,584,895 1,162,433 212,119 8,641,627 2,636,114 365,458 7,498 1,885,848 -- 18,495,992 6,568 569 18,864,094 681 28,993 6,840 69 319,146 2,350 357,398 3,194 18,336,738 167,445 24 Financial Section Defined Benefit Plans - Combining Statement of Fiduciary Net Position June 30, 2020 (In thousands) Assets Cash and cash equivalents Receivables: Contributions Interest and dividends Due from brokers for securities sold Other Unremitted insurance premiums Total receivables Investments - at fair value: Domestic obligations: U.S. treasuries Corporate and other bonds International obligations: Corporates Equities: Domestic International Private equity Mutual funds Commingled funds Equity in pooled investment fund Total investments Capital assets, net Net OPEB asset Total assets Deferred outflows of resources Liabilities Accounts payable and other Due to brokers for securities purchased Insurance premiums payable Due to participating systems Net OPEB liability Total liabilities Deferred inflows of resources Net position restricted for pensions and OPEB Defined benefit pension plans Employees' Retirement System $ 31,734 Public School Employees Retirement System 266 Legislative Retirement System 80 Georgia Judicial Retirement System 601 Georgia Military Pension Fund 48 29,843 1 -- 465 -- -- -- -- -- -- -- -- -- -- -- 2,375 265 -- -- -- -- -- -- -- -- 32,218 266 -- 465 -- -- -- -- -- -- -- -- -- 13,456,293 13,456,293 6,568 569 13,527,382 681 19,726 -- 507 -- 2,350 22,583 3,194 $ 13,502,286 -- -- -- -- -- -- -- -- 958,718 958,718 -- -- 959,250 -- 1,002 -- -- -- -- 1,002 -- 958,248 -- -- -- -- -- -- -- -- 34,599 34,599 -- -- 34,679 -- 110 -- 1 -- -- 111 -- 34,568 -- -- -- -- -- -- -- -- 485,633 485,633 -- -- 486,699 -- 759 -- 10 -- -- 769 -- 485,930 -- -- -- -- -- -- -- -- 28,995 28,995 -- -- 29,043 -- 76 -- -- -- -- 76 -- 28,967 Superior Court Judges Retirement Fund 10 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 10 -- 4 -- -- -- -- 4 -- 6 District Attorneys Retirement Fund 2 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2 -- -- -- -- -- -- -- -- 2 Defined benefit OPEB plan State Employees' Assurance Department OPEB 283 -- -- -- -- 449 449 -- -- -- -- -- -- -- -- 1,256,402 1,256,402 -- -- 1,257,134 -- 416 -- -- -- -- 416 -- 1,256,718 Defined benefit plans total 33,024 30,309 -- -- 2,640 449 33,398 -- -- -- -- -- -- -- -- 16,220,640 16,220,640 6,568 569 16,294,199 681 22,093 -- 518 -- 2,350 24,961 3,194 16,266,725 See accompanying notes to financial statements. 25 Financial Section Combining Statement of Changes in Fiduciary Net Position Year ended June 30, 2020 (In thousands) Defined contribution plans Custodial fund Additions: Contributions: Employer Nonemployer Member Participant fees Insurance premiums Administrative expense allotment Investment income: Net increase in fair value of investments Interest and dividends Other Less investment expenses Allocation of investment income Net investment income Total additions Deductions: Benefit payments Refunds of member contributions and interest Death benefits Administrative expenses Total deductions Change in net position Net position restricted for pension and OPEB and SBF: Beginning of year (as restated) End of year Defined benefit plans Pooled Investment Fund Georgia Defined Contribution Plan 401(k) Plan 457 Plan Survivors Benefit Fund $ 641,115 44,687 43,505 -- 3,088 14 -- 10 -- (10,186) 857,900 847,724 1,580,133 1,583,264 7,450 44,754 11,192 1,646,660 (66,527) 16,333,252 $ 16,266,725 -- -- -- -- -- -- 525,960 364,852 -- (7,560) (883,252) -- -- -- -- -- -- -- -- -- -- -- 51,138 -- -- -- -- -- -- 14,658 129,639 20,216 -- -- 426 25 -- -- -- -- -- -- -- -- -- 6,323 2,823 -- (68) -- 9,078 23,736 42,324 170 713 (2,357) -- 40,850 222,053 25,677 95 703 (912) -- 25,563 45,804 -- -- -- -- 8,701 8,701 8,701 7 10,510 -- 913 11,430 12,306 92,355 -- -- 3,816 96,171 125,882 40,067 -- -- 745 40,812 4,992 -- -- -- -- -- 8,701 125,650 137,956 1,161,209 1,287,091 639,974 644,966 158,744 167,445 See accompanying notes to financial statements. Total 692,253 44,687 208,018 451 3,088 14 600,284 367,950 1,416 (21,083) (16,651) 931,916 1,880,427 1,715,693 17,960 44,754 16,666 1,795,073 85,354 18,418,829 18,504,183 26 Financial Section Defined Benefit Plans - Combining Statement of Changes in Fiduciary Net Position Year ended June 30, 2020 (In thousands) Additions: Contributions: Employer Nonemployer Member Participant fees Insurance premiums Administrative expense allotment Investment income: Net increase 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 Defined benefit pension plans Legislative Retirement System Georgia Judicial Retirement System Georgia Military Pension Fund Superior Court Judges Retirement Fund District Attorneys Retirement Fund Defined benefit OPEB plan State Employees' Assurance Department OPEB Defined benefit plans total $ 634,108 -- -- 4,022 2,611 340 9,749 32,496 -- 2,442 -- -- 35,837 2,338 325 5,005 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 10 -- -- -- -- 2 -- -- -- -- -- -- 10 -- -- -- -- -- -- -- -- -- -- -- (8,961) (404) (16) (195) (6) -- 712,791 50,317 1,840 25,609 1,491 -- 703,840 49,913 1,824 25,414 1,485 -- 1,383,544 84,747 2,149 36,883 4,096 342 34 -- 641,115 -- -- 44,687 -- -- 43,505 -- -- -- -- 3,088 3,088 2 -- 14 -- -- -- -- -- 10 -- -- -- -- (604) (10,186) -- 65,852 857,900 -- 65,248 847,724 36 68,336 1,580,133 Deductions: Benefit payments Refunds of member contributions and interest Death benefits Administrative expenses Total deductions Change in net position Net position restricted for pensions and OPEB: 1,484,445 66,090 1,795 29,263 1,297 340 6,644 572 21 213 -- -- -- -- -- -- -- -- 7,641 1,424 305 849 249 2 1,498,730 68,086 2,121 30,325 1,546 342 (115,186) 16,661 28 6,558 2,550 -- Beginning of year End of year 13,617,472 941,587 34,540 479,372 26,417 6 $ 13,502,286 958,248 34,568 485,930 28,967 6 34 -- 1,583,264 -- -- 7,450 -- 44,754 44,754 2 720 11,192 36 45,474 1,646,660 -- 22,862 (66,527) 2 1,233,856 16,333,252 2 1,256,718 16,266,725 See accompanying notes to financial statements. 27 Financial Section Statement of Net Position State Employees' Assurance Department Active Members Fund June 30, 2020 (In thousands) Assets: Cash and cash equivalents $ Receivables: Unremitted insurance premiums Investments - at fair value: Equity share of pooled investment fund Total assets Liabilities: Accounts payable and other Total liabilities Total net position $ 172 69 319,146 319,387 47 47 319,340 See accompanying notes to financial statements. 28 Financial Section Statement of Revenues, Expenses, and Changes in Net Position State Employees' Assurance Department Active Members Fund Year ended June 30, 2020 (In thousands) Operating revenue: Insurance premiums $ Total operating revenue Operating expenses: Death benefits Administrative expenses Total operating expenses Total operating loss Nonoperating revenues (expenses): Allocation of investment income from pooled investment fund Investment expenses Total nonoperating revenues Change in net position Total net position: Beginning of year End of year $ 547 547 3,588 80 3,668 (3,121) 16,651 (67) 16,584 13,463 305,877 319,340 See accompanying notes to financial statements. 29 Financial Section Statement of Cash Flows State Employees' Assurance Department Active Members Fund Year ended June 30, 2020 (In thousands) Cash flows from operating activities: Insurance premiums received $ Death benefits paid Administrative fees paid Net cash used in operating activities Cash flows from investing activities: Withdrawals from pooled investment fund Investment expenses paid Net cash provided by investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Reconciliation of operating loss to net cash used in operating activities: Operating loss Changes in assets and liabilities: Unremitted Insurance Premiums Accounts payable and other Net cash used in operating activities $ See accompanying notes to financial statements. 550 (3,588) (75) (3,113) 3,300 (67) 3,233 120 52 172 (3,121) 3 5 (3,113) 30 Financial Section Notes to Financial Statements June 30, 2020 (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), comprises 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), Superior Court Judges Retirement Fund (SCJRF), District Attorneys Retirement Fund (DARF), State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund (SEAD-OPEB), Georgia Defined Contribution Plan (GDCP), State of Georgia Employees' Qualified Trust Deferred Compensation Plan (401(k) Plan), State of Georgia Employees' Deferred Compensation Plan (457 Plan), Survivors Benefit Fund (SBF), and State Employees' Assurance Department Active Members Fund (SEAD-Active). All significant transactions among the various systems, departments, and funds have been eliminated. The Boards of Trustees, comprising 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 (ERS Board) and has the powers and privileges of a corporation. There were 417 employers and 1 nonemployer contributing entity participating in the plan during 2020. Total participation in ERS at June 30, 2020 was 173,803 as detailed in the following chart: ERS Membership as of June 30, 2020 Inactive members and beneficiaries currently receiving benefits Inactive members entitled to benefits but not yet receiving benefits Active plan members 57,059 53,249 63,495 Benefits The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the Old Plan started membership prior to July 1, 1982 and are subject to 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 modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. 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. (continued) 31 Financial Section Notes to Financial Statements June 30, 2020 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. 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. Pursuant to The Official Code of Georgia Annotated (O.C.G.A.) 47-2-292, the employer contributions for local tax commissioners and their employees who took office or were employed prior to July 1, 2012 are funded by the State of Georgia on behalf of the local county employer. Pursuant to O.C.G.A. 47-2-290, the employer contribution for certain State Court employees is funded by the state on behalf of the local county employer. Employer and nonemployer contributions as a percentage of covered payroll required for fiscal year 2020 were based on the June 30, 2017 actuarial valuation for the Old Plan, New Plan, and GSEPS, as follows: Employer and nonemployer: Normal Employer paid for member Accrued liability Total Old Plan New Plan GSEPS 1.31 % 4.75 % 18.60 % 24.66 % 6.06 % -- % 18.60 % 24.66 % 3.04 % -- % 18.60 % 21.64 % Members become vested after 10 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. (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, plus two additional trustees, administers PSERS (PSERS Board). There were 186 employers and 1 nonemployer contributing entity participating in the plan during 2020. Total participation in PSERS at June 30, 2020 was 104,244 as detailed in the chart on the following page: (continued) 32 Financial Section Notes to Financial Statements June 30, 2020 PSERS Membership as of June 30, 2020 Inactive members and beneficiaries currently receiving benefits Inactive members entitled to benefits but not yet receiving benefits Active plan members 34,736 19,232 50,276 Benefits A member may retire and elect to receive normal monthly retirement benefits after completion of 10 years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of 10 years of service. Upon retirement, the member will receive a monthly benefit of $15.50, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Contributions and Vesting Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 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. Employer contributions required for the year ended June 30, 2020 were $825.03 per active member and were based on the June 30, 2017 actuarial valuation. Members become vested after 10 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. (c) LRS is a single-employer defined benefit pension plan established by the Georgia General Assembly from 19671971, and later reestablished in 1979, for the purpose of providing retirement allowances for all members of the Georgia General Assembly. LRS is administered by the ERS Board. There was one employer in the plan for 2020. Total participation in LRS at June 30, 2020 was 658 as detailed in the following chart : LRS Membership as of June 30, 2020 Inactive members and beneficiaries currently receiving benefits Inactive members entitled to benefits but not yet receiving benefits Active plan members 219 269 170 (continued) 33 Financial Section Notes to Financial Statements June 30, 2020 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. 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. There were no employer contributions required for the year ended June 30, 2020 based on the June 30, 2017 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) GJRS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1998 for the purpose of providing retirement allowances for judges and solicitors general 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. The GJRS was also 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 and three additional trustees administer GJRS (GJRS Board). There were 92 employers and 1 nonemployer contributing entity participating in the plan during 2020. Total participation in GJRS at June 30, 2020 was 1,000 as detailed in the following chart: GJRS Membership as of June 30, 2020 Inactive members and beneficiaries currently receiving benefits Inactive members entitled to benefits but not yet receiving benefits Active plan members 414 522 64 (continued) 34 Financial Section Notes to Financial Statements June 30, 2020 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% of state-paid salary at retirement for district attorneys and superior court judges and 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. Contributions and Vesting Members are required to contribute 7.5% of their annual salary. Those who became members prior to July 1, 2012 must also contribute 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. Pursuant to O.C.G.A. 47-23-81, the employer contributions for state court judges and solicitors are funded by the State of Georgia on behalf of the local county employers and pursuant to O.C.G.A. 47-23-82, the employer contributions for juvenile court judges are funded by the state on behalf of local county employers. Employer and nonemployer contributions required for fiscal year 2020 were based on the June 30, 2017 actuarial valuation, as follows: Employer and nonemployer: Normal Accrued liability Total 13.76 % (4.63) 9.13 % Members become vested after 10 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. (e) 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 (the National Guard). The ERS Board administers the GMPF. Membership As of June 30, 2020, GMPF had 1,223 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. (continued) 35 Financial Section Notes to Financial Statements June 30, 2020 Contributions and Vesting Employer contributions are actuarially determined and approved and certified by the ERS Board. There are no member contributions required. Employer contributions required for the year ended June 30, 2020 were $200.32 per active member and were based on the June 30, 2017 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. (f) 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 (SCJRF Board). The ERS Board and SCJRF Board entered into a contract for the System to administer the plan effective July 1, 1995. Membership As of June 30, 2020, SCJRF had five retirees and beneficiaries currently receiving benefits and no active members. No new members are allowed in 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. (g) DARF is a multiple-employer defined benefit pension plan established by the Georgia General Assembly 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 (DARF Board). The ERS Board and DARF Board entered into a contract for the System to administer the plan effective July 1, 1995. Membership As of June 30, 2020, DARF had three 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. (h) SEAD-OPEB is a cost-sharing multiple-employer defined benefit other postemployment benefit plan created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., 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, and GJRS. Effective July 1, 2009, no newly hired members of any Georgia public retirement system are (continued) 36 Financial Section Notes to Financial Statements June 30, 2020 eligible for term life insurance under SEAD. The SEAD-OPEB trust fund accumulates the premiums received from the aforementioned retirement systems, including interest earned on deposits and investments of such payments from retired and vested inactive members. There were 444 employers and 1 nonemployer contributing entity participating in the plan during 2020. Total participation in SEAD-OPEB at June 30, 2020 was 66,166 as detailed in the following chart: SEAD Membership as of June 30, 2020 Retirees and beneficiaries Terminated employees Active plan members 1,016 21,020 44,130 Employee contribution rates as a percentage of member's salaries for the fiscal year ended June 30, 2020 were as follows: ERS Old Plan 0.45% and ERS New Plan, LRS, and GJRS 0.23%. ERS 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. Georgia law provides that employee contributions to the plan shall be in an amount established by the Board of Trustees (SEAD Board) not to exceed one-half of 1% of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2020. 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 position represents the excess accumulation of investment income and premiums over benefit payments and expenses, and is held as a reserve for payment of death benefits under existing policies. The amount of insurance for a retiree with creditable service prior to April 1, 1964 is the full amount of insurance under SEAD-Active in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964 is 70% of the amount of insurance under SEAD-Active at age 60 or at termination, if earlier. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the retiree. Administrative costs for the plan are determined based on the plan's share of overhead costs to accumulate and invest funds, actuarial services, and to process benefit payments to beneficiaries. Administrative fees are financed from the assets of the plan. (i) 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. There were 69 employers participating in the plan during 2020. There were 128,662 members as of June 30, 2020. 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. If a terminated member has less than $5,000 credited to his/her account, the ERS Board 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. (continued) 37 Financial Section Notes to Financial Statements June 30, 2020 Contributions and Vesting Members are required to contribute 7.5% of their annual salary and vest immediately in the plan upon contribution. There are no employer contributions. Earnings will be credited to each member's account as adopted by the ERS Board. Upon termination of employment, the amount of the member's account is refundable upon request by the member. (j) The 401(k) Plan was established by the State of Georgia Employee Benefit Plan Council in accordance with Georgia Law 1985, as amended, O.C.G.A, 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; on January 1, 2010, the Plan became available to employees of Henry County Board of Education; and on July 1, 2017, the Plan became available to employees of the Baldwin County Board of Education. Effective July 1, 1998, the State of Georgia Employee's Deferred Compensation Group Trust (the 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 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), the ERS Board became the trustee of the 401(k) Plan. Alight Solutions and J.P. Morgan 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, some matching, some automatic, and some a combination of both, to eligible employees at various rates (limited to a maximum of $280,000 base salary in calendar year 2019 and $285,000 in calendar year 2020). 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 Plan or New Plan, are members of GSEPS. From January 1, 2009 to June 30, 2014, the GSEPS tier included automatic enrollment in the 401(k) Plan at a contribution rate of 1% of salary. Effective July 1, 2014, in accordance with HB764, the employee contribution rate for automatic enrollment increased from 1% to 5%. The State matches 100% of the employee's initial 1% contribution and 50% of contributions above 1% and up to 5%. Therefore, the state will match 3% of salary when an employee contributes at least 5% to the 401(k) Plan. Employee contributions greater than 5% of salary do not receive any additional matching funds. Plan participants who are not employees of the GLC, a CSB, Walton and Henry County Boards of Education, or who are not GSEPS eligible, 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 schedule on the following page: (continued) 38 Financial Section Notes to Financial Statements June 30, 2020 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 20 3 40 4 60 5 80 6 or more years 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 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. Participation As of June 30, 2020, the 401(k) Plan had 71,716 participants with a balance. A total of 470 employers transmitted contributions to the plan during 2020. Distributions The participant may receive the value of his or her vested accounts upon attaining age 59 , qualifying financial hardship, or 30 days after 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. Employees who die while actively employed and eligible for 401(k) Plan employer matching contributions become fully vested in employer contributions upon death. Distributions are made in installments or in a lump sum. (k) The 457 Plan was established by the State Personnel Board in accordance with Georgia Law 1974, page 198 as amended, O.C.G.A., Sections 45-18-30 through 45-18-36, and Section 457 of the 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 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 401(k) Plan are (continued) 39 Financial Section Notes to Financial Statements June 30, 2020 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), the ERS Board became the trustee of the 457 Plan. Alight Solutions and J.P. Morgan hold, administer, and invest the assets of the Master Trust. Participation As of June 30, 2020, the 457 Plan had 12,331 participants with a balance. A total of 330 employers transmitted contributions to the plan during 2020. Distributions The balance in the employee's account in the 457 Plan is not available to the employee until age 70 , termination, retirement, death, or unforeseeable emergency, as defined in the 457 Plan. 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) SBF was established under O.C.G.A. 47-2-128(c)(3) within the ERS trust solely for maintaining group term life insurance coverage for members of the plan. All assets of SBF are therefore limited to the payment of benefits and expenses for such coverage and cannot be used to pay pension benefits of ERS. SBF is shown on the financial statements separately as a custodial fund to reflect ERS's custodial responsibility and to account for assets held for distribution to SEAD-Active and SEAD-OPEB. SBF may only be used to pay benefits or expenses of SEAD-OPEB or SEAD-Active with authorization by the ERS Board. An actuarial valuation is not prepared, as there are no funding requirements. (m) SEAD-Active is a cost-sharing multiple-employer life insurance plan created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., relating to retirement, so as to establish a fund for the provision of term life insurance to active members of ERS, LRS, and GJRS. Effective July 1, 2009, no newly hired members of any Georgia public retirement system are eligible for term life insurance under SEAD. The SEAD-Active fund accumulates the premiums received from the aforementioned retirement systems, including interest earned on deposits and investments of such payments from active members. There were 444 employers and 1 nonemployer contributing entity participating in the plan during 2020. As of June 30, 2020, there were 21,020 active plan members in SEAD-Active. Employee contribution rates as a percentage of member's salaries for the fiscal year ended June 30, 2020 were as follows: ERS Old Plan 0.05% and ERS New Plan, LRS, and GJRS 0.02%. ERS 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. Georgia law provides that employee contributions to the plan shall be in an amount established by the SEAD Board not to exceed one-half of 1% of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2020. 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 position represents the excess accumulation of investment income and premiums over benefit payments and expenses, and is held as a reserve for payment of death benefits under existing policies. The amount of insurance coverage is equal to 18 times monthly earnable compensation frozen at age 60. For members with no creditable service prior to April 1, 1964, the amount decreases from age 60 by a half of 1% (continued) 40 Financial Section Notes to Financial Statements June 30, 2020 per month until age 65, at which point the member will be covered for 70% of the age 60 coverage. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the member. Administrative costs for the plan are determined based on the plan's share of overhead costs to accumulate and invest funds, actuarial services, and to process benefit payments to beneficiaries. Administrative fees are financed from the assets of the plan. (3) Significant Accounting Policies and System Asset Matters (a) Basis of Accounting The System's financial statements are prepared in accordance with U.S. generally accepted accounting principles as applicable to governmental organizations. The System follows the reporting requirements established by the GASB. Fiduciary funds include the defined benefit plans and defined contribution plans, which are accounted for on the flow of economic resources measurement focus and the accrual basis of accounting. Contributions to the defined benefit pension plans and OPEB plan are recognized when due, based on statutory requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Contributions to the deferred compensation plans are recognized as received. The SBF is a custodial fund and accounted for on the flow of economic resources measurement focus and the accrual basis of accounting. The proprietary fund comprises the SEAD-Active plan. This fund is accounted for on the flow of economic resources measurement focus and uses the accrual basis of accounting. The principal operating revenues are derived from insurance premiums. Operating expenses include the cost of claims and related expenses. (b) Reporting Entity The System is a component unit of the State of Georgia; however, it is accountable for its own fiscal matters and presentation of its separate financial statements. The System has considered potential component units under GASB Statements No. 80, Blending Requirements for Certain Component Units, No. 61, The Financial Reporting Entity's Omnibus An Amendment of GASB Statement No. 14 and No. 34, and No. 39, Determining Whether Certain Organizations are Component Units, and determined there were no component units of the System. (c) Cash and Cash Equivalents Cash and cash equivalents, reported at cost, include cash on deposit at banks and cash on deposit with the investment custodian. (d) Investments Investments are reported at fair value, and in some cases, net asset value (NAV) as a practical expedient to fair value. Equity securities traded on a national or international exchange are valued at the last reported sales price. Investments in private investment companies are valued utilizing the NAVs provided by the underlying private investment companies as a practical expedient. The Pooled Investment Fund (the Fund) applies the practical expedient to its investments in private investment companies on an investment by investment basis, consistent with the Fund's entire position in a particular investment, unless it is probable that the Fund will sell a portion of an investment at an amount different from the NAV of the investment. Private equity fair value is measured using the valuation of the underlying companies as reported by the general partner. These investments, in the form of limited partnerships, reflect values and related performance on a quarter-lag basis due to the nature of the investments and the time it takes to value them. The estimated fair value of investments without readily determinable market values could differ significantly if a ready market for these assets existed. Fixed income securities are valued based primarily on quoted market prices provided by independent pricing sources. Global foreign exchange holdings are translated (continued) 41 Financial Section Notes to Financial Statements June 30, 2020 using a third-party vendor. 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, foreign currency, 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. The System's policy with regard to the allocation of invested assets is established on a cost basis in compliance with Georgia statute. Plan assets are managed on a total return basis with a long-term objective of achieving and maintaining a fully funded status for the benefits provided through the pension and OPEB plans. The following was the System's adopted asset allocation policy as of June 30, 2020: Asset class Fixed income Equities Alternative investments Total Target allocation 25%-45% 55%-75% 0%-5% 100% Approximately 19.4% of the investments held in trust for pension and OPEB benefits are invested in debt securities of the U.S. government. The System has no investments in any one organization, other than those issued by the U.S. government and its instrumentalities, that represent 5% or more of the System's net position restricted for pensions and OPEB and SBF. For the year ended June 30, 2020, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was (3.6)%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. (e) Capital Assets Capital assets, including software development costs, are stated at cost less accumulated depreciation and reside in ERS. 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 3 to 40 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 Combining Statement of Changes in Fiduciary Net Position in the period of disposal. (f) 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 position and changes therein. Actual results could differ from those estimates. (continued) 42 Financial Section Notes to Financial Statements June 30, 2020 (g) New Accounting Pronouncements Pronouncements effective for the 2020 financial statements: In May 2020, the GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance effective immediately. The primary objective of this Statement is to provide temporary relief to governments and stakeholders as a result of the COVID-19 pandemic. This Statement postpones the effective dates of certain provisions in the Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018 and later. Pronouncements issued and not yet effective, but early implemented for the 2020 financial statements: In January 2017, the GASB issued Statement No. 84, Fiduciary Activities effective for fiscal years beginning after December 15, 2018. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 84 to fiscal years beginning after December 15, 2019. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. See Change in Accounting Principle section for the impact to the System. Pronouncements issued, but not yet effective: In June 2017, the GASB issued Statement No. 87, Leases effective for fiscal years beginning after December 15, 2019. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 87 to fiscal years beginning after June 15, 2021. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. The System is in the process of evaluating the impact of this pronouncement on its financial statements. In June 2018, the GASB issued Statement No. 89, Accounting for Interest Costs Incurred before the End of a Construction Period effective for fiscal years beginning after December 15, 2019. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 89 to fiscal years beginning after December 15, 2020. The objectives of this Statement are to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period. In addition, this Statement's goal is to simplify accounting for interest cost incurred before the end of a construction period. The System does not anticipate this pronouncement will impact its financial statements and related reporting. In August 2018, the GASB issued Statement No. 90, Majority Equity Interests-an amendment of GASB Statements No. 14 and No. 61 for fiscal years beginning after December 15, 2018. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 90 to fiscal years beginning after December 15, 2019. The objectives of this Statement are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The System is in the process of evaluating the impact of this pronouncement on its financial statements. In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations effective for fiscal years beginning after December 15, 2020. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 91 to fiscal years beginning after December 15, 2021. The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with commitments extended by issuers, arrangements associated with conduit debt obligations, and related note disclosures. The System does not anticipate this statement will impact its financial statements and related reporting. (continued) 43 Financial Section Notes to Financial Statements June 30, 2020 In January 2020, the GASB issued Statement No. 92, Omnibus 2020 effective for fiscal years beginning after June 15, 2020. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 92 to fiscal years beginning after June 15, 2021. The objectives of this Statement are to enhance comparability in accounting and financial reporting as well as improve the consistency of authoritative literature. The variety of topics covered include the effective date for Statement No. 87, the reporting of intra-entity transfers, the applicability of certain requirements of Statements No. 73, 74, and 84, and the measurement of liabilities related to asset retirement obligations. The System is in the process of evaluating the impact of this pronouncement on its financial statements. In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates effective for fiscal years beginning after June 15, 2020. In May 2020, the GASB issued Statement No. 95 which changed the effective date for Statement No. 93 to fiscal years beginning after June 15, 2021. The objective of this Statement is to address the accounting and financial reporting implications that result from the replacement of an interbank offered rate (IBOR). The System does not anticipate this pronouncement will impact its financial statements and related reporting. In March 2020, the GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements effective for fiscal years beginning after June 15, 2022. The objective of this Statement is to improve the comparability of financial statements among governments that enter into public-private and public-public partnership arrangements (PPP) and availability payment arrangements (APAs). The System does not anticipate this pronouncement will impact its financial statements and related reporting. In May 2020, the GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements, effective for fiscal years beginning after June 15, 2022. The objective of this Statement is to better meet the informational needs of financial statement users by establishing uniform accounting and financial reporting requirements and improving the comparability of financial statements among governments that have entered into subscription based information technology arrangements (SBITAs). The System is in the process of evaluating the impact of this pronouncement on its financial statements. (continued) 44 Financial Section Notes to Financial Statements June 30, 2020 (h) Change in Accounting Principle During fiscal year 2020, the System adopted the provisions of GASB Statement No. 84, Fiduciary Activities. The impact on the financial statements and related schedules included changing the previously reported agency fund to a custodial fund. The net position of this newly classified SBF is required to be included on the Combining Statement of Changes in Fiduciary Net Position resulting in a restated beginning fund balance. Additionally, the previously reported agency fund Statement of Changes in Assets and Liabilities for SBF has been removed from the Additional Information section. A summary of the changes to beginning net position is as follows (amounts in thousands): Combining Statement of Fiduciary Net Position: Total liabilities as of 6/30/19, as previously reported $ Adoption of GASB Statement No. 84 Total liabilities as of 6/30/19, as restated $ Combining Statement of Changes in Fiduciary Net Position: Total additions as of 6/30/19, as previously reported $ Adoption of GASB Statement No. 84 Total additions as of 6/30/19, as restated $ Total deductions as of 6/30/19, as previously reported $ Adoption of GASB Statement No. 84 Total deductions as of 6/30/19, as restated $ Net Position, as of 6/30/19 as previously reported $ Adoption of GASB Statement No. 84 Net Position as of 6/30/19, as restated $ SBF System Total 158,744 $ (158,744) -- $ 505,291 (158,744) 346,547 -- 10,208 10,208 -- 5 5 -- 158,744 158,744 $ 2,094,385 10,208 $ 2,104,593 $ 1,733,220 5 $ 1,733,225 $ 18,260,085 158,744 $ 18,418,829 (4) Investment Program The System maintains sufficient cash to meet its immediate liquidity needs. Cash not immediately needed is invested as directed by the ERS Board. All investments are held by agent custodial banks in the name of the System. State statutes and the System's investment policy authorize the System to invest in a variety of shortterm and long-term securities as follows: (a) Cash and Cash Equivalents Custodial credit risk is the risk that in the event a depository institution or counterparty fails, the System would not be able to recover the value of its deposits or investments. The System does not have a formal policy relating to custodial credit risk. The carrying amount of the System's deposits totaled $276.3 million at June 30, 2020, with actual bank balances of $275.0 million. The System's bank balances of $253.8 million are fully insured through the Federal Deposit Insurance Corporation, an independent agency of the U.S. government. The remaining bank deposits of $21.2 million are uninsured and uncollateralized. The System's noncash investments are held in the System's name and are not exposed to custodial credit risk. Short-term securities authorized but not currently used are as follows: 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. (continued) 45 Financial Section Notes to Financial Statements June 30, 2020 U.S. Treasury obligations 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-l and/or A-l 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-l and/or A-l by national credit rating agencies. Investments in commercial paper or master notes are limited to no more than $500 million in any one name. (b) Investments Fixed income investments, managed by the Division of Investment Services (the Division), are authorized in the following instruments: U.S. and foreign government obligations. At June 30, 2020, the System held U.S. Treasury bonds of approximately $3.6 billion. U.S. and foreign corporate obligations. At June 30, 2020, the System held U.S. corporate bonds of approximately $1.2 billion and international corporate bonds of approximately $212.1 million. Obligations unconditionally guaranteed by agencies of the U.S. government. At June 30, 2020, the System did not hold agency bonds. Private placements are authorized under the same general restrictions applicable to corporate bonds. At June 30, 2020, the System did not hold private placements. 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 statute) for investment as a complement to the System's fixed income portfolio and as a long-term inflation hedge. By statute, no more than 75% 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, in conjunction with independent advisers. Buy/sell decisions are based on securities meeting rating criteria established by the ERS Board, in-house research considering such matters 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 ERS Board before being placed on an approved list. Equity investments are authorized in the following instruments: Domestic equities are those securities considered by O.C.G.A. to be domiciled in the United States. At June 30, 2020, the System held domestic equities of approximately $8.6 billion, excluding the 401(k) and 457 plans. International equities, including American Depository Receipts (ADR), are not considered by the O.C.G.A. to be domiciled in the United States. At June 30, 2020, the System held international equities of approximately $1.1 billion and ADRs of approximately $1.5 billion, excluding the 401(k) and 457 plans. (continued) 46 Financial Section Notes to Financial Statements June 30, 2020 Alternative investments are authorized (in statute) to provide portfolio diversification and to enhance the risk-adjusted rate of return for the retirement fund that benefits the members of the System. By statute, the allocation to alternative investments shall not, in the aggregate, exceed 5% of the System's plan assets at any time. Further, in any calendar year, new commitments to alternative investments shall not, in the aggregate, exceed 1.0% of the System's plan assets until the first occurrence that 4.5% of the assets have been invested, at which time there shall be no limit on the percentage of commitments that may be made in any calendar year, subject to compliance with other provisions of the statute. At June 30, 2020, the System held private equity investments of approximately $365.5 million. The 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 investment options that own one or more commingled funds, as authorized by the ERS Board. Participants may also contribute to a self-directed brokerage account that offers investments in various mutual funds and equities. At June 30, 2020, the deferred compensation plans held commingled funds of approximately $1.9 billion, mutual funds of approximately $7.5 million, domestic equities of approximately $18.8 million, and international equities of approximately $1.9 million. Substantially all of the investments of ERS, PSERS, LRS, GJRS, GMPF, SEAD-OPEB, SBF, and SEADActive 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, 2020, were as follows (dollars in thousands): Employees' Retirement System Public School Employees Retirement System Legislative Retirement System Georgia Judicial Retirement System Georgia Military Pension Fund State Employees' Assurance Department - OPEB Survivors Benefit Fund Fair value $ 13,456,293 958,718 34,599 485,633 28,995 1,256,402 167,359 Units 2,412,710 171,898 6,204 87,074 5,199 225,273 30,007 Total defined benefit plans State Employees' Assurance Department - Active Total in pooled investment funds 16,387,999 319,146 $ 16,707,145 2,938,365 57,223 2,995,588 Fair Value Measurements. The System categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the inputs used in valuation and gives the highest priority to unadjusted quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuations are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest level, Level 1, is given to unadjusted quoted prices in active markets and the lowest level, Level 3, to unobservable inputs. (continued) 47 Financial Section Notes to Financial Statements June 30, 2020 The three levels of the fair value hierarchy are as follows: Level 1 Valuations based on unadjusted quoted prices for identical instruments in active markets that the System has the ability to access. Level 2 Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable. Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The System also has investments held through limited partnerships for which fair value is estimated using the NAV reported by the general partner as a practical expedient to fair value. Such investments have not been categorized within the fair value hierarchy. In instances where inputs used to measure fair value fall into different levels in the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The System's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each investment. The table below shows the fair value leveling of the System's investments (in thousands): Investments by fair value level Equities: Domestic International Obligations: Domestic: U.S. treasuries Corporate bonds International: Corporate bonds Mutual funds Commingled funds Total investments by fair value level Investments measured at NAV* Private equity funds Total investments Fair value measures using prices in active markets for identical assets Significant other observable inputs Significant unobservabl e inputs (Level 1) (Level 2) (Level 3) Total $ 8,641,627 2,615,352 -- 20,762 -- 8,641,627 -- 2,636,114 3,584,895 -- -- 7,498 70,297 -- 1,162,433 212,119 -- 1,815,551 $ 14,919,669 3,210,865 -- 3,584,895 -- 1,162,433 -- 212,119 -- 7,498 -- 1,885,848 -- 18,130,534 365,458 $ 18,495,992 *Certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Combining Statement of Fiduciary Net Position. (continued) 48 Financial Section Notes to Financial Statements June 30, 2020 Equity securities classified in Level 1 are valued using prices quoted in active markets for those securities. Equity securities in Level 2 are valued using prices quoted for similar instruments in active markets. Equity securities classified in Level 3, if any, are valued using third-party valuations not currently observable in the market. Debt securities classified in Level 1 are valued using prices quoted in active markets. Debt securities classified in Level 2 are valued using either a bid evaluation or a matrix pricing technique. Bid evaluations may include market quotations, yields, maturities, call features, and ratings. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. These securities have nonproprietary information that was readily available to market participants, from multiple independent sources, which are known to be actively involved in the market. Mutual funds and commingled funds classified in Level 1 are valued using prices quoted in active markets for those investment types. Commingled funds classified in Level 2 are valued using observable underlying inputs that are market corroborated. Unfunded commitments, redemption frequency, and redemption notice period relative to the System's alternative investments for which the System utilized NAV or its equivalent relative to the determination of fair value at June 30, 2020, are as follows (in thousands): Private equity funds Investments measured at NAV $ 365,458 Unfunded commitments 289,352 Redemption frequency (if currently eligible) Not Eligible Redemption notice period N/A Investments in privately held limited partnerships are valued using the NAV provided by the general partner as of March 31 of each fiscal year, adjusted by the System for cash flows through June 30. The quarterly values of the partnership investments provided from the general partner are reviewed by the System to determine if any adjustments are necessary. The types of partnership strategies held include growth equity, leveraged buyouts, and mezzanine debt. Two of the 21 partnerships held are secondary investments and are in or nearing the wind up phase of the fund. The remaining investments typically have an approximate life of 810 years. These investments are considered illiquid since the nature of these private investments prohibits redemption with the fund; instead, distributions are received from the general partner through liquidation of the underlying assets of the fund. The System currently has no plans to sell any of the investments prior to their liquidation resulting in these assets being carried at the NAV estimated by the general partner and adjusted for second quarter cash flows by the System. Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the System. O.C.G.A. 47-20-84 limits investments to investment grade securities. 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. If a bond is subsequently downgraded to a rating below "A," it is placed on a watch list. The System holds two bonds that were downgraded to a rating below "A." Obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not considered to have credit risk and do not require disclosure of credit quality. 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, 2020, are shown in the table on the following page (in thousands). (continued) 49 Financial Section Notes to Financial Statements June 30, 2020 Quality Ratings of Fixed Income Investments Held at June 30, 2020 Investment type Domestic obligations: U.S. treasuries Standard and Poor's/ June 30, 2020 Moody's quality rating fair value $ 3,584,895 Corporates AAA/Aaa AA/Aa AA/A A/A A/Baa BBB/A 185,401 267,962 105,112 408,400 102,518 93,040 Total domestic corporates 1,162,433 International obligations: Corporates Total international corporates Total fixed income investments AA/Aa AA/A 106,153 105,966 212,119 $ 4,959,447 Mutual funds, commingled funds, and various equities 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 issuer. At June 30, 2020, 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 total investments. 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 table on the following page quantifies to the fullest extent possible the interest rate risk of the System's fixed income assets (in thousands). (continued) 50 Financial Section Notes to Financial Statements June 30, 2020 Effective Duration of Fixed Income Assets Fixed income type Domestic obligations: U.S. treasuries Corporates Fair value June 30, 2020 Percent of all fixed income assets Effective duration (years) $ 3,584,895 1,162,433 72.3 % 6.8 23.4 3.9 International obligations: Corporates Total 212,119 $ 4,959,447 4.3 5.3 100 % 6.0 Foreign Currency Risk: Foreign currency risk is the risk that changes in exchange rates will adversely impact the fair value of an investment. The System's currency risk exposures, or exchange rate risks, primarily reside within the System's international equity investment holdings. The System's asset allocation and investment policies allow for active and passive investments in international securities. The System's Boardadopted foreign exchange risk management policy is to minimize risk and protect the investments from negative impact by hedging foreign currency exposures with foreign exchange instruments when market conditions and circumstances are deemed appropriate. Foreign exchange instruments are used to protect the value of noncash investments from currency movements. The System's foreign exchange risk management policy does not quantify limitations on foreign currency-denominated investments. As of June 30, 2020, the System's exposure to foreign currency risk in U.S. Dollars, excluding the 401(k) and 457 plans, is highlighted in the table on the following page (in thousands). (continued) 51 Financial Section Notes to Financial Statements June 30, 2020 International Investment Securities at Fair Value as of June 30, 2020 Currency Australian dollar Brazilian real British pound Canadian dollar Chilean peso Colombian peso Czech krone Danish krone Euro Hong Kong dollar Indian rupee Indonesian rupiah Israeli shekel Japanese yen Malaysian ringgit Mexican peso New Taiwan dollar New Zealand dollar Norwegian krone Philippine peso Polish zloty Qatari riyal Singapore dollar South African rand South Korean won Swedish krona Swiss franc Thailand baht UAE dirham Cash/cash equivalents $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Equities 40,080 20,461 78,488 32,609 1,892 698 1,133 18,708 302,113 107,113 51,555 4,184 1,847 219,848 9,178 9,218 35,284 2,112 1,989 3,662 3,387 2,644 16,481 22,607 67,365 39,606 27,143 20,763 3,976 Fixed income -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Total holdings subject to foreign currency risk -- 1,146,144 -- Investment securities payable in U.S. dollars -- 1,488,052 212,119 Total international investment securities - at fair value $ -- 2,634,196 212,119 Total 40,080 20,461 78,488 32,609 1,892 698 1,133 18,708 302,113 107,113 51,555 4,184 1,847 219,848 9,178 9,218 35,284 2,112 1,989 3,662 3,387 2,644 16,481 22,607 67,365 39,606 27,143 20,763 3,976 1,146,144 1,700,171 2,846,315 (continued) 52 Financial Section Notes to Financial Statements June 30, 2020 (5) Securities Lending Program State statutes and ERS Board 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. The System reports the gross loan fee income earned as investment income on the Combining Statement of Changes in Fiduciary Net Position. 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, corporate bonds, and equities. The collateral value must be equal to at least 102% to 109% of the loaned securities' value, depending on the type of collateral security. Securities loaned totaled approximately $3.3 billion at fair value at June 30, 2020. The collateral value was equal to 105.1% of the loaned securities' value at June 30, 2020. The System's lending collateral was held in the System's name by the tri-party custodian. Loaned securities are included in the accompanying Combining Statement of Fiduciary Net Position since the System maintains ownership. The related collateral securities are not recorded as assets on the System's Combining Statement of Fiduciary Net Position, and a corresponding liability is not recorded, since the System is deemed not to have the ability to pledge or trade the collateral securities. In accordance with the criteria set forth in GASB Statement No. 28, Accounting and Financial Reporting for Securities Lending Transactions, 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) Capital Assets The following is a summary of capital assets and depreciation information as of and for the year ended June 30, 2020 (dollars in thousands): Capital assets: Land Building Equipment Vehicles Computer software Accumulated depreciation for: Building Equipment Vehicles Computer software Capital assets, net Balance at June 30, 2019 Additions Disposals Balance at June 30, 2020 $ 4,350 2,800 3,511 -- 14,345 25,006 -- -- 4,350 -- -- 2,800 326 (1,596) 2,241 -- -- -- -- -- 14,345 326 (1,596) 23,736 (1,050) (3,059) -- (14,345) (18,454) $ 6,552 53 (70) (240) -- -- (310) 16 -- 1,596 -- -- 1,596 -- (1,120) (1,703) -- (14,345) (17,168) 6,568 (continued) Financial Section Notes to Financial Statements June 30, 2020 (7) Commitments As of June 30, 2020, the System had committed to fund certain private equity partnerships for a total capital commitment of approximately $647.8 million. Of this amount, approximately $289.4 million remained unfunded and is not recorded on the System's Combining Statement of Fiduciary Net Position. (8) Net Pension Liability of Employers and Nonemployer - ERS The components of the net pension liability of the participating employers and nonemployer at June 30, 2020 were as follows (dollars in thousands): Total pension liability $ Plan fiduciary net position Employers' and nonemployer net pension liability $ Plan fiduciary net position as a percentage of the total pension liability 17,717,243 13,502,286 4,214,957 76.21 % Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return 2.75% 3.25 - 7.00%, including inflation 7.30%, net of pension plan investment expense, including inflation Postretirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward two years for both males and females for service retirements and dependent beneficiaries. The RP-2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB and set back seven years for males and set forward three years for females was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the ERS Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the ERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the ERS Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 54 Financial Section Notes to Financial Statements June 30, 2020 The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total * Rates shown are net of inflation Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 Discount rate: The discount rate used to measure the total pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability, calculated using the discount rate of 7.30%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): Employers' and nonemployer net pension liability 1% Decrease (6.30%) $5,929,704 Current discount rate (7.30%) 4,214,957 1% Increase (8.30%) 2,751,621 Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total pension liability is based. An expected total pension liability is determined as of June 30, 2020 using standard roll-forward techniques for the actual total pension liability both before and after reflecting the two one-time 3% payments to certain retirees and beneficiaries effective July 2019 and January 2020. The difference between these two amounts is shown as a change in benefit terms. The roll-forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. (9) Net Pension Liability of Employers and Nonemployer PSERS The components of the net pension liability of the participating employers and nonemployer at June 30, 2020 were as follows (dollars in thousands): Total pension liability $ Plan fiduciary net position Employers' and nonemployer net pension liability $ Plan fiduciary net position as a percentage of the total pension liability 1,134,724 958,248 176,476 84.45 % 55 (continued) Financial Section Notes to Financial Statements June 30, 2020 Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return Cost-of-living adjustment 2.75% n/a 7.30%, net of pension plan investment expense, including inflation 1.5% semi-annually Postretirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward three years for males and two years for females) for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward five years for both males and females) was used for death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the PSERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the PSERS Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 * Rates shown are net of inflation. Discount rate: The discount rate used to measure the total pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments (continued) 56 Financial Section Notes to Financial Statements June 30, 2020 of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability, calculated using the discount rate of 7.30%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): Employers' and nonemployer net pension liability 1% Decrease (6.30%) $300,027 Current discount rate (7.30%) 176,476 1% Increase (8.30%) 72,356 Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total pension liability is based. An expected total pension liability is determined as of June 30, 2020 using standard roll-forward techniques for the actual total pension liability before and after any benefit changes, reflecting the increase in the monthly benefit accrual rate from $15.25 to $15.50 per year of creditable service. The roll-forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. (10) Net Pension Liability of Employer LRS The components of the net pension liability (asset) of the participating employer at June 30, 2020 were as follows (dollars in thousands): Total pension liability $ Plan fiduciary net position Employer's net pension liability (asset) $ Plan fiduciary net position as a percentage of the total pension liability 26,081 34,568 (8,487) 132.54 % Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return Cost-of-living adjustment 2.75% n/a 7.30%, net of pension plan investment expense, including inflation 1.5% semi-annually Postretirement mortality rates were based on the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward two years for both males and females) for the period after service retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the ERS Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. The RP-2000 Employee Mortality table projected to 2025 using projection scale BB was used for deaths in active service. (continued) 57 Financial Section Notes to Financial Statements June 30, 2020 The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the ERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the ERS Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total * Rates shown are net of inflation. Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 Discount rate: The discount rate used to measure the total pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate: The following table presents the net pension liability (asset), calculated using the discount rate of 7.30%, as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): Employers' and nonemployer net pension liability (asset) 1% Decrease (6.30%) $(6,047) Current discount rate (7.30%) (8,487) 1% Increase (8.30%) (10,567) Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total pension liability is based. An expected total pension liability is determined as of June 30, 2020 using standard roll-forward techniques. The roll-forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. (continued) 58 Financial Section Notes to Financial Statements June 30, 2020 (11) Net Pension Liability of Employers and Nonemployer GJRS The components of the net pension liability (asset) of the participating employers and nonemployer at June 30, 2020 were as follows (dollars in thousands): Total pension liability $ Plan fiduciary net position Employer's net pension liability (asset) $ Plan fiduciary net position as a percentage of the total pension liability 455,656 485,930 (30,274) 106.64 % Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return 2.75% 4.50%, including inflation 7.30%, net of pension plan investment expense, including inflation Mortality rates were based on the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB and set forward two years for both males and females for the period after retirement and for dependent beneficiaries. For the period after disability retirement, the RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB and set back seven years for males and set forward three years for females is used. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the GJRS Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the GJRS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the GJRS Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the table on the following page: (continued) 59 Financial Section Notes to Financial Statements June 30, 2020 Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total * Rates shown are net of inflation. Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 Discount rate: The discount rate used to measure the total pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate: The following table presents the net pension liability (asset), calculated using the discount rate of 7.30%, as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): Employers' and nonemployer net pension liability (asset) 1% Decrease (6.30%) $11,449 Current discount rate (7.30%) (30,274) 1% Increase (8.30%) (66,607) Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total pension liability is based. An expected total pension liability is determined as of June 30, 2020 using standard roll-forward techniques for the actual total pension liability both for and after reflecting two one-time 3% payments that were granted to certain retired members and beneficiaries effective July 2019 and January 2020. The difference between these two amounts is shown as a change in benefit terms. The roll forward calculation adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year and then applies the expected investment rate of return for the year. (12) Net Pension Liability of Employer GMPF The components of the net pension liability of the participating employer at June 30, 2020 were as follows (dollars in thousands): Total pension liability $ Plan fiduciary net position Employer's net pension liability $ Plan fiduciary net position as a percentage of the total pension liability 47,883 28,967 18,916 60.50 % (continued) 60 Financial Section Notes to Financial Statements June 30, 2020 Actuarial assumptions: The total pension liability was detemined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return 2.75% n/a 7.30%, net of pension plan investment expense, including inflation Postretirement mortality rates were based on the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward two years for both males and females) for the period after service retirement. The RP-2000 Employee Mortality Table projected to 2025 using projection scale BB was used for deaths in active service. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the ERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the ERS Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total * Rates shown are net of inflation. Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 Discount rate: The discount rate used to measure the total pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate: The following table presents the net pension liability (asset), calculated using the discount rate of 7.30%, as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): (continued) 61 Financial Section Notes to Financial Statements June 30, 2020 Employers' net pension liability 1% Decrease (6.30%) $25,519 Current discount rate (7.30%) 18,916 1% Increase (8.30%) 13,537 Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total pension liability is based. An expected total pension liability is determined as of June 30, 2020 using standard roll-forward techniques. The roll-forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. (13) Net OPEB Liability of Employers - SEAD-OPEB The components of the net OPEB liability (asset) of the participating employers at June 30, 2020 were as follows (dollars in thousands): Total OPEB liability Plan fiduciary net position Employers' net OPEB liability (asset) Plan fiduciary net position as a percentage of the total OPEB liability $ 972,700 1,256,718 $ (284,018) 129.20 % Actuarial assumptions: The total OPEB liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases: ERS GJRS LRS Investment rate of return Healthcare cost trend rate 2.75% 3.25% - 7.00% 4.50% n/a 7.30%, net of OPEB plan investment expense, including inflation n/a Postretirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward two years for both males and females for service retirements and dependent beneficiaries. There is a margin for future mortality improvement in the tables used by the plan. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. Subsequent to the June 30, 2017 measurement date, the SEAD Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the SEAD Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 actuarial valuation. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan (continued) 62 Financial Section Notes to Financial Statements June 30, 2020 investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total * Rates shown are net of inflation. Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 Discount rate: The discount rate used to measure the total OPEB liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the net OPEB liability to changes in the discount rate: The following table presents the net OPEB liability (asset), calculated using the discount rate of 7.30%, as well as what the net OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current rate (dollars in thousands): Employers' net OPEB liability (asset) 1% Decrease (6.30%) $(157,545) Current discount rate (7.30%) (284,018) 1% Increase (8.30%) (388,280) Actuarial valuation date: June 30, 2019 is the actuarial valuation date upon which the total OPEB liability is based. An expected total OPEB liability is determined as of June 30, 2020 using standard roll-forward techniques. The roll-forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. (14) System Employees' Other Postemployment Benefits (OPEB) Certain of the System's employees are members of the SEAD-OPEB and the Georgia State Employees Postretirement Benefit Fund. The notes to the financial statements that follow and required supplementary information on pages 81 and 82 are presented from the perspective of the System as an employer. General Information about the SEAD-OPEB Plan description: SEAD-OPEB was created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., 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, and GJRS. The plan is a cost-sharing multiple-employer defined benefit (continued) 63 Financial Section Notes to Financial Statements June 30, 2020 other postemployment benefit plan as defined in GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The SEAD-OPEB trust fund accumulates the premiums received from the aforementioned retirement plans, including interest earned on deposits and investments of such payments. Benefits provided: The amount of insurance for a retiree with creditable service prior to April 1, 1964 is the full amount of insurance in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964 is 70% of the amount of insurance in effect at age 60 or at termination, if earlier. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the retiree. Contributions: Georgia law provides that employee contributions to the plan shall be in an amount established by the SEAD Board not to exceed one-half of 1% of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2020. OPEB Liabilities and OPEB Expense related to SEAD-OPEB At June 30, 2020, the System reported an asset of $569.1 thousand for its proportionate share of the net OPEB asset. The net OPEB asset was measured as of June 30, 2019. The total OPEB asset used to calculate the net OPEB asset was based on an actuarial valuation as of June 30, 2018. An expected total OPEB asset as of June 30, 2019 was determined using standard roll-forward techniques. The System's proportionate share of the net OPEB asset was based on actual member salaries reported to the SEAD-OPEB plan during the fiscal year ended June 30, 2019. At June 30, 2019, the employer's proportionate share was 0.201267%, which was an increase of 0.001203% from its proportionate share measured as of June 30, 2018. For the year ended June 30, 2020, the System recognized a reduction of OPEB expense of $51.7 thousand. Actuarial assumptions: The total SEAD-OPEB asset as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018 using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increase Investment rate of return Healthcare cost trend rate 2.75% 3.25 - 7.00%, including inflation 7.30%, net of OPEB plan investment expense, including inflation n/a Postretirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 2 years for both males and females for service retirements and dependent beneficiaries. There is a margin for future mortality improvement in the tables used by the plan. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the investment rate of return. The long-term expected rate of return on SEAD-OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the table on the following page: (continued) 64 Financial Section Notes to Financial Statements June 30, 2020 Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 * Rates shown are net of inflation. Discount rate: The discount rate used to measure the total SEAD-OPEB liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the SEADOPEB plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on SEAD-OPEB plan investments was applied to all periods of projected benefit payments to determine the total SEAD-OPEB liability. Sensitivity of the System's proportionate share of the net SEAD-OPEB liability to changes in the discount rate: The following presents the System's proportionate share of the net SEAD-OPEB liability (asset) calculated using the discount rate of 7.30%, as well as what the System's proportionate share of the net SEAD-OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower 6.30% or 1-percentage-point higher 8.30% than the current rate (dollars in thousands): System's proportionate share of the net OPEB liability (asset) 1% Decrease (6.30%) $(315) Current discount rate (7.30%) (569) 1% Increase (8.30%) (778) SEAD-OPEB plan fiduciary net position: Detailed information about the SEAD-OPEB plan's fiduciary net position is presented in the Combining Statement of Fiduciary Net Position on page 25 and the Combining Statement of Changes in Fiduciary Net Postion on page 27. General Information about the Georgia State Employees Postemployment Benefit Fund (State OPEB Fund) Plan description: Employees of State of Georgia (State) organizations as defined in 45-18-25 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the State OPEB Fund - a cost-sharing multipleemployer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 45 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board. Benefits provided: The State OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for employees of State organizations (including technical colleges) and other entities authorized by law to contract with the Department of Community Health (DCH) for inclusion in the plan. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from ERS, LRS, GJRS, Teachers Retirement System (TRS) or PSERS. If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare-eligible retiree plan options include Health Reimbursement Arrangement (continued) 65 Financial Section Notes to Financial Statements June 30, 2020 (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The State OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the State OPEB Fund is permitted. Contributions: As established by the DCH Board of Trustees, the State OPEB Fund is funded on a pay-as-you-go basis, with additional contributions by the State as available and deemed necessary; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the State OPEB Fund from the System were $288.3 thousand for the year ended June 30, 2020. Active employees are not required to contribute to the State OPEB Fund. OPEB Liabilities and OPEB Expense related to State OPEB Fund At June 30, 2020, the System reported a liability of approximately $2.4 million for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2018. An expected total OPEB liability as of June 30, 2019 was determined using standard roll-forward techniques. The System's proportionate share of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2019. At June 30, 2019, the System's proportionate share was 0.189291%, which was a decrease of 0.007707% from its proportionate share measured as of June 30, 2018. For the year ended June 30, 2020, the System recognized a reduction in OPEB expense of $807.8 thousand. Actuarial assumptions: The total OPEB liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2019: Inflation Salary increase Investment rate of return Healthcare trend rate: Pre-Medicare Eligible Medicare Eligible Ultimate trend rate: Pre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate Pre-Medicare Eligible Medicare Eligible 2.75% 3.25 - 7.00%, including inflation 7.30%, compounded annually, net of OPEB plan investment expense, including inflation 7.25% 5.38% 4.75% 4.75% 2028 2022 Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB. The RP-2000 Combined Mortality Table projected to 2025 with projection scale BB and set forward 2 years or both males and females is used for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB and set back 7 years for males and set forward 3 years for females is used for the period after disability retirement. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014, and was adopted by the ERS Board on December 17, 2015. The next experience study for ERS will be for the period ending June 30, 2019. (continued) 66 Financial Section Notes to Financial Statements June 30, 2020 The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2018 valuation were based on a review of recent plan experience done concurrently with the June 30, 2018 valuation. Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation. The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total Target allocation 30.00 % 46.20 1.30 12.40 5.10 5.00 100.00 % Long-term expected real rate of return* (0.10)% 8.90 13.20 8.90 10.90 12.00 * Rates shown are net of inflation. Discount rate: The discount rate has changed since the prior measurement date from 5.22% to 7.30%. In order to measure the total OPEB liability for the State OPEB Fund, a single equivalent interest rate of 7.30% was used as the discount rate. The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2120. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees indefinitely. Therefore, the calculated discount rate of 7.30% was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the System's proportionate share of the net State OPEB liability to changes in the discount rate: The following presents the System's proportionate share of the net OPEB liability calculated using the discount rate of 7.30%, as well as what the System's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.30%) or 1-percentage-point higher (8.30%) than the current discount rate (dollars in thousands): System's proportionate share of the net OPEB liability 1% Decrease (6.30%) $2,909 Current discount rate (7.30%) 2,350 1% Increase (8.30%) 1,874 (continued) 67 Financial Section Notes to Financial Statements June 30, 2020 Sensitivity of the System's proportionate share of the net State OPEB liability to changes in the healthcare cost trend rates: The following presents the System's proportionate share of the net OPEB liability, as well as what the System's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates (dollars in thousands): System's proportionate share of the net OPEB liability 1% Decrease $1,806 Current healthcare cost trend rate 2,350 1% Increase 2,995 State OPEB plan fiduciary net position: Detailed information about the State OPEB Benefit plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR) which is publicly available at https:// sao.georgia.gov/comprehensive-annual-financial-reports. Deferred Outflows of Resources and Deferred Inflows of Resources for SEAD-OPEB and State OPEB Fund At June 30, 2020, the System reported deferred outflows of resources and deferred inflows of resources related to SEAD-OPEB and the State OPEB Fund from the following sources (dollars in thousands): Deferred outflows of resources: Difference between expected and actual experience Change of assumptions Net difference between projected and actual earnings on plan investments Change in proportion and differences between the System's contributions and proportionate share of contributions System's contributions subsequent to the measurement date Total deferred outflows of resources SEAD-OPEB State OPEB plan fund $ 3 -- 12 -- -- 158 -- 220 -- 288 $ 15 666 Total 3 12 158 220 288 681 Deferred inflows of resources: Difference between expected and actual experience Change of assumptions Net difference between projected and actual earnings on plan investments Change in proportion and differences between the System's contributions and proportionate share of contributions Total deferred inflows of resources SEAD-OPEB State OPEB plan fund $ -- -- 52 815 2,193 -- 6 $ 58 128 3,136 Total 815 2,193 52 134 3,194 (continued) 68 Financial Section Notes to Financial Statements June 30, 2020 SEAD-OPEB amounts reported as deferred outflows of resources and deferred inflows of resources related to SEAD-OPEB will be recognized in OPEB expense as follows (dollars in thousands): Year ended June 30: 2021 2022 2023 2024 ($16) (25) (5) 3 State OPEB Fund employer contributions subsequent to the measurement date of $288.3 thousand are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to State OPEB Fund will be recognized in OPEB expense as follows (dollars in thousands): Year ended June 30: 2021 2022 2023 2024 ($1,110) (981) (553) (114) 69 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Employers' and Nonemployer Contributions - Defined Benefit Plans Year ended June 30, 2020 (In thousands) Employees' Retirement System Public School Employees Retirement System1 Legislative Retirement System2 Year ended 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Actuarially determined contribution (a) $ 261,132 273,623 358,376 428,982 517,220 595,124 624,623 650,073 649,209 643,857 7,509 15,884 24,829 27,160 28,461 28,580 26,277 29,276 30,263 32,496 -- -- -- -- -- -- -- -- -- -- Contributions in relation to the actuarially determined contribution (b) 261,132 274,034 358,992 429,752 518,163 595,566 625,281 652,167 649,209 643,857 7,509 15,884 24,829 27,160 28,461 28,580 26,277 29,276 30,263 32,496 75 76 128 45 -- -- -- -- -- -- Contribution deficiency (excess) (a-b) -- (411) (616) (770) (943) (442) (658) (2,094) -- -- -- -- -- -- -- -- -- -- -- -- (75) (76) (128) (45) -- -- -- -- -- -- Covered payroll (c) 2,486,780 2,414,884 2,335,773 2,335,773 2,353,225 2,390,457 2,565,918 2,635,896 2,615,491 2,614,856 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 3,780 3,815 3,867 3,850 3,764 3,875 3,830 3,844 3,833 3,798 Contributions as a percentage of covered payroll (b/c) 10.5 % 11.3 15.4 18.4 22.0 24.9 24.4 24.7 24.8 24.6 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2.0 2.0 3.3 1.2 n/a n/a n/a n/a n/a n/a (continued) 70 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Employers' and Nonemployer Contributions - Defined Benefit Plans Year ended June 30, 2020 (In thousands) Georgia Judicial Retirement System Georgia Military Pension Fund3 State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund Year ended 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Actuarially determined contribution (a) $ 1,932 2,083 2,279 2,375 4,261 7,623 6,684 6,566 5,254 6,464 1,282 1,521 1,703 1,892 1,893 1,990 2,018 2,377 2,537 2,611 -- 12,724 5,009 -- -- -- -- -- -- -- Contributions in relation to the actuarially determined contribution (b) 1,932 2,083 2,279 2,375 4,261 7,623 6,684 6,566 5,254 6,464 1,282 1,521 1,703 1,892 1,893 1,990 2,018 2,377 2,537 2,611 -- 12,724 5,009 -- -- -- -- -- -- -- Contribution deficiency (excess) (a-b) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Covered payroll (c) 52,331 51,898 52,807 54,787 54,272 57,401 59,695 60,572 60,532 63,835 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2,085,902 1,855,185 n/a n/a n/a n/a n/a n/a n/a Contributions as a percentage of covered payroll (b/c) 3.7 % 4.0 4.3 4.3 7.9 13.3 11.2 10.8 8.7 10.1 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 0.6 0.3 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. 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 if hired prior to July 1, 2012 and $10 per month, per member, for nine months, if hired after July 1,2012. 2 The Georgia General Assembly made contributions in some years that were not required. 3 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. 71 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Employees' Retirement System: Total pension liability Plan fiduciary net position Employers' and nonemployer net pension liability Plan fiduciary net position as a percentage of the total pension liability Covered payroll Employers' and nonemployer net pension liability as a percentage of covered payroll $ 17,717,243 13,502,286 $ 4,214,957 76.21 % $ 2,614,856 161.19 % 17,744,003 13,617,472 4,126,531 76.74 % 2,615,491 157.77 % 17,628,219 13,517,186 4,111,033 76.68 % 2,635,896 155.96 % 17,159,634 13,098,299 4,061,335 76.33 % 2,565,918 158.28 % 17,103,987 12,373,567 4,730,420 72.34 % 2,390,457 197.89 % 17,019,362 12,967,964 4,051,398 76.20 % 2,353,225 172.16 % 17,042,149 13,291,531 3,750,618 77.99 % 2,335,773 160.57 % Public School Employees Retirement System: Total pension liability $ Plan fiduciary net position Employers' and nonemployer net pension liability $ Plan fiduciary net position as a percentage of the total pension liability Covered payroll Employers' and nonemployer net pension liability as a percentage of covered payroll 1,134,724 958,248 176,476 84.45 % n/a n/a 1,107,495 941,587 165,908 85.02 % n/a n/a 1,072,165 914,138 158,027 85.26 % n/a n/a 1,013,163 868,134 145,029 85.69 % n/a n/a 992,292 803,775 188,517 81.00 % n/a n/a 946,200 823,150 123,050 87.00 % n/a n/a 930,745 821,733 109,012 88.29 % n/a n/a Legislative Retirement System: Total pension liability $ Plan fiduciary net position Employer's net pension asset $ Plan fiduciary net position as a percentage of the total pension liability Covered payroll Employer's net pension asset as a percentage of covered payroll 26,081 34,568 (8,487) 132.54 % 3,798 (223.46)% 26,166 34,540 (8,374) 132.00 % n/a n/a 26,304 34,189 (7,885) 129.98 % n/a n/a 25,898 32,981 (7,083) 127.35 % n/a n/a 26,142 30,975 (4,833) 118.49 % n/a n/a 25,271 32,359 (7,088) 128.05 % n/a n/a 25,216 32,794 (7,578) 130.05 % n/a n/a Georgia Judicial Retirement System: Total pension liability $ Plan fiduciary net position Employers' and nonemployer net pension asset $ Plan fiduciary net position as a percentage of the total pension liability Covered payroll $ Employers' and nonemployer net pension asset as a percentage of covered payroll 455,656 485,930 (30,274) 106.64 % 63,835 47.43 % 440,041 479,372 (39,331) 108.94 % 60,532 64.98 % 428,624 466,657 (38,033) 108.87 % 60,572 62.79 % 394,736 441,182 (46,446) 111.77 % 59,695 77.81 % 368,669 403,011 (34,342) 109.32 % 57,401 59.83 % 357,081 404,852 (47,771) 113.38 % 54,272 88.02 % 350,443 400,790 (50,347) 114.37 % 54,787 91.90 % (continued) 72 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Georgia Military Pension Fund: Total pension liability $ Plan fiduciary net position Employers' net pension liability $ Plan fiduciary net position as a percentage of the total pension liability Covered payroll Employers' net pension liability as a percentage of covered payroll 47,883 28,967 18,916 60.50 % n/a n/a 45,639 26,417 19,222 57.88 % n/a n/a 43,204 23,653 19,551 54.75 % n/a n/a 40,085 20,711 19,374 51.67 % n/a n/a 36,950 17,717 19,233 47.95 % n/a n/a 33,343 16,712 16,631 50.12 % n/a n/a 31,511 15,251 16,260 48.40 % n/a n/a State Employees' Assurance Department - Retired and Vested Inactive Members Trust Fund: Total pension liability Plan fiduciary net position Employer's net OPEB asset Plan fiduciary net position as a percentage of the total OPEB liability Covered payroll Employers' net OPEB asset as a percentage of covered payroll $ 972,700 1,256,718 $ (284,018) 129.20 % $ 1,135,433 25.01 % 951,091 1,233,856 (282,765) 129.73 % 1,211,274 23.34 % 918,816 1,189,462 (270,646) 129.46 % 1,328,485 20.37 % Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. 861,346 1,121,251 (259,905) 130.17 % 1,383,860 18.78 % -- -- -- -- % -- -- -- -- -- -- % -- -- -- -- -- -- % -- -- 73 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Employee's Retirement System: Total pension liability: Service cost Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total pension liability Total pension liability-beginning Total pension liability-end (a) Plan fiduciary net position: Contributions-employer Contributions-nonemployer Contributions-member Administrative expense allotment Net investment income Benefit payments Administrative expense Refunds of contributions Other1 Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net pension liability-end (a)-(b) $ 132,004 1,240,887 65,702 25,736 -- (1,484,445) (6,644) (26,760) 17,744,003 17,717,243 634,108 9,749 35,837 10 703,840 (1,484,445) (7,641) (6,644) -- (115,186) 13,617,472 13,502,286 $ 4,214,957 135,679 1,233,882 42,097 155,573 -- (1,443,756) (7,691) 115,784 17,628,219 17,744,003 638,989 10,220 36,252 10 873,404 (1,443,756) (7,142) (7,691) -- 100,286 13,517,186 13,617,472 4,126,531 129,294 1,233,689 31,097 180,655 314,733 (1,413,298) (7,585) 468,585 17,159,634 17,628,219 639,302 12,865 37,130 10 1,166,013 (1,413,298) (8,056) (7,585) (7,494) 418,887 13,098,299 13,517,186 4,111,033 125,910 1,230,175 30,563 72,315 -- (1,394,283) (9,033) 55,647 17,103,987 17,159,634 613,201 12,080 35,863 10 1,475,626 (1,394,283) (8,732) (9,033) -- 724,732 12,373,567 13,098,299 4,061,335 143,043 1,225,650 -- (238) 70,890 (1,347,633) (7,087) 84,625 17,019,362 17,103,987 583,082 12,484 31,961 10 141,292 (1,347,633) (8,506) (7,087) -- (594,397) 12,967,964 12,373,567 4,730,420 145,045 1,227,846 -- (53,950) -- (1,334,278) (7,450) (22,787) 17,042,149 17,019,362 505,668 12,495 33,713 10 474,147 (1,334,278) (7,872) (7,450) -- (323,567) 13,291,531 12,967,964 4,051,398 150,075 1,224,380 -- -- -- (1,305,998) (8,757) 59,700 16,982,449 17,042,149 418,807 10,945 32,423 -- 2,021,748 (1,305,998) (7,440) (8,757) -- 1,161,728 12,129,803 13,291,531 3,750,618 1 The System is a participating employer in the Georgia State Employees Postemployment Benefit Fund and the State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund. Pursuant to the requirements of GASB Statement No. 75, the fiscal year 2018 beginning Fiduciary Net Position was restated by $7,494,507. The restatement of net position was made for reporting purposes to reflect the impact of recording the initial deferred outflows of resources, net OPEB liability, and net OPEB asset. For actuarial purposes, this adjustment iwas recognized in fiscal year 2018 and beginning fiduciary net position was not restated. Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. (continued) 74 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Public School Employees Retirement System: Total pension liability: Service cost Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total pension liability Total pension liability-beginning Total pension liability-end (a) Plan fiduciary net position: Contributions-employer Contributions-member Net investment income Benefit payments Administrative expense Refunds of contributions Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net pension liability-end (a)-(b) $ 14,017 78,414 13,680 (12,220) -- (66,090) (572) 27,229 1,107,495 1,134,724 32,496 2,338 49,913 (66,090) (1,424) (572) 16,661 941,587 958,248 $ 176,476 13,762 75,923 18,050 (8,159) -- (63,637) (609) 35,330 1,072,165 1,107,495 30,263 2,256 60,553 (63,637) (1,377) (609) 27,449 914,138 941,587 165,908 13,180 73,643 17,289 (3,943) 21,354 (61,820) (701) 59,002 1,013,163 1,072,165 29,276 2,162 78,418 (61,820) (1,331) (701) 46,004 868,134 914,138 158,027 12,788 72,157 -- (3,665) -- (59,378) (1,031) 20,871 992,292 1,013,163 26,277 2,084 97,715 (59,378) (1,308) (1,031) 64,359 803,775 868,134 145,029 11,952 68,776 -- (9,483) 33,215 (57,903) (465) 46,092 946,200 992,292 28,580 1,925 9,809 (57,903) (1,321) (465) (19,375) 823,150 803,775 188,517 12,088 67,652 -- (6,858) -- (56,972) (455) 15,455 930,745 946,200 28,461 1,800 30,129 (56,972) (1,545) (456) 1,417 821,733 823,150 123,050 11,049 66,143 -- -- -- (56,189) (514) 20,489 910,256 930,745 27,160 1,659 123,799 (56,189) (1,450) (514) 94,465 727,268 821,733 109,012 Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. (continued) 75 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Legislative Retirement System: Total pension liability: Service cost $ Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total pension liability Total pension liability-beginning Total pension liability-end (a) Plan fiduciary net position: Contributions-employer Contributions-member Net investment income Benefit payments Administrative expense Refunds of contributions Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net pension asset-end (a)-(b) $ 372 1,844 -- (485) -- (1,795) (21) (85) 26,166 26,081 -- 325 1,824 (1,795) (305) (21) 28 34,540 34,568 (8,487) 366 1,850 -- (428) -- (1,856) (70) (138) 26,304 26,166 -- 339 2,228 (1,856) (290) (70) 351 34,189 34,540 (8,374) 359 1,875 -- (481) 447 (1,772) (22) 406 25,898 26,304 -- 323 2,962 (1,772) (283) (22) 1,208 32,981 34,189 (7,885) 357 1,892 -- (655) -- (1,763) (75) (244) 26,142 25,898 -- 327 3,741 (1,763) (224) (75) 2,006 30,975 32,981 (7,083) 331 1,829 -- (465) 938 (1,724) (38) 871 25,271 26,142 -- 328 363 (1,724) (313) (38) (1,384) 32,359 30,975 (4,833) 338 1,824 -- (325) -- (1,756) (26) 55 25,216 25,271 -- 327 1,189 (1,756) (169) (26) (435) 32,794 32,359 (7,088) 344 1,799 -- -- -- (1,801) (30) 312 24,904 25,216 45 282 4,969 (1,801) (152) (30) 3,313 29,481 32,794 (7,578) Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. (continued) 76 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Georgia Judicial Retirement System: Total pension liability: Service cost $ Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total pension liability Total pension liability-beginning Total pension liability-end (a) Plan fiduciary net position: Contributions-employer Contributions-nonemployer Contributions-member Net investment income Benefit payments Administrative expense Refunds of contributions Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net pension asset-end (a)-(b) $ 13,375 31,047 693 (24) -- (29,263) (213) 15,615 440,041 455,656 4,022 2,442 5,005 25,414 (29,263) (849) (213) 6,558 479,372 485,930 (30,274) 13,350 30,267 1,065 (5,250) -- (27,462) (553) 11,417 428,624 440,041 3,117 2,137 5,469 30,827 (27,462) (820) (553) 12,715 466,657 479,372 (39,331) 13,019 28,666 3,442 6,379 7,466 (24,934) (150) 33,888 394,736 428,624 4,725 1,841 4,910 39,877 (24,934) (794) (150) 25,475 441,182 466,657 (38,033) 12,514 26,826 3,419 5,258 -- (21,784) (166) 26,067 368,669 394,736 4,081 2,603 4,906 49,259 (21,784) (728) (166) 38,171 403,011 441,182 (46,446) 12,713 26,058 -- (3,603) (4,308) (19,011) (261) 11,588 357,081 368,669 4,754 2,869 5,507 5,055 (19,011) (754) (261) (1,841) 404,852 403,011 (34,342) 7,751 25,566 -- (7,542) -- (18,365) (772) 6,638 350,443 357,081 2,696 1,564 5,061 14,697 (18,365) (819) (772) 4,062 400,790 404,852 (47,771) 7,584 24,530 -- -- -- (17,441) (22) 14,651 335,792 350,443 1,373 1,002 4,731 60,012 (17,441) (754) (22) 48,901 351,889 400,790 (50,347) Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. (continued) 77 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Georgia Military Pension Fund: Total pension liability: Service cost $ Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total pension liability Total pension liability-beginning Total pension liability-end (a) Plan fiduciary net position: Contributions-employer Contributions-member Net investment income Benefit payments Administrative expense Refunds of contributions Other Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net pension liability-end (a)-(b) $ 95 3,284 -- 162 -- (1,297) -- 2,244 45,639 47,883 2,611 -- 1,485 (1,297) (249) -- -- 2,550 26,417 28,967 18,916 97 3,109 -- 449 -- (1,220) -- 2,435 43,204 45,639 2,537 -- 1,683 (1,220) (236) -- -- 2,764 23,653 26,417 19,222 84 2,964 -- 116 1,093 (1,138) -- 3,119 40,085 43,204 2,377 -- 1,928 (1,138) (225) -- -- 2,942 20,711 23,653 19,551 89 2,732 -- 1,356 -- (1,042) -- 3,135 36,950 40,085 2,018 -- 2,262 (1,042) (244) -- -- 2,994 17,717 20,711 19,374 73 2,465 -- 950 1,082 (963) -- 3,607 33,343 36,950 1,990 -- 240 (963) (262) -- -- 1,005 16,712 17,717 19,233 73 2,330 -- 326 -- (897) -- 1,832 31,511 33,343 1,893 -- 585 (896) (121) -- -- 1,461 15,251 16,712 16,631 73 2,223 -- -- -- (841) -- 1,455 30,056 31,511 1,892 -- 2,179 (841) (110) -- -- 3,120 12,131 15,251 16,260 Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. (continued) 78 Financial Section Required Supplementary Information (UNAUDITED) Schedules of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Statement Employees' Assurance Department Retired and Vested Inactive Members Trust Fund: Total OPEB Liability: Service cost $ Interest Benefit changes Differences between expected and actual experience Changes of assumptions Benefit payments Refunds of contributions Net change in total OPEB liability Total OPEB liability-beginning Total OPEB liability-end Plan fiduciary net position: Contributions - employer Insurance premiums - member Net investment income Benefit payments Administrative expense Refunds of contributions Other Net change in plan fiduciary net position Plan fiduciary net position-beginning Plan fiduciary net position-end (b) Net OPEB asset-end (a)-(b) $ 3,237 67,796 -- (4,670) -- (44,754) -- 21,609 951,091 972,700 -- 3,088 65,248 (44,754) (720) -- -- 22,862 1,233,856 1,256,718 (284,018) 3,617 65,708 -- 366 -- (37,416) -- 32,275 918,816 951,091 -- 3,328 79,193 (37,416) (716) -- 5 44,394 1,189,462 1,233,856 (282,765) 3,695 63,242 -- 4,697 22,085 (36,249) -- 57,470 861,346 918,816 -- 3,599 101,542 (36,249) (681) -- -- 68,211 1,121,251 1,189,462 (270,646) 3,959 61,076 -- -- -- (36,058) -- 28,977 832,369 861,346 1 3,793 125,550 (36,058) (576) -- -- 92,710 1,028,541 1,121,251 (259,905) Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. 79 Financial Section Required Supplementary Information (UNAUDITED) Schedule of Investment Returns Year ended June 30, 2020 Pooled Investment Fund: Annual money-weighted rate of return, net of investment expense 2020 2019 2018 (3.6)% (1.8)% 0.6% Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedule and accompanying independent auditors' report. 2017 2.9% 2016 2015 2014 (7.2)% (5.3)% 6.0% 80 Financial Section Required Supplementary Information (UNAUDITED) Schedules of the System's Proportionate Share of the Net OPEB Liability Year ended June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 SEAD-OPEB: System's proportion of the net OPEB asset System's proportionate share of the net OPEB asset $ System's covered payroll System's proportionate share of the net OPEB asset as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total OPEB asset 0.201267 % (569) $ 2,567 (22.17) % 129.73 % 0.200064 % (541) $ 2,770 $ (19.55) % 129.46 % 0.192864 % (501) 2,809 (17.85) % 130.17 % State OPEB Fund: System's proportion of the net OPEB liability System's proportionate share of the net OPEB liability $ System's covered payroll System's proportionate share of the net OPEB liability as a percentage of its covered payroll System's fiduciary net position as a percentage of the total OPEB liability 0.189291 % 2,350 $ 5,578 42.13 % 56.57 % 0.181584 % 4,749 $ 5,415 $ 87.71 % 31.48 % 0.185830 % 7,571 5,265 143.81 % 17.34 % Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedules and accompanying independent auditors' report. 81 Financial Section Required Supplementary Information (UNAUDITED) Schedules of the System's Contributions to OPEB Plans Year ended June 30, 2020 (In thousands) June 30, 2020 June 30, 2019 June 30, 2018 SEAD-OPEB: Contractually required contribution* Contributions in relation to the contractually required contribution Contribution deficiency (excess) System's covered payroll Contributions as a percentage of a covered payroll $ -- $ -- $ -- -- -- -- -- -- -- 2,524 2,567 2,770 -- % -- % -- % State OPEB Fund: Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) System's covered payroll Contributions as a percentage of a covered payroll $ 288 $ 1,012 $ 905 288 1,012 905 -- -- -- 5,716 5,578 5,415 5.04 % 18.15 % 16.71 % *Employer contributions are not currently required for the SEAD-OPEB plan. Schedules above are intended to show information for 10 years. Additional years will be displayed as they become available. See accompanying notes to required supplementary schedules and accompanying independent auditors' report. 82 Financial Section Notes to Required Supplementary Information (UNAUDITED) June 30, 2020 Required Supplementary Information Schedules for the System as the Plan: (1) Schedule of Employers' and Nonemployer Contributions Defined Benefit Plans This schedule presents the required contributions and the percent of required contributions actually contributed. (2) Schedule of Employers' and Nonemployer Net Pension/OPEB Liability and Related Ratios Defined Benefit Plans The components of the net pension/OPEB liability as of the fiscal year end and the fiduciary net position as a percentage of the total pension/OPEB liability as of that date are presented in this schedule. This trend information will be accumulated to display a 10-year presentation. (3) Schedule of Changes in Employers' and Nonemployer Net Pension/OPEB Liability Defined Benefit Plans Net pension/OPEB liability, which is measured as total pension/OPEB liability less the amount of the fiduciary net position, is presented in this schedule. This trend information will be accumulated to display a 10-year presentation. (4) Schedule of Investment Returns This schedule presents historical trend information about the annual money-weighted rate of return on plan investments, net of plan investment expense. This trend information will be accumulated to display a 10-year presentation. (5) Individual Plan Information This note provides information about changes of benefit terms, changes of assumptions, and methods and assumptions used in calculations of actuarially determined contributions. (a) Employees' Retirement System Changes of benefit terms A one-time 3% payment was granted to certain retirees and beneficiaries effective July 2016. A one-time 3% payment was granted to certain retirees and beneficiaries effective July 2017. Two one-time 2% payments were granted to certain retirees and beneficiaries effective July 2018 and January 2019. Two one-time 3% payments were granted to certain retirees and beneficiaries effective July 2019 and January 2020. Changes of assumptions On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. Subsequent to the June 30, 2017 measurement date, the ERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the ERS Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (continued) 83 Financial Section Notes to Required Supplementary Information (UNAUDITED) June 30, 2020 (b) Public School Employees' Retirement System Changes of benefit terms The member contribution rate was increased from $4 to $10 per month for members joining the System on or after July 1, 2012. A 2% COLA was granted to certain retirees and beneficiaries effective July 2016. The monthly benefit accrual rate was increased from $14.75 to $15.00 per year of creditable service effective July 1, 2017. A 2% COLA was granted to certain retirees and beneficiaries effective July 2017. The monthly benefit accrual rate was increased from $15.00 to $15.25 per year of creditable service effective July 1, 2018. A 2% COLA was granted to certain retirees and beneficiaries effective July 2018. The monthly benefit accrual rate was increased from $15.25 to $15.50 per year of creditable service effective July 1, 2019. Two 1.5% COLAs were granted to certain retirees and beneficiaries effective July 2019 and January 2020. Changes of assumptions On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. Subsequent to the June 30, 2017 measurement date, the PSERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the PSERS Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (c) Legislative Retirement System Changes of benefit terms Two one-time 3% payments were granted to certain retirees and beneficiaries effective July 2019 and January 2020. Changes of assumptions On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. Subsequent to the June 30, 2017 measurement date, the LRS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the LRS Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (d) Georgia Judicial Retirement System Changes of benefit terms Spouses' benefits were changed for members joining the System on and after July 1, 2012. A 2% cost-of-living adjustment was granted to certain retired members and beneficiaries effective July 1, 2016. A 2% cost-of-living adjustment was granted to certain retired members and beneficiaries effective July 1, 2017. (continued) 84 Financial Section Notes to Required Supplementary Information (UNAUDITED) June 30, 2020 Two one-time 2% payments were granted to certain retired members and beneficiaries effective July 2018 and January 2019. Two one-time 3% payments were granted to certain retired members and beneficiaries effective July 2019 and January 2020. Changes of assumptions On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. Subsequent to the June 30, 2017 measurement date, the GJRS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation.In addition, based on the GJRS Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (e) Georgia Military Pension Fund Changes of benefit terms none Changes of assumptions On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. Subsequent to the June 30, 2017 measurement date, the GMPF Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the GMPF Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (f) State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund (SEADOPEB) as a plan Changes of benefit terms none Changes of assumptions Subsequent to the June 30, 2017 measurement date, the SEAD Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the SEAD Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (continued) 85 Financial Section Notes to Required Supplementary Information (UNAUDITED) June 30, 2020 The following actuarial methods and assumptions were used to determine the most recent contribution rates reported in the schedules of employer and nonemployer contributions calculated as of June 30, three years prior to the end of the first calendar year in which contributions are reported: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Cost of living adjustments ERS Entry age Level dollar, closed 16.5 years Five-year smoothed fair 2.75% 3.25 to 7.00% 7.50% net of pension plan investment expense, including inflation None PSERS Entry age Level dollar, closed 21.2 years Five-year smoothed fair 2.75% n/a 7.50% net of pension plan investment expense, including inflation 1.50% Semi-annually LRS Entry age Level dollar, open Infinite Five-year smoothed fair 2.75% n/a 7.50% net of pension plan investment expense, including inflation 3.00% Annually Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Cost of living adjustments GJRS Entry age Level percent of pay, closed 16.1 years Five-year smoothed fair 2.75% 4.50% 7.50% net of pension plan investment expense, including inflation None GMPF Entry age Level dollar, closed 16.5 years Five-year smoothed fair 2.75% n/a 7.50% net of pension plan investment expense, including inflation None Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases ERS JRS LRS Investment rate of return Cost of living adjustments SEAD - OPEB Entry age Level percent, open Infinite Fair Value of Assets 2.75% 3.25-7.00% 4.50% n/a 7.50% net of pension plan investment expense, including inflation None (continued) 86 Financial Section Notes to Required Supplementary Information (UNAUDITED) June 30, 2020 Required Supplementary Information Schedules for the System as a participating employer: (1) Schedules of the System's Proportionate Share of the Net OPEB Liability The information in this schedule presents historical information related to the OPEB liability that is recognized by the System in the current period financial statements. This trend information will be accumulated to display a 10 year presentation. (2) Schedules of the System's Contributions to OPEB Plans This schedule presents the required contributions and the percent of required contributions actually contributed. (3) Individual Plan Information This note provides information about changes of benefit terms, changes of assumptions, and methods and assumptions used in calculations of actuarially determined contributions. (a) SEAD-OPEB Changes of benefit terms none Changes of assumptions On December 17, 2015, the SEAD Board adopted recommended changes to the economic and demographic assumptions utilized by the Plan. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for June 30, 2017 actuarial valuation.In addition, based on the SEAD Board's new funding policy, the assumed investment rate of return was reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date, and remained unchanged for June 30, 2019. (b) State OPEB Fund Changes of benefit terms none Changes of assumptions The June 30, 2017 actuarial valuation was revised, for various factors, including the methodology used to determine how employees and retirees were assigned to each of the OPEB Funds and anticipated participation percentages. Current and former employees of State organizations (including technical colleges, community service boards and public health departments) are now assigned to the State OPEB fund based on their last employer payroll location: irrespective of retirement affiliation. The discount rate was updated from 3.09% as of June 30, 2016 to 3.60% as of June 30, 2017 to 5.22% as of June 30, 2018, and to 7.30% as of June 30, 2019. 87 Financial Section Additional Information Schedule of Administrative Expenses - Contributions and Expenses Year ended June 30, 2020 (In thousands) Contributions from fiduciary funds: Employees' Retirement System Public School Employees Retirement System Legislative Retirement System Georgia Judicial Retirement System Georgia Military Pension Fund Superior Court Judges Retirement Fund District Attorneys Retirement Fund Georgia Defined Contribution Plan 401(k) Plan 457 Plan State Employees' Assurance Department - OPEB Total fiduciary funds Contributions from proprietary fund: State Employees' Assurance Department Active Members Fund Total contributions Expenses: Personal services: Salaries and fringes Retirement contributions FICA Health insurance Miscellaneous Communications: Postage Publications and printing Telecommunications Travel Professional services: Accounting services Computer services Contracts Actuarial services Medical services Audit fees Legal services Management fees: Building maintenance Other services and charges: Temporary services Supplies and materials Repairs and maintenance Courier services Depreciation Miscellaneous Office equipment Total expenses Net income See accompanying independent auditors' report. $ 7,641 1,424 305 849 249 2 2 913 3,816 745 720 16,666 80 16,746 5,702 1,297 411 583 51 8,044 294 4 116 13 427 782 907 3,923 317 108 354 33 6,424 635 697 91 22 5 310 89 2 1,216 16,746 $ -- 88 (continued) Financial Section Additional Information Schedule of Investment Expenses Year ended June 30, 2020 (In thousands) Investment advisory and custodial fees Miscellaneous Total investment expenses See accompanying independent auditors' report. $ 8,359 12,791 $ 21,150 89 Investment Section Investing in Our Community ERSGA Staff volunteering with Habitat for Humanity Investment Section Investment Overview The first half of the fiscal year was essentially a continuation of the prior year, steady global growth and increasing geopolitical tensions. The second half of the year turned tumultuous as the markets first reacted to the economic effects of the COVID-19 pandemic, and then the monetary and fiscal response which followed. U.S. Real GDP ended up being down 9.5% for the fiscal year after an astonishing decline in the June quarter of 32.9% annualized. The sharp drop in global growth was truly a black swan type of event. In spite of the pandemic, U.S. equities returned 6% over the past year, while foreign markets were down less than 5%, as central banks flooded the world economies with liquidity. Longer-term periods for total equities were generally quite positive. We continually emphasize that the pension plan has a long-term investment horizon and that short-term concerns should not drive investment decisions. The System invests primarily in a mix of liquid, high-quality bonds and stocks. In addition, the System continues to build its private markets program in a disciplined manner. These types of investments further diversify the portfolio and 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 long periods of time. As in previous years, the bias to quality was a primary goal and was successfully met. "Conservation of Capital" and "Conservatism" remain the guiding principles for investment decisions. The Board of Trustees continues to use a diversified portfolio to accomplish these objectives. U.S. economic growth plummeted in the final six months of the year, pulling the year over year Real GDP down almost 10%. The sharp decline in the economy transitioned into a vigorous rebound by the end of the year as the nation began to open back up and the economy responded to the massive fiscal and monetary stimulus. Globally, the developed countries have largely followed a similar pattern to the U.S. The emerging markets were more differentiated in their responses, impacts and recoveries from the global shutdown. Economic and earnings growth for the next year are highly dependent on the course the COVID-19 virus takes. Studies undertaken to evaluate the investment returns of pension funds over very long-time horizons indicate that the asset allocation decision has the largest impact on the fund's returns. Although the returns for the various asset categories vary from year-to-year, over the long term, equities typically outperform fixed income and cash by a very wide margin. For that reason, the System has generally maintained significant equity exposure with the remainder of the fund invested in fixed income securities designed to generate income and preserve capital. terms and relative to an asset class index, by reducing emphasis on the short-term volatility of markets. The Daily Valuation Method, a time-weighted rate of return, was used to calculate returns in a manner consistent with the CFA Institute's objectives as stated in its publication "Global Investment Performance Standards Handbook," third edition. The return for the S&P 500 was 7.5%. The S&P MidCap 400 and the S&P SmallCap 600 indexes had returns of (6.7%) and (11.3%), respectively. Growth stocks generally outperformed value stocks by a wide margin for the year, while by sector, information technology had the best performance. Energy was the worst-performing sector again as energy prices collapsed due to high inventories and an oil price war by major producers. International market returns were negative. The MSCI EAFE Index returned (5.1%) and the Emerging Market Index had a return of (3.4%). Interestingly, although the emerging markets index outperformed the developed markets index, only 3 of the 26 emerging markets country indexes had positive performance compared to 9 of the 22 countries in the developed index. The three emerging market countries with positive performance, China, Korea and Taiwan, have the largest weightings in the index. Interest rates declined dramatically last year particularly on the short end of the yield curve, again in response to central bank policies. Nominal rates were barely positive, driving real rates into negative territory. The decline in yields drove bond prices higher resulting in the 10-year Treasury having a total return of 14.0% and the 30-year Treasury bond returning nearly 30% compared to the 1.4% return in Treasury bills. Higher quality corporate bonds also provided decent returns. We look at two fixed-income indexes to measure the bond market's performance. The Bloomberg Barclays Government / Credit Index had a return of 10.0%. It is a broad index containing corporate and governmentsponsored bonds as well as Treasuries. The FTSE Gov/ Corp AAA/AA had a return of 10.2% and is a broad index containing higher-rated corporate bonds as well as Treasuries and Government securities. In summary, despite unprecedented upheavals related to a global pandemic, 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, twenty, and thirty-year periods are presented in this section. Longer periods allow for a more valid evaluation of returns, both in absolute 91 Investment Section Pooled Investment Fund As of June 30, 2020 (in thousands) 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 Survivors Benefit Fund (SBF) Georgia Military Pension Fund (GMPF) Total Rates of Return 14.0 10.0 12.0 10.0 8.0 8.0 6.0 6.0 4.0 2.0 4.0 0.0 -2.0 2.0 -4.0 -6.0 0.0 1 Year 3 Year 5 Year 10 Year 20 Year 30 Year Equities MSCI ACWI ex US S&P 1500 $ 13,456,293 958,718 34,599 485,633 319,146 1,256,402 167,359 28,995 $ 16,707,145 1 Year 3 Year 5 Year 10 Year 20 Year 30 Year Fixed Income 1 month T bills Barclays Govt/Credit 10.0 8.0 6.0 4.0 2.0 0.0 1 Year 3 Year 5 Year 10 Year 20 Year 30 Year Total Portfolio CPI Equities S&P 1500 MSCI ACWI ex US Fixed Income Barclay's Govt/Credit 1 Month T-Bills Total Portfolio 1 year 3 year 5 year 10 year 20 year 30 year 3.23 % 7.64 % 8.17 % 11.61 % 5.16 % 8.93 % 6.08 % 9.91 % 10.20 % 13.75 % 6.20 % (4.80)% 1.13 % 2.26 % 4.97 % 9.87 % 5.40 % 4.11 % 3.54 % 5.17 % 6.54 % 10.02 % 5.87 % 4.74 % 4.13 % 5.30 % 6.14 % 1.37 % 1.64 % 1.09 % 0.57 % 1.49 % 2.49 % 5.48 % 7.18 % 7.02 % 9.15 % 5.72 % 8.31 % Note: Time-weighted rates of return are calculated using the Daily Valuation Method based on market rates of return. CPI 0.71 % 1.75 % 1.59 % 1.71 % 2.03 % 2.30 % 92 Investment Section Asset Allocation at Fair Value 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2020 2019 2018 Equities Mutual & Commingled Funds 2017 2016 Fixed Income Private Equity 2015 Investment Summary Asset Allocation as of June 30 (in percentages) Equities Fixed Income Mutual and Commingled Funds Private Equity 2020 60.9 % 26.9 10.2 2.0 2019 61.1 27.4 9.7 1.8 Total 100.0 % 100.0 2018 61.9 28.1 8.8 1.2 100.0 2017 63.9 27.1 8.2 0.8 100.0 2016 62.3 29.5 7.6 0.6 100.0 2015 65.3 27.2 7.2 0.3 100.0 Asset Allocation as of June 30 (in millions) Equities Fixed Income Mutual and Commingled Funds Private Equity 2020 $ 11,279 4,959 1,893 365 2019 11,138 4,984 1,769 335 Total $ 18,496 18,226 2018 11,140 5,040 1,599 222 18,001 2017 11,030 4,668 1,421 134 17,253 2016 10,005 4,733 1,226 94 16,058 2015 10,915 4,543 1,204 52 16,714 93 Investment Section Schedule of Fees and Commissions Year ended June 30, 2020 (In thousands) Investment Advisors' Fees: U.S. Equity $ International Equity Fixed Income Investment Commissions: U.S. Equity International Equity Transaction Fees: Miscellaneous*: Total Fees and Commissions $ *Includes capitalized fees not included in total investment expenses shown on page 89. 3,073 4,746 -- 947 1,332 376 21,565 32,039 94 Investment Section Twenty Largest Equity Holdings As of June 30, 2020 (In thousands) Shares 1,751,724 897,334 107,051 147,578 671,180 581,207 549,150 600,710 179,300 261,899 428,480 786,248 1,274,504 1,071,830 1,244,257 288,610 142,379 518,208 164,254 1,310,513 Company Fair Value Microsoft Corp. $ Apple Inc. Amazon.Com Inc. Alphabet Inc. SPDR S&P 500 Trust ETF Facebook Inc. Visa Inc. Johnson & Johnson Netflix Inc. UnitedHealth Group Berkshire Hathaway Inc. JPMorgan Chase & Co. Taiwan Semiconductor Manufacturing Company Limited Tencent Holdings Ltd. Verizon Communications Inc. Alibaba Group Holding Ltd. Adobe Inc. Procter & Gamble Co. ASML Holding NV Exxon Mobil Corp. 356,493 327,347 295,334 208,979 206,965 131,975 106,079 84,478 81,589 77,247 76,488 73,954 72,354 68,953 68,597 62,253 61,979 61,962 60,450 58,606 Top Twenty Equities Remaining Equities $ 2,542,082 8,735,659 Total Equities A complete listing is available upon written request, subject to restrictions of O.C.G.A. Section 47-1-14. $ 11,277,741 95 Investment Section Top 10 Fixed Income Holdings* As of June 30, 2020 Issuer US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. NOTE US TREAS. BOND US TREAS. BOND US TREAS. BOND INTEL CORP Year of Maturity 2024 2025 2025 2025 2023 2027 2039 2028 2049 2024 Interest Rate 2.2500 % 2.6250 2.5000 2.7500 1.5000 2.2500 3.5000 5.2500 3.0000 2.7000 Par Value (in thousands) $ 313,000 200,000 200,000 190,000 195,000 160,000 113,000 102,000 100,000 120,000 Fair Value (in thousands) $ 340,278 222,164 220,406 213,684 202,092 180,200 159,869 141,190 138,063 128,963 Total of 10 Largest ERS & GDCP Fixed Income Holdings Remaining Fixed Income Holdings Total ERS and Defined Contribution Fixed Income Securities 1,946,909 $ 3,012,538 $ 4,959,447 *A complete listing is available upon written request, subject to restrictions of O.C.G.A. Section 47-1-14. 96 Actuarial Section Serving Our Members for 70 Years ERSGA Outreach and Recognition See the Appendix for staff SCCP awards. Actuarial Section ERS 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com April 16, 2020 Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, 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, 2019. The report indicates that annual employer contributions at the rate of 19.88% of compensation for Old Plan Members, 24.63% of compensation for New Plan Members, and 21.57% of compensation for GSEPS Members for the fiscal year ending June 30, 2022 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 2019 session of the General Assembly. The valuation reflects two one-time 3% payments to certain retirees and beneficiaries effective July 2019 and January 2020. Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of investment expenses. Since the actual rate of return for the year ending June 30, 2019 was less than 7.30%, the assumed rate of return used in the current valuation remained at 7.30%. 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 financial reporting purposes meet the parameters set by Actuarial Standards of Practice (ASOPs). 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 reflected in the total unfunded accrued liability which is being amortized on a level dollar basis in accordance with the funding policy adopted by the Board. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 67 and 68. The necessary disclosure information is provided in separate supplemental reports. We have provided the following information and supporting schedules for the Actuarial Section of the Comprehensive Annual Financial Report: Summary of Actuarial Assumptions Schedule of Active Members Schedule of Funding Progress (continued) 98 Actuarial Section Schedule of Retirees Added to and Removed from Rolls Analysis of Change in Unfunded Accrued Liability Solvency Test Results 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 and the funding policy adopted by the Board. 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 99 Actuarial Section PSERS April 16, 2020 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com Board of Trustees Georgia Public School Employees Retirement System Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, 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, 2019. Based on a monthly benefit accrual rate of $15.50, which is effective July 1, 2019, the valuation indicates that annual employer contributions of $30,891,000 or $888.52 per active member for the fiscal year ending June 30, 2022 are sufficient to support the benefits of the System. Since the previous valuation, the monthly benefit accrual rate has been increased from $15.25 to $15.50 per year of creditable service with an effective date of July 1, 2019 for members retiring after August 1, 2012. In addition, the results of the valuation reflect that the Board granted a 1.50% cost-of-living adjustment (COLA) on January 1, 2020 to certain retired members and beneficiaries rather than the 1.50% anticipated cost-of-living adjustments to retired members on both July 1, 2019 and on January 1, 2020. Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of investment expenses. Since the actual rate of return for the year ending June 30, 2019 was less than 7.30%, the assumed rate of return used in the current valuation remained at 7.30%. 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 2019 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 financial reporting purposes meet the parameters set by Actuarial Standards of Practice (ASOPs). 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 total unfunded accrued liability which is being amortized as a level dollar per active member in accordance with the funding policy adopted by the Board. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 67 and 68. The necessary disclosure information is provided in separate supplemental reports. We have provided the following information and supporting schedules for the Actuarial Section of the Comprehensive Annual Financial Report: Summary of Actuarial Assumptions Schedule of Active Members (continued) 100 Actuarial Section Schedule of Funding Progress Schedule of Retirees Added to and Removed from Rolls Analysis of Change in Unfunded Accrued Liability Solvency Test Results 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 and the funding policy adopted by the Board. In our opinion the System is currently 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 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 101 Actuarial Section GJRS April 16, 2020 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com Board of Trustees Georgia Judicial Retirement System Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, Executive Director Members of the Board: Section 47-23-21 of the law governing the operation of the Georgia Judicial Retirement System 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, 2019. The report indicates that annual employer contributions at the rate of 8.81% of compensation for the fiscal year ending June 30, 2022 are sufficient to support the benefits of the System. The results of the valuation reflect the two one-time payments to certain retirees and beneficiaries effective July 2019 and January 2020. 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 2019 session of the General Assembly. assumed rate of return used in the current valuation remained at 7.30%. 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 financial reporting purposes meet the parameters set by Actuarial Standards of Practice (ASOPs). 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 reflected in the total unfunded accrued liability which is negative and being amortized as a level percent of payroll in accordance with the funding policy adopted by the Board. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 67 and 68. The necessary disclosure information is provided in separate supplemental reports. We have provided the following information and supporting schedules for the Actuarial Section of the Comprehensive Annual Financial Report: Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of investment expenses. Since the actual rate of return for the year ending in June 30, 2019 was less than 7.30%, the Summary of Actuarial Assumptions Schedule of Active Members Schedule of Funding Progress Schedule of Retirees Added to and Removed from Rolls Analysis of Change in Unfunded Accrued Liability Solvency Test Results (continued) 102 Actuarial Section 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 and the funding policy adopted by the Board. 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 103 Actuarial Section LRS April 16, 2020 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com Board of Trustees Legislative Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, 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, 2019. The report indicates that no annual employer contributions for the fiscal year ending June 30, 2022 are required to support the benefits of the System. The results of the valuation reflect that the Board did not grant the anticipated cost-of-living adjustments (COLAs) to retired members on July 1, 2019 and on January 1, 2020. In addition, the results of the valuation reflect the two onetime payments to certain retirees and beneficiaries effective July 2019 and January 2020. 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 2019 session of the General Assembly. investment expenses. Since the actual rate of return for the year ending June 30, 2019 was less than 7.30%, the assumed rate of return used in the current valuation remained at 7.30%. 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 financial reporting purposes meet the parameters set by Actuarial Standards of Practice (ASOPs). 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 total unfunded accrued liability which is negative and being amortized as a level dollar per active member in accordance with the funding policy adopted by the Board. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 67 and 68. The necessary disclosure information is provided in separate supplemental reports. We have provided the following information and supporting schedules for the Actuarial Section of the Comprehensive Annual Financial Report: Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of Summary of Actuarial Assumptions Schedule of Active Members Schedule of Funding Progress Schedule of Retirees Added to and Removed from Rolls Analysis of Change in Unfunded Accrued Liability Solvency Test Results (continued) 104 Actuarial Section 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 and the funding policy adopted by the Board. 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 105 Actuarial Section GMPF April 16, 2020 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com Board of Trustees Georgia Military Pension Fund Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, 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, 2019. The report indicates that annual employer contributions of $2,697,265 or $196.72 per active member for the fiscal year ending June 30, 2022 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 2019 session of the General Assembly. Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of investment expenses. Since the actual rate of return for the year ending June 30, 2019 was less than 7.30%, the assumed rate of return used in the current valuation remained at 7.30%. 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 financial reporting purposes meet the parameters set by Actuarial Standards of Practice (ASOPs). 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 total unfunded accrued liability which is being amortized as a level dollar per active member in accordance with the funding policy adopted by the Board. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 67 and 68. The necessary disclosure information is provided in separate supplemental reports. We have provided the following information and supporting schedules for the Actuarial Section of the Comprehensive Annual Financial Report: Summary of Actuarial Assumptions Schedule of Active Members Schedule of Funding Progress Schedule of Retirees Added to and Removed from Rolls Analysis of Change in Unfunded Accrued Liability Solvency Test Results 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 and the funding policy adopted by the Board . In our opinion the (continued) 106 Actuarial Section 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 107 Actuarial Section SEAD Post-Retirement (SEAD-OPEB) April 16, 2020 3550 Busbee Pkwy, Suite 250 Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.CavMacConsulting.com Board of Trustees Employees' Retirement System of Georgia Two Northside 75, Suite 300 Atlanta, GA 30318 Attn: Mr. James Potvin, 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). 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, 2019. The report indicates, for post-retirement benefits, there is no employer annual required contribution for the fiscal year ending June 30, 2022. Effective with the June 30, 2017 valuation, the assumed rate of return will be reduced by 0.10% (10 basis points) from the immediate prior actuarial valuation, as long as the actual rate of return for the fiscal year ending with the current valuation date exceeds the assumed rate of return from the immediate prior actuarial valuation. The assumed rate of return may not decrease below 7.00% net of investment expenses. Since the actual rate of return for the year ending June 30, 2019 was less than 7.30%, the assumed rate of return used in the current valuation remained at 7.30%. 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 actuarially determined contributions (ADC) are contributed when due. The Plan and the employers are required to comply with the financial reporting requirements of GASB Statements No. 74 and 75. The necessary disclosure information is provided in separate supplemental reports. 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. 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. The actuarial computations presented in this report are for purposes of determining the recommended funding amounts for the System. Use of these computations for purposes other than meeting these requirements may not be appropriate. (continued) 108 Actuarial Section Sincerely yours, Edward J. Koebel, EA, FCA, MAAA Chief Executive Officer Cathy Turcot Principal and Managing Director Ben Mobley, ASA, FCA, MAAA Senior Actuary 109 Actuarial Section Summary of Plan Provisions ERS Please see Notes to Financial Statements, (2)(a), pages 31-32. PSERS Please see Notes to Financial Statements, (2)(b), page 32-33. LRS Please see Notes to Financial Statements, (2)(c), page 33-34. GJRS Please see Notes to Financial Statements, (2)(d), pages 34-35. GMPF Please see Notes to Financial Statements, (2)(e), pages 35-36. SEAD-OPEB Please see Notes to Financial Statements, (2)(h), pages 36-37. The following Boards are responsible for establishing and maintaining the funding policies of the various defined benefit pension plans administered by the System: Board of Trustees of the Employees' Retirement System: ERS, LRS, and GMPF Board of Trustees of the Public School Employees Retirement System: PSERS Board of Trustees of the Georgia Judicial Retirement System: GJRS The following Board is responsible for establishing and maintaining the funding policy of the defined benefit postemployment life insurance plan administered by the System: Board of Directors of the State Employees' Assurance Department: SEAD-OPEB ERS, PSERS, LRS, GJRS, and GMPF are all subject to the provisions of GASB Statement No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25 (GASB 67). All of the plans covered under GASB 67 use the Entry Age Normal actuarial cost method for both funding and financial reporting purposes. This continues a longstanding practice for all of those plans and provides a point of consistency between the funding provisions and the GASB 67 requirements. SEAD-OPEB is subject to the provisions of GASB 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. SEAD-OPEB uses the Entry Age Normal actuarial cost method for both funding and financial reporting purposes. For all of the plans covered under GASB 67, the GASB 67 reports prepared as of June 30, 2020 were largely based on the data, assumptions, and results of the annual funding valuations as of June 30, 2019. The Total Pension Liability (TPL) for each plan, determined using the Entry Age Normal method, was then rolled forward to the June 30, 2020 measurement date. The Net Pension Liability for each plan is equal to the rolled forward TPL less the plan's net position as of June 30, 2020. For the plan covered under GASB 74, the GASB 74 report prepared as of June 30, 2020 was largely based on the data, assumptions, and results of the annual funding valuation as of June 30, 2019. The Total OPEB Liability (TOL) for the plan, determined using the Entry Age Normal method, was then rolled forward to the June 30, 2020 measurement date. The Net OPEB Liability for the plan is equal to the rolled forward TOL less the plan's net position as of June 30, 2020. For the pension plans' funding valuations as of June 30, 2019, the Actuarial Value of Assets is calculated using a fiveyear smoothing methodology, whereby excesses and shortfalls of actual investment income over or under the expected investment return will be recognized over the succeeding five-year periods. For the life insurance plan's funding valuation as of June 30, 2019, the Actuarial Value of Assets is equal to the Fair Value of Assets as of June 30, 2019. (continued) 110 Actuarial Section Summary of Plan Provisions For the funding valuations, each plan covered under GASB 67 utilizes a 7.30% assumed rate of return and a 7.30% discount rate for the calculation of the respective plans' liabilities. The Single Equivalent Interest Rate required under GASB 67 has been determined to be 7.30% by the plans' actuaries. The plan covered under GASB 74 utilizes a 7.30% assumed rate of return and a 7.30% discount rate for the calculation of the plan's liabilities. The Single Equivalent Interest Rate required under GASB 74 has been determined to be 7.30% by the plan's actuaries. 111 Actuarial Section Summary of Actuarial Assumptions The laws governing the Employees' Retirement System and the plans it administers require an actuary to perform an annual valuation of the soundness of the plans. 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 valuations were performed as of June 30, 2019 based on actuarial assumptions approved by the ERS Board, PSERS Board, GJRS Board, and SEAD Board during the last experience study on December 17, 2015. The more pertinent facts and significant assumptions underlying the computations included in the June 30, 2019 reports are as follows: Valuation Date Actuarial Cost Method Amortization Method ERS PSERS GJRS June 30, 2019 Entry age June 30, 2019 Entry age June 30, 2019 Entry age Level dollar, closed Level dollar, closed Level percent of pay, closed LRS June 30, 2019 Entry age Level dollar, open GMPF June 30, 2019 Entry age Level dollar, closed Amortization Period Actuarial Asset Valuation Method Investment Rate of Return Inflation Rate Projected Salary Increases COLA 15.3 years 19.6 years 14.3 years Infinite 14.6 years The actuarial value of assets was 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 five years. One-fifth of the excess or shortfall is recognized each year for five years. 7.30% 2.75% 3.25 to 7.00% None 7.30% 2.75% n/a 1.50% Semi-annually 7.30% 2.75% 4.50% None 7.30% 2.75% n/a 3.00% Annually 7.30% 2.75% n/a None Valuation Date Actuarial Cost Method Amortization Method Amortization Period Actuarial Asset Valuation Method Investment Rate of Return Inflation Rate Projected Salary Increases ERS GJRS LRS COLA SEAD-OPEB June 30, 2019 Entry age Level dollar, open Infinite Fair Value of Assets 7.30% 2.75% 3.25-7.00% 4.50% n/a None (continued) 112 Actuarial Section Summary of Actuarial Assumptions 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 Annual Rates of Death Disability Age Men Women Men Women 20 .0320 % .0177 % .05 % .02 % 25 .0349 .0192 .05 .02 30 .0412 .0245 .05 .02 35 .0717 .0441 .05 .02 40 .1001 .0655 .25 .10 45 .1399 .1043 .48 .25 50 .1983 .1555 .70 .45 55 .2810 .2228 1.05 .73 60 .4092 .3058 -- -- 65 .5600 .4304 -- -- Annual Rates of Withdrawal Years of Service 0-4 5-9 10 & over Age Men Women Men Women Men Women 20 35.00 % 30.00 % -- % -- % -- % -- % 25 27.50 25.00 15.00 17.50 -- -- 30 23.00 21.50 11.50 12.50 7.50 8.25 35 21.50 19.50 10.00 10.50 6.00 6.00 40 19.50 18.25 9.50 9.50 4.75 5.00 45 18.60 16.50 9.00 8.00 4.00 4.00 50 16.60 15.00 7.25 7.25 4.25 4.25 55 14.50 14.00 7.00 7.00 4.75 4.50 60 14.00 14.50 6.00 6.25 -- -- 65 15.00 17.00 10.00 11.00 -- -- (continued) 113 Actuarial Section Summary of Actuarial Assumptions Rates of Withdrawal Prior to Retirement (Withdrawal, Death, Disability) PSERS Annual Rates of Annual Death Rates of Disability Age Men Women Both 20 .0320 % .0177 % -- % 25 .0349 .0192 -- 30 .0412 .0245 -- 35 .0717 .0441 .0025 40 .1001 .0655 .0110 45 .1399 .1043 .0370 50 .1983 .1555 .0865 55 .2810 .2228 .2250 60 .4092 .3058 .3500 65 .5600 .4304 -- Annual Rates of Withdrawal Years of Service 0-4 5-9 10 & over Age Men Women Men Women Men Women 20 37.00 % 32.00 % -- % -- % -- % -- % 25 28.00 28.00 17.00 18.00 -- -- 30 25.00 23.00 15.00 15.00 12.00 10.00 35 23.00 19.00 13.00 13.00 9.00 10.00 40 21.00 17.00 12.00 12.00 7.50 8.00 45 19.00 15.50 11.00 10.00 6.50 7.00 50 17.00 14.00 9.00 8.50 6.50 6.00 55 15.00 12.00 9.00 8.00 6.00 5.50 60 12.00 11.00 7.50 7.50 -- -- (continued) 114 Actuarial Section Summary of Actuarial Assumptions Rates of Withdrawal Prior to Retirement (Withdrawal, Death, Disability) GJRS Annual Rates of Withdrawal Death Disability Age Both Men Women Both 20 4.0 % .032 % .018 % .03 % 25 4.0 .035 .019 .03 30 4.0 .041 .025 .05 35 4.0 .072 .044 .08 40 6.0 .100 .066 .10 45 4.0 .140 .104 .18 50 3.0 .198 .156 .25 55 2.5 .281 .223 .45 60 2.5 .409 .306 .73 65 2.5 .560 .430 1.18 LRS Annual Rates of Withdrawal Death Age Both Men Women 20 8.0 % .032 % .018 % 25 8.0 .035 .019 30 8.0 .041 .025 35 8.0 .072 .044 40 8.0 .100 .066 45 8.5 .140 .104 50 8.5 .198 .156 55 9.0 .281 .223 60 9.0 .409 .306 65 9.0 .560 .430 GMPF Rates of Withdrawal from Active Service Service 2 or Less 3-7 8-9 10-14 15-19 20 or more Rates 13.0 % 17.5 14.0 13.5 8.5 14.5 115 Age Rates of Death Men Women 25 .0349 % .0192 % 30 .0412 .0245 35 .0717 .0441 40 .1001 .0655 45 .1399 .1043 50 .1983 .1555 55 .2810 .2228 60 .4092 .3058 (continued) Actuarial Section Summary of Actuarial Assumptions Rates of Withdrawal Prior to Retirement (Withdrawal, Death, Disability) SEAD-OPEB All Groups ERS GJRS Annual Rates of Death Annual Rates of Disability Annual Rates of Disability Age Men Women Men Women Both 20 .0320 % .0177 % .05 % .02 % 25 .0349 .0192 .05 .02 30 .0412 .0245 .05 .02 35 .0717 .0441 .05 .02 40 .1001 .0655 .25 .10 45 .1399 .1043 .48 .25 50 .1983 .1555 .70 .45 55 .2810 .2228 1.05 .73 60 .4092 .3058 -- -- 65 .5600 .4304 -- -- .03 % .03 .05 .08 .10 .18 .25 .45 .73 1.18 ERS LRS GJRS Annual Rates of Withdrawal Years of Service Annual Rates Annual Rates of Withdrawal of Withdrawal 0-4 5-9 10 & over Age Men Women Men Women Men Women 20 35.00 % 30.00 % -- % -- % -- % -- % 25 27.50 25.00 15.00 17.50 -- -- 30 23.00 21.50 11.50 12.50 7.50 8.25 35 21.50 19.50 10.00 10.50 6.00 6.00 40 19.50 18.25 9.50 9.50 4.75 5.00 45 18.60 16.50 9.00 8.00 4.00 4.00 50 16.60 15.00 7.25 7.25 4.25 4.25 55 14.50 14.00 7.00 7.00 4.75 4.50 60 14.00 14.50 6.00 6.25 -- -- 65 15.00 17.00 10.00 11.00 -- -- Both 8.00 % 8.00 8.00 8.00 8.00 8.50 8.50 9.00 9.00 9.00 Both 4.00 % 4.00 4.00 4.00 6.00 4.00 3.00 2.50 2.50 2.50 (continued) 116 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Retirement ERS Old Plan Early Retirement Age 60 for 30 years 34 years More than 34 years Age Men Women Men Women Men Women Men Women 50 2.0 % 2.0 % 7.5 % 6.0 % 100.0 % 100.0 % 90.0 % 100.0 % 52 2.0 2.0 7.5 6.0 100.0 100.0 90.0 100.0 55 3.0 3.5 7.5 10.0 100.0 100.0 75.0 90.0 57 3.5 5.0 10.5 10.0 100.0 100.0 70.0 70.0 60 -- -- 15.0 20.0 97.5 95.0 40.0 55.0 62 -- -- 32.0 40.0 97.5 95.0 40.0 65.0 65 -- -- 35.0 40.0 35.0 40.0 35.0 40.0 67 -- -- 35.0 35.0 35.0 35.0 35.0 35.0 70 -- -- 35.0 35.0 35.0 35.0 35.0 35.0 75 -- -- 100.0 100.0 100.0 100.0 100.0 100.0 New Plan and GSEPS Early Retirement Normal Retirement Age Men Women Men* Women** 50 7.0 % 4.5 % 70.0 % 50.0 % 52 7.0 4.5 70.0 45.0 55 7.0 6.5 60.0 50.0 57 8.0 8.0 50.0 40.0 60 -- -- 25.0 30.0 62 -- -- 40.0 40.0 65 -- -- 32.0 35.0 67 -- -- 32.0 32.0 70 -- -- 30.0 30.0 75 -- -- 100.0 100.0 *An additional 10% of active male New Plan and GSEPS members less than age 55 and 20% between ages 55-59, inclusive, are expected to retire in the year in which they attain 30 years of service. **An additional 20% of active female New Plan and GSEPS members less than age 60 are expected to retire in the year in which they attain 30 years of service. (continued) 117 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Retirement PSERS Age Annual Rate of Retirement Age Annual Rate of Retirement 60 13.0 % 68 23.0 % 61 13.0 69 26.0 62 22.0 70 27.0 63 17.5 71 27.0 64 17.0 72 27.0 65 28.0 73 27.0 66 27.0 74 27.0 67 23.0 75 & over 100.0 GJRS LRS Age 60 61 62 63-64 65-69 70-74 75 Annual Rate of Retirement 15.0 % 10.0 12.0 10.0 15.0 25.0 100.0 Age Annual Rate of Retirement 60 10.0 % 61 10.0 62 15.0 63 10.0 64 10.0 65 12.0 Age 66 67 68 69 70-74 75 Annual Rate of Retirement 12.0 % 15.0 12.0 12.0 20.0 100.0 (continued) 118 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Retirement GMPF Age 60 61 62 63 64 65 & over Annual Rate of Retirement 75.0 % 60.0 70.0 60.0 60.0 100.0 (continued) 119 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Retirement SEAD-OPEB ERS Members Age 50 52 55 57 60 62 65 67 70 75 Old Plan Early Retirement Age 60 or 30 years Men 2.0 % 2.0 3.0 3.5 -- -- -- -- -- -- Women 2.0 % 2.0 3.5 5.0 -- -- -- -- -- -- Men 7.5 % 7.5 7.5 10.5 15.0 32.0 35.0 35.0 35.0 100.0 Women 6.0 % 6.0 10.0 10.0 20.0 40.0 40.0 35.0 35.0 100.0 34 years More than 34 years Men 100.0 % 100.0 100.0 100.0 97.5 97.5 35.0 35.0 35.0 100.0 Women 100.0 % 100.0 100.0 100.0 95.0 95.0 40.0 35.0 35.0 100.0 Men 90.0 % 90.0 75.0 70.0 40.0 40.0 35.0 35.0 35.0 100.0 Women 100.0 % 100.0 90.0 70.0 55.0 65.0 40.0 35.0 35.0 100.0 New Plan and GSEPS Early Retirement Normal Retirement Age Men Women Men* Women** 50 7.0 % 4.5 % 70.0 % 50.0 % 52 7.0 4.5 70.0 45.0 55 7.0 6.5 60.0 50.0 57 8.0 8.0 50.0 40.0 60 -- -- 25.0 30.0 62 -- -- 40.0 40.0 65 -- -- 32.0 35.0 67 -- -- 32.0 32.0 70 -- -- 30.0 30.0 75 -- -- 100.0 100.0 *An additional 10% of active male New Plan and GSEPS members less than age 55 and 20% between ages 55-59, inclusive, are expected to retire in the year in which they attain 30 years of service. **An additional 20% of active female New Plan and GSEPS members less than age 60 are expected to retire in the year in which they attain 30 years of service. LRS Members Age 60 61 62 63-64 65-66 Annual Rate of Retirement 10.0 % 10.0 15.0 10.0 12.0 Age 67 68-69 70-74 75 Annual Rate of Retirement 15.0 % 12.0 20.0 100.0 (continued) 120 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Retirement SEAD-OPEB GJRS Members Age 60 61 62 63-64 65-66 67 68-69 70-74 75 Annual Rate of Retirement 15.0 % 10.0 12.0 10.0 15.0 15.0 15.0 25.0 100.0 (continued) 121 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Death After Retirement For all plans except PSERS, the RP-2000 Combined Mortality Table (projected to 2025 with projection scale BB and set forward two years for both males and females) is used for the period after retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table (projected to 2025 with projection scale BB and and set back seven years for males and set forward three years for females) is used for the period after disability retirement. For PSERS, the RP-2000 Blue-Collar Mortality Table (projected to 2025 with projection scale BB and set forward three years for males and two years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table (projected to 2025 with projection scale BB and set forward five years for both males and females) is used for the period after disability retirement. For all plans, there is a margin for future mortality improvement in the tables. ERS Age Men Women Age Men Women 40 0.1127% 0.0790% 65 1.1300% 0.8994% 45 0.1609 0.1230 70 1.8697 1.5281 50 0.2474 0.1872 75 3.2147 2.5220 55 0.4246 0.2918 80 5.5160 4.1628 60 0.6985 0.4923 85 9.5631 7.1239 PSERS Age Men Women Age Men Women 40 0.1476% 0.0995% 65 1.4859 % 0.9774% 45 0.1974 0.1484 70 2.4262 1.7054 50 0.3057 0.2084 75 3.9830 2.7288 55 0.5644 0.2844 80 6.5238 4.4542 60 0.9575 0.5014 85 10.9551 7.5727 GJRS Age Men Women Age Men Women 40 0.1130% 0.0790% 65 1.1300% 0.8994% 45 0.1610 0.1230 70 1.8697 1.5281 50 0.2470 0.1872 75 3.2147 2.5220 55 0.4250 0.2918 80 5.5160 4.1628 60 0.6985 0.4923 85 9.5631 7.1239 (continued) 122 Actuarial Section Summary of Actuarial Assumptions Annual Rates of Death After Retirement LRS Age Men Women Age 40 0.1127% 0.0790% 65 45 0.1609 0.1230 70 50 0.2474 0.1872 75 55 0.4246 0.2918 80 60 0.6985 0.4923 85 GMPF SEAD-OPEB Age Men Women Age 40 0.1127% 0.0790% 65 45 0.1609 0.1230 70 50 0.2474 0.1872 75 55 0.4246 0.2918 80 60 0.6985 0.4923 85 Age Men Women Age 40 0.1127% 0.0790% 65 45 0.1609 0.1230 70 50 0.2474 0.1872 75 55 0.4246 0.2918 80 60 0.6985 0.4923 85 Men 1.1300% 1.8697 3.2147 5.5160 9.5631 Women 0.8994% 1.5281 2.5220 4.1628 7.1239 Men 1.1300% 1.8697 3.2147 5.5160 9.5631 Women 0.8994% 1.5281 2.5220 4.1628 7.1239 Men 1.1300% 1.8697 3.2147 5.5160 9.5631 Women 0.8994% 1.5281 2.5220 4.1628 7.1239 123 Actuarial Section Active Members ERS Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 68,566 66,081 63,942 61,550 60,486 60,416 59,766 60,906 60,405 59,207 Annual Payroll (in thousands) $ 2,571,042 2,486,780 2,414,884 2,335,773 2,315,625 2,352,920 2,384,358 2,546,492 2,634,129 2,611,965 Average Pay $ 37,497 37,632 37,767 37,949 38,284 38,945 39,895 41,810 43,608 44,116 Change (0.1)% 0.4 0.4 0.5 0.9 1.7 2.4 4.8 4.3 1.2 PSERS PSERS is not a compensation based plan. Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 39,962 39,249 38,654 37,361 36,096 35,477 34,866 35,509 34,953 34,767 GJRS Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 495 507 503 506 513 516 526 527 527 521 Annual Payroll (in thousands) $ 51,293 52,331 51,898 52,807 53,628 54,272 57,401 59,695 60,572 60,532 Average Pay $ 103,622 103,216 103,177 104,362 104,539 105,178 109,128 113,273 114,937 116,184 Change (0.1)% (0.4) 0.0 1.1 0.2 0.6 3.8 3.8 1.5 1.1 (continued) 124 Actuarial Section Active Members LRS LRS is not a compensation based plan. Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 216 218 220 223 222 218 224 222 222 221 GMPF GMPF is not a compensation based plan. Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 13,032 13,776 13,526 13,573 13,469 13,754 13,850 13,037 13,804 13,711 SEAD-OPEB Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Active Members 62,305 55,516 49,261 43,512 39,101 35,189 32,076 29,024 26,224 23,499 Note: Payroll data on page 124 for fiscal year 2019 will not equal that which is presented in the Financial section in the Schedules of Employers' and Nonemployer Contributions on pages 70-71. Valuation data at that time was a snapshot of the valuation date, annualized for new hires, but does not include those who terminated during the year. 125 Actuarial Section Member and Employer Contribution Rates ERS Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Employer Rates Member Old Plan* New Plan 1.25 % 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 10.41 % 11.63 14.90 18.46 21.96 24.72 24.69 24.69 24.66 24.66 10.41 % 11.63 14.90 18.46 21.96 24.72 24.69 24.69 24.66 24.66 GSEPS 6.54 % 7.42 11.54 15.18 18.87 21.69 21.69 21.66 21.66 21.64 * Old Plan rate includes an employer pick-up of employee contributions. PSERS Pre 7/1/12 Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Member $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year $ 36 per year Post 7/1/12 Member Employer n/a n/a n/a n/a n/a $ 90 per year $ 90 per year $ 90 per year $ 90 per year $ 90 per year $ 7,509,000 15,884,000 24,829,000 27,160,000 28,461,000 28,580,000 26,277,000 29,276,000 30,263,000 32,496,000 GJRS Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Member 7.50 % 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 Employer 3.85 % 3.90 3.90 4.23 6.98 12.19 10.48 7.17 7.83 9.13 126 (continued) Actuarial Section Member and Employer Contribution Rates LRS Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Member 8.50 % 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.50 Employer $ 75,000 75,000 128,000 45,000 -- -- -- -- -- -- GMPF Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Member n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Employer $ 1,282,000 1,521,000 1,703,000 1,892,000 1,893,369 1,989,530 2,017,875 2,377,312 2,537,272 2,611,590 SEAD-OPEB Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Member - Old Plan Member - New Plan, LRS, GJRS 0.45% 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.23 % 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 Employer -- % 0.61 0.27 -- -- -- -- -- -- -- 127 Actuarial Section Schedules of Funding Progress - Defined Benefit Plans (in thousands) Employees' Retirement System Public School Employees Retirement System1 Legislative Retirement System Georgia Judicial Retirement System Actuarial Valuation Date 6/30/2010 $ 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Actuarial Value of Plan Assets (a) 13,046,193 12,667,577 12,260,595 12,129,804 12,376,120 12,675,649 12,854,518 13,088,185 13,412,046 13,481,219 737,406 719,601 710,915 727,268 765,450 805,277 834,554 865,786 905,046 931,032 29,581 29,278 28,990 29,481 30,538 31,635 32,171 32,913 33,871 34,153 320,050 327,483 335,225 351,889 373,560 396,399 418,412 439,828 461,787 474,003 Actuarial Accrued Liability (AAL) Entry-Age (b) $ 16,295,352 16,656,905 16,777,922 16,982,449 16,991,963 17,099,527 17,199,688 17,514,898 17,812,441 17,829,220 875,396 885,927 895,324 910,256 924,365 967,409 988,883 1,035,935 1,081,184 1,108,658 25,003 25,245 24,966 24,904 24,913 25,690 25,533 25,674 25,905 25,714 281,496 290,486 308,862 335,792 343,428 350,298 376,740 407,607 424,724 440,664 Unfunded AAL/ (Funded Excess) (b-a) $ 3,249,159 3,989,348 4,517,327 4,852,645 4,615,843 4,423,878 4,345,170 4,426,713 4,400,395 4,348,001 137,990 166,326 184,409 182,988 158,915 162,132 154,329 170,149 176,138 177,626 (4,578) (4,033) (4,024) (4,577) (5,624) (5,945) (6,638) (7,239) (7,966) (8,439) (38,554) (36,997) (26,363) (16,097) (30,132) (46,101) (41,672) (32,221) (37,063) (33,339) Funded Ratio (a/b) 80.1 % $ 76.0 73.1 71.4 72.8 74.1 74.7 74.7 75.3 75.6 84.2 81.2 79.4 79.9 82.8 83.2 84.4 83.6 83.7 84.0 118.3 116.0 116.1 118.4 122.6 123.1 126.0 128.2 130.7 132.8 113.7 112.7 108.5 104.8 108.8 113.2 111.1 107.9 108.7 107.6 Annual Covered Payroll (c) 2,571,042 2,486,780 2,414,884 2,335,773 2,315,625 2,352,920 2,384,358 2,546,492 2,634,129 2,611,965 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 3,745 3,780 3,815 3,867 3,850 3,764 3,875 3,830 3,844 3,833 51,293 52,331 51,898 52,807 53,628 54,272 57,401 59,695 60,572 60,532 128 Unfunded AAL/ (Funded Excess) as Percentage of Covered Payroll [(b-a)/c] 126.4 % 160.4 187.1 207.8 199.3 188.0 182.2 173.8 167.1 166.5 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a (122.2) (106.7) (105.5) (118.4) (146.1) (157.9) (171.3) (189.0) (207.2) (220.2) (75.2) (70.7) (50.8) (30.5) (56.2) (84.9) (72.6) (54.0) (61.2) (55.1) (continued) Actuarial Section Schedules of Funding Progress - Defined Benefit Plans (in thousands) Georgia Military Pension Fund2 Actuarial Valuation Date 6/30/2010 $ 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Actuarial Value of Plan Assets (a) 7,558 8,702 10,087 12,131 14,264 16,446 18,414 20,604 23,362 26,119 Actuarial Accrued Liability (AAL) Entry-Age (b) $ 23,773 26,767 28,231 30,056 31,815 35,213 38,211 40,731 43,622 45,790 Unfunded AAL/ (Funded Excess) (b-a) $ 16,215 18,065 18,144 17,925 17,551 18,767 19,797 20,127 20,260 19,671 Funded Ratio (a/b) 31.8 % 32.5 35.7 40.4 44.8 46.7 48.2 50.6 53.6 57.0 Annual Covered Payroll (c) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Unfunded AAL/ (Funded Excess) as Percentage of Covered Payroll [(b-a)/c] 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 on members' salaries, but are simply $4.00 per month, per member for nine months each fiscal year if hired prior to July 1, 2012 and $10 per month, per member for nine months if hired after July 1, 2012. No statistics regarding covered payroll are available. Active and inactive plan member information is maintained by the Georgia Department of Defense. Note: Payroll data on page 128 for fiscal year 2019 will not equal that which is presented in the Financial section in the Schedules of Employers' and Nonemployer Contributions on pages 70-71. Valuation data at that time was a snapshot of the valuation date, annualized for new hires, but does not include those who terminated during the year. 129 Actuarial Section Schedule of Retirees Added to and Removed from Rolls ERS Year Ended 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Added to Rolls Removed from Rolls Roll End of Year Number 2,665 2,797 2,956 3,664 2,440 2,656 2,572 2,630 2,612 2,777 Annual Allowances (in thousands) $ 70,383 69,031 71,464 88,855 51,178 54,003 51,031 45,833 50,005 58,673 Number 1,051 1,170 1,305 1,176 1,059 1,350 1,342 1,420 1,422 1,357 Annual Allowances (in thousands) $ 22,413 25,347 27,696 26,334 22,997 30,927 30,724 32,372 33,530 32,574 Number 38,582 40,209 41,860 44,348 45,729 47,035 48,265 49,475 50,665 52,085 Annual Allowances (in thousands) $ 1,110,728 1,154,412 1,198,180 1,260,701 1,288,882 1,311,958 1,332,265 1,345,726 1,362,201 1,388,300 % Increase in Annual Allowance 4.5 % 3.9 3.8 5.2 2.2 1.8 1.5 1.0 1.2 1.9 Average Annual Allowances $ 28,789 28,710 28,624 28,427 28,185 27,893 27,603 27,200 26,886 26,655 PSERS Year Ended 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Added to Rolls Removed from Rolls Roll End of Year Number 1,001 1,174 1,133 1,298 1,345 1,247 1,363 1,253 1,258 1,301 Annual Allowances (in thousands) $ 4,494 3,168 3,192 3,803 3,749 3,482 3,927 4,322 5,436 5,319 Number 642 731 684 650 647 690 763 756 885 795 Annual Allowances (in thousands) $ 2,666 3,072 2,834 2,738 2,604 2,679 2,890 2,927 3,354 3,101 Number 14,157 14,600 15,049 15,697 16,395 16,952 17,552 18,049 18,422 18,928 Annual Allowances (in thousands) $ 53,663 53,759 54,117 55,182 56,327 57,130 58,167 59,562 61,644 63,862 % Increase in Annual Allowance 3.5 % 0.2 0.7 2.0 2.1 1.4 1.8 2.4 3.5 3.6 Average Annual Allowances $ 3,791 3,682 3,596 3,515 3,436 3,370 3,314 3,300 3,346 3,374 GJRS Added to Rolls Removed from Rolls Roll End of Year Year Ended 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Number 16 15 22 42 23 21 13 62 23 52 Annual Allowances (in thousands) $ 933 1,168 1,732 2,763 1,175 1,416 919 5,304 1,950 3,435 Number 10 2 8 13 9 11 5 10 12 12 Annual Allowances (in thousands) $ 508 105 405 629 326 561 269 771 558 562 Number 207 220 234 263 277 287 295 347 358 398 Annual Allowances (in thousands) $ 12,437 13,500 14,827 16,961 17,810 18,665 19,315 23,848 25,240 28,113 % Increase in Annual Allowance 3.5 % 8.5 9.8 14.4 5.0 4.8 3.5 23.5 5.8 11.4 Average Annual Allowances $ 60,082 61,364 63,363 64,490 64,296 65,035 65,475 68,726 70,503 70,636 (continued) 130 Actuarial Section Schedule of Retirees Added to and Removed from Rolls LRS Added to Rolls Removed from Rolls Roll End of Year Year Ended 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Number 10 18 10 32 6 13 9 13 11 14 Annual Allowances (in thousands) $ 106 104 66 200 30 87 58 80 57 82 Number 3 10 11 15 7 12 13 6 7 12 Annual Allowances (in thousands) $ 36 86 82 140 61 112 111 74 56 96 Number 236 244 243 260 259 260 256 263 267 269 Annual Allowances (in thousands) $ 1,772 1,790 1,774 1,834 1,803 1,778 1,725 1,731 1,732 1,718 % Increase in Annual Allowance 4.1 % 1.0 (0.9) 3.4 (1.7) (1.4) (3.0) 0.3 0.4 (0.8) Average Annual Allowances $ 7,508 7,336 7,300 7,054 6,961 6,838 6,738 6,582 6,489 6,386 GMPF Added to Rolls Removed from Rolls Roll End of Year Year Ended 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Number 92 94 95 83 62 54 79 83 97 91 Annual Allowances (in thousands) $ 100 101 106 87 68 55 82 90 106 94 Number 1 3 3 5 5 6 9 11 7 18 Annual Allowances (in thousands) $ 1 4 3 5 6 5 9 11 8 20 Number 477 568 660 738 795 843 913 985 1,075 1,148 Annual Allowances (in thousands) $ 520 617 720 802 864 914 987 1,066 1,164 1,238 % Increase in Annual Allowance 23.5 % 18.7 16.7 11.4 7.7 5.8 8.0 8.0 9.2 6.4 Average Annual Allowances $ 1,090 1,086 1,091 1,087 1,087 1,084 1,081 1,082 1,083 1,078 SEAD-OPEB is a post-employment life insurance plan which does not have annuity payments. 131 Actuarial Section Analysis of Change in Unfunded Accrued Liability (UAL) ERS Interest (7.30) 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 Programming modification Data changes Misc. changes Total 2019 2018 2017 2016 2015 2014 2013 Amount of Increase (Decrease) (in millions) 2012 2011 2010 $ 321.2 $ 327.6 $ 325.9 $ 331.8 $ 346.2 $ 363.9 $ 338.8 $ 299.2 $ 243.7 $ (567.4) (574.4) (551.0) (514.7) (419.4) (321.7) (239.1) (147.7) (122.9) 169.8 (89.4) 108.6 (1.2) 40.7 9.6 (43.5) -- 61.2 -- -- 18.4 -- (130.4) 2.6 58.7 12.4 53.5 -- 39.2 161.1 -- 15.3 8.1 (48.6) 9.0 39.9 7.8 127.5 -- 28.9 158.3 -- (16.2) -- $ (52.4) $ (26.3) $ 81.5 $ 8.5 12.8 43.6 7.8 (0.6) -- 28.4 -- -- 3.6 0.1 (78.7) $ (198.9) 13.9 50.8 10.3 (89.6) -- -- 80.4 -- 14.4 (0.1) (192.0) $ (228.9) 60.4 45.5 9.3 (159.4) -- -- -- -- (6.0) 0.1 (236.8) $ 253.7 20.6 103.7 14.1 (46.8) (128.3) -- -- -- 18.7 (0.1) 335.3 $ 396.3 15.5 93.8 12.1 (74.2) -- (118.8) -- 26.3 12.9 12.6 528.0 $ 433.6 16.4 91.4 28.4 49.0 -- -- -- (28.7) 9.1 20.2 740.2 $ 710.1 49.2 118.4 15.0 (259.2) -- -- 250.7 -- (2.4) 22.5 984.7 PSERS Interest (7.30) added to previous UAL Accrued liability contribution Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Method changes Amendments COLAs Assumption changes Data Changes Allotment for Expenses Misc. changes Total Amount of Increase (Decrease) (in thousands) $ 12,858.1 $ 12,591.0 $ 11,574.7 $ 12,159.9 $ 11,918.7 $ 13,724.1 $ 13,830.7 $ (18,303.2) (17,584.7) (15,278.9) (17,394.7) (17,704.8) (15,915.4) (12,497.7) 12,474.4 $ (4,843.8) 10,349.3 $ 4,022.8 4,021.0 6,403.4 5,770.0 (1,104.1) (859.2) 3,701.8 -- 12,551.0 (8,832.0) -- 110.9 -- (4,405.3) (8,805.0) (2,859.3) (1,024.6) 3,206.8 -- 16,292.1 (6,469.5) 10,995.2 -- -- (352.4) (3,247.0) (308.6) (879.7) 4,334.7 -- 15,892.7 (6,786.4) 10,547.5 -- -- (29.5) $ 1,488.0 $ 5,989.6 $ 15,819.5 $ 841.0 (643.8) (228.2) 2,798.1 -- -- (5,492.0) -- -- -- 157.2 (12,207.0) 414.9 2,618.5 2,875.9 -- -- (14,772.9) 30,030.0 -- -- 43.0 (14,071.0) 1,286.7 2,580.8 2,786.0 -- -- (14,398.9) -- -- -- (64.9) 13,868.0 (381.9) 4,772.4 2,757.7 (9,259.0) -- (14,813.1) -- -- -- 301.7 21,922.0 (1,149.5) 4,974.5 2,783.8 -- -- (20,664.9) -- -- -- 2,586.9 24,002.0 (3,000.5) 3,403.6 3,167.0 -- -- (16,603.6) -- -- 2,122.7 872.4 39,729.0 (828.9) 12,375.8 3,047.8 -- -- (14,121.2) 33,717.7 (2,192.3) 2,029.0 195.0 (7,802.5) $ 3,216.3 $ (24,072.6) $ (1,421.2) $ 18,083.4 $ 28,335.7 $ 84,376.3 (continued) 132 Actuarial Section Analysis of Change in Unfunded Accrued Liability (UAL) GJRS Interest (7.30) 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 Data changes Programming modification Misc. changes Total 2019 2018 2017 2016 2015 2014 2013 Amount of Increase (Decrease) (in thousands) 2012 2011 2010 $ (2,705.6) $ (2,416.5) $ (3,125.4) $ (3,457.6) $ (2,259.9) $ (1,207.3) $ (1,977.2) $ (2,774.8) $ (2,891.5) $ (2,636.2) 3,085.8 2,005.4 1,245.0 (746.2) 3,754.1 5,803.3 5,187.8 4,710.8 4,079.8 4,592.1 2,721.4 1,456.8 1,100.3 1,774.9 (5,839.7) -- 645.9 -- 1,484.4 -- -- (4,346.6) 543.1 (162.6) 338.7 (5,756.8) -- 993.1 3,696.0 -- -- 263.6 (1,538.9) (339.7) 2,307.0 2,353.1 187.7 -- 3,345.4 3,615.6 -- -- 1,402.0 $ 3,724.2 $ (4,842.6) $ 9,451.8 $ 562.3 1,530.2 872.4 1,190.9 209.7 -- 3,179.6 -- -- -- 1,086.9 (5,855.8) 639.6 (370.0) 1,539.1 (8,848.5) -- -- (5,030.9) -- -- 464.1 (6,807.0) 2,138.5 (5,962.8) 1,272.3 (10,382.5) -- -- -- -- -- 1,110.1 4,949.6 533.8 3,941.4 3,138.0 (4,620.6) (6,827.0) -- -- -- 4,606.4 1,333.8 8,638.5 376.9 2,080.7 442.3 (4,536.5) -- (870.0) -- -- 1,648.9 917.5 9,404.0 2,076.8 (276.3) 750.1 1,265.9 -- -- -- -- -- (12,852.1) 16,228.0 560.9 2,290.6 -- (10,213.5) -- -- (14,826.5) 579.1 -- 21.3 4,428.2 $ (15,968.2) $ (14,035.4) $ 10,266.0 $ 10,634.3 $ 1,556.7 $ (3,404.2) LRS Interest (7.30) added to previous UAL Accrued liability contribution Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Method changes Amendments No COLAs Assumption changes Data changes Misc. changes Total Amount of Increase (Decrease) (in thousands) $ (581.5) $ (535.7) $ (497.8) $ (445.9) $ (421.9) $ (343.3) $ (301.8) $ (302.5) $ (343.4) $ (508.5) 315.2 322.9 250.3 338.3 173.4 161.9 (62.4) 33.9 107.1 (32.5) 245.1 29.6 (180.7) 57.2 -- 101.9 (457.4) -- (3.6) 0.9 (342.2) 118.3 (175.2) 16.7 -- 67.6 (462.8) 229.1 -- 34.8 (129.2) 245.9 (257.7) 99.2 -- 50.4 (458.3) 223.7 -- (127.9) 24.1 (66.1) (198.9) 26.8 -- 51.5 (418.2) -- -- (4.7) (491.6) (50.8) (10.1) 35.1 -- -- (452.6) 852.3 -- 46.2 (576.5) 323.8 (347.5) 135.2 -- -- (470.8) -- -- 69.9 513.9 (29.6) 17.4 144.5 (418.0) (488.1) -- -- -- 71.1 829.0 19.1 (84.3) 16.9 -- (549.7) -- -- -- 46.4 906.2 (18.7) 254.5 74.0 -- (481.8) -- -- -- 46.9 1,534.0 339.2 105.1 98.8 -- (465.3) -- 975.2 114.8 41.6 $ (473.3) $ (726.5) $ (601.5) $ (693.1) $ (320.0) $ (1,047.3) $ (553.1) $ 8.8 $ 544.9 $ 2,202.4 (continued) 133 Actuarial Section Analysis of Change in Unfunded Accrued Liability (UAL) GMPF* Interest (7.30) added to previous UAL Accrued liability contribution Experience: Valuation asset growth Pensioners' mortality Turnover and retirements New entrants Method changes Assumption changes Expense deficit Misc. changes 2019 2018 2017 2016 2015 2014 Amount of Increase (Decrease) (in thousands) 2013 2012 2011 $ 1,479.0 $ 1,489.4 $ 1,484.8 $ 1,407.5 $ 1,316.3 $ 1,344.3 $ 1,360.8 $ 1,354.9 $ 1,216.1 (2,285.4) (2,140.6) (1,747.5) (1,698.6) (1,765.6) (1,775.3) (1,661.5) (1,502.4) (1,173.3) 68.0 (20.1) (17.0) 179.1 -- -- -- (3.0) (181.0) 40.7 143.1 208.9 -- 570.2 -- 2.6 (50.0) (109.2) 11.0 138.9 -- 537.6 -- 64.2 59.0 119.3 233.3 165.1 -- -- -- 744.4 (203.0) 126.1 120.5 236.9 -- 985.8 -- 398.7 (247.0) 88.8 (87.9) 142.6 -- -- -- 161.1 39.3 80.2 186.4 137.8 (393.0) -- -- 30.6 107.0 68.3 17.9 127.1 -- -- -- (93.6) 113.8 58.5 205.4 1,469.6 -- -- 37.0 (77.0) Total $ (589.0) $ 133.3 $ 329.8 $ 1,030.0 $ 1,215.7 $ (373.4) $ (219.4) $ 79.2 $ 1,850.1 *Note: Data prior to 2011 is not available for GMPF. SEAD-OPEB: Data is not available. 134 Actuarial Section Solvency Test Results (in thousands) ERS Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Active Member Retirants & (Employer Beneficiaries Funded Portion) Valuation Assets (1) (2) (3) $ 551,607 $ 10,652,040 $ 5,091,705 $ 13,046,193 503,867 11,058,344 5,094,694 12,667,557 460,861 11,420,011 4,897,050 12,260,595 405,841 11,935,364 4,641,244 12,129,803 385,058 12,108,737 4,498,168 12,376,120 367,462 12,520,321 4,211,744 12,675,649 368,281 12,592,980 4,238,427 12,854,518 368,935 12,729,977 4,415,986 13,088,185 372,375 12,927,796 4,512,270 13,412,046 371,147 13,077,253 4,380,820 13,481,219 PSERS Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Retirants & Beneficiaries (1) (2) $ 16,361 $ 528,808 16,627 532,509 16,917 537,284 17,016 549,796 16,995 566,344 17,196 585,471 17,413 609,807 18,077 640,197 18,570 674,222 19,109 695,624 Active Member (Employer Funded Portion) Valuation Assets (3) $ 330,227 $ 737,406 336,790 719,601 341,123 710,915 343,444 727,268 341,026 765,450 364,742 805,277 361,663 834,554 377,661 865,786 388,392 905,046 393,925 931,032 GJRS Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Retirants & Beneficiaries (1) (2) $ 67,293 $ 117,730 71,047 128,991 73,998 141,880 73,949 162,364 80,007 162,527 84,170 174,147 91,991 180,107 84,841 220,738 88,890 231,811 85,722 256,060 Active Member (Employer Funded Portion) Valuation Assets (3) $ 96,473 $ 320,050 90,440 327,483 92,984 335,225 99,479 351,889 100,894 373,560 91,981 396,399 104,642 418,412 102,028 439,828 104,023 461,787 98,882 474,003 135 Portion of Aggregate Accrued Liabilities Covered by Assets (1) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (2) 100.0 % 100.0 100.0 98.2 99.0 98.3 99.2 99.9 100.0 100.0 (3) 36.2 % 21.7 7.8 -- -- -- -- -- 2.5 0.7 Portion of Aggregate Accrued Liabilities Covered by Assets (1) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (2) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (3) 58.2 % 50.6 45.9 46.7 53.4 55.5 57.3 54.9 54.6 54.9 Portion of Aggregate Accrued Liabilities Covered by Assets (1) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (2) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (3) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (continued) Actuarial Section Solvency Test Results (in thousands) LRS Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Active Member Retirants & (Employer Beneficiaries Funded Portion) Valuation Assets (1) $ 3,166 $ 2,921 3,185 2,951 3,430 3,287 3,630 3,543 3,862 3,664 (2) (3) 19,208 $ 2,629 $ 19,759 2,564 19,200 2,581 19,623 2,330 19,006 2,477 19,873 2,530 19,202 2,701 19,382 2,749 19,048 2,995 19,204 2,846 29,581 29,278 28,990 29,481 30,538 31,635 32,171 32,913 33,871 34,153 GMPF Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Retirants & Beneficiaries (1) $ -- -- -- -- -- -- -- -- -- -- (2) $ 14,015 15,379 17,518 19,396 21,389 24,075 26,337 28,867 30,964 33,435 Active Member (Employer Funded Portion) Valuation Assets (3) $ 9,758 $ 11,388 10,713 10,660 10,426 11,138 11,874 11,864 12,658 12,355 7,558 8,702 10,087 12,131 14,264 16,446 18,414 20,604 23,362 26,119 SEAD-OPEB Actuarial Valuation as of 6/30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Actuarial Accrued Liability for: Active Member Contributions Retirants & Beneficiaries (1) $ -- -- -- -- -- -- -- -- -- -- (2) $ 516,633 503,327 528,165 586,228 621,502 621,426 652,291 693,118 735,214 772,657 Active Member (Employer Funded Portion) Valuation Assets (3) $ 174,368 175,093 176,452 168,558 166,518 148,321 180,078 183,468 183,943 174,082 $ 680,449 807,893 818,284 907,831 1,037,901 1,046,559 1,028,541 1,121,251 1,189,462 1,233,856 Portion of Aggregate Accrued Liabilities Covered by Assets (1) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (2) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 (3) 100.0 % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Portion of Aggregate Accrued Liabilities Covered by Assets (1) (2) (3) n/a 53.9 % -- % n/a 56.6 -- n/a 57.6 -- n/a 62.5 -- n/a 66.7 -- n/a 68.3 -- n/a 69.9 -- n/a 71.4 -- n/a 75.4 -- n/a 78.1 -- Portion of Aggregate Accrued Liabilities Covered by Assets (1) (2) (3) n/a 100.0 % 93.9 % n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 n/a 100.0 100.0 136 Statistical Section Celebrating Together ERSGA 70th Anniversary Party See the Appendix for kind words from our members and retirees. 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 non-accounting data is taken from the System's internal sources except for information which is derived from the actuarial valuations. Due to the adoption of GASB 74 in FY2017, historical detail may not be complete for the Schedule of Revenue and Expense and will be added each year. Statistical information is not presented for SCJRF and DARF as both plans are immaterial, have no active members, and are closed to new members. Fiduciary Funds 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 Changes in Fiduciary Net Position 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 Principal Participating Employers Statistical Data as of June 30, 2020 Proprietary Fund Schedule of Revenue and Expenses 10-year Schedule of Membership 138 Statistical Section Additions by Source - Contribution/Investment Income (in thousands) ERS Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ 39,480 $ 36,561 $ 38,955 $ 32,423 $ 33,713 $ 31,961 $ 35,863 $ 37,130 $ 36,252 $ 35,837 261,132 274,034 358,992 418,807 505,668 583,082 613,201 639,302 638,989 634,108 -- -- -- 10,945 12,495 12,484 12,080 12,865 10,220 9,749 2,269,270 231,782 1,495,849 2,021,748 474,147 141,292 1,475,626 1,166,013 873,404 703,840 -- -- -- -- 10 10 10 10 10 10 Total Additions to (Deductions from) Fiduciary Net Position PSERS Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $2,569,882 $ 542,377 $1,893,796 $2,483,923 $1,026,033 $ 768,829 $2,136,780 $1,855,320 $1,558,875 $1,383,544 $ 1,451 $ 7,509 -- 128,096 -- 1,426 $ 15,884 -- 13,554 -- 1,538 $ 1,659 $ 24,829 -- -- 27,160 88,067 123,799 -- -- 1,800 $ -- 28,461 30,129 -- 1,925 $ -- 28,580 9,809 -- 2,084 $ -- 26,277 97,715 -- 2,162 $ -- 29,276 78,418 -- 2,256 $ -- 30,263 60,553 -- 2,338 -- 32,496 49,913 -- Total Additions to (Deductions from) Fiduciary Net Position GJRS Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $ 137,056 $ 30,864 $ 114,434 $ 152,618 $ 60,390 $ 40,314 $ 126,076 $ 109,856 $ 93,072 $ 84,747 $ 4,721 $ 1,163 -- 57,330 -- 4,904 $ 2,083 -- 6,571 -- 4,408 $ 2,279 -- 42,104 -- 4,731 $ 1,373 1,002 60,012 -- 5,061 $ 2,696 1,564 14,697 -- 5,507 $ 4,754 2,869 5,055 -- 4,906 $ 4,081 2,603 49,259 -- 4,910 $ 4,725 1,841 39,877 -- 5,469 $ 3,117 2,137 30,827 -- 5,005 4,022 2,442 25,414 -- Total Additions to (Deductions from) Fiduciary Net Position LRS Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $ 63,214 $ 13,558 $ 48,791 $ 67,118 $ 24,018 $ 18,185 $ 60,849 $ 51,353 $ 41,550 $ 36,883 $ 320 $ 75 -- 5,194 -- 323 $ 76 -- 550 -- 373 $ 128 -- 3,573 -- 282 $ 45 -- 4,969 -- 327 $ -- -- 1,189 -- 328 $ -- -- 363 -- 327 $ -- -- 3,741 -- 323 $ -- -- 2,962 -- 339 $ -- -- 2,228 -- 325 -- -- 1,824 -- Total Additions to (Deductions from) Fiduciary Net Position $ 5,589 $ 949 $ 4,074 $ 5,296 $ 1,516 $ 691 $ 4,068 $ 3,285 $ 2,567 $ 2,149 (continued) 139 Statistical Section Additions by Source - Contribution/Investment Income (in thousands) GMPF Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ -- $ -- $ -- $ -- $ -- $ -- $ 1,282 1,521 1,703 1,892 1,893 1,990 -- -- -- -- -- -- 1,465 221 1,374 2,179 585 240 -- -- -- -- -- -- -- $ 2,018 -- 2,262 -- -- $ 2,377 -- 1,928 -- -- $ 2,537 -- 1,683 -- -- 2,611 -- 1,485 -- Total Additions to (Deductions from) Fiduciary Net Position SEAD - OPEB Member Contributions Employer Contributions Insurance Premiums Net Investment Income (Loss) Other $ 2,747 $ 1,742 $ 3,077 $ 4,071 $ 2,478 $ 2,230 $ 4,280 $ 4,305 $ 4,220 $ 4,096 $ -- $ -- 6,437 144,270 -- -- $ -- $ -- $ -- -- -- 5,532 5,075 4,502 17,193 108,148 154,868 -- -- -- -- $ -- 4,187 37,876 -- -- $ -- $ -- $ -- 1 -- 3,931 3,793 3,599 12,559 125,550 101,542 -- -- -- -- $ 5 3,328 79,193 -- -- -- 3,088 65,248 -- Total Additions to (Deductions from) Fiduciary Net Position Defined Contribution Plan - GDCP Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $ 150,707 $ $ 17,656 $ -- -- 775 -- 22,725 $ 113,223 $ 159,370 $ 17,171 $ -- -- 652 -- 16,676 $ -- -- 137 -- 16,290 $ -- -- 1,368 -- 42,063 $ 15,655 $ -- -- 1,326 -- 16,490 $ 129,344 $ 105,141 $ 14,708 $ -- -- 5,591 -- 14,921 $ -- -- (1,056) -- 14,585 $ -- -- (356) -- 82,526 $ 14,578 $ -- -- 8,324 -- 68,336 14,658 -- -- 9,078 -- Total Additions to (Deductions from) Fiduciary Net Position $ 18,431 $ 17,823 $ 16,813 $ 17,658 $ 16,981 $ 20,299 $ 13,865 $ 14,229 $ 22,902 $ 23,736 (continued) 140 Statistical Section Additions by Source - Contribution/Investment Income (in thousands) Defined Contribution Plan - 401(k) Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ 38,006 $ 40,331 $ 44,428 $ 53,724 $ 64,870 $ 79,422 $ 93,608 $ 110,848 $ 119,770 $ 129,639 25,442 4,355 18,279 21,513 25,615 29,982 36,761 43,176 47,170 51,138 -- -- -- -- -- -- -- -- -- -- 59,581 3,112 52,835 78,583 17,665 5,281 88,771 72,671 61,106 40,850 446 800 948 1,122 1,298 1,429 1,584 1,744 544 426 Total Additions to (Deductions from) Fiduciary Net Position Defined Contribution Plan - 457 Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $ 123,475 $ 48,598 $ 116,490 $ 154,942 $ 109,448 $ 116,114 $ 220,724 $ 228,439 $ 228,590 $ 222,053 $ 20,108 $ 19,551 $ 18,753 $ 17,623 $ 17,445 $ 17,413 $ 18,899 $ 20,133 $ 20,264 $ 20,216 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 70,963 7,785 55,737 73,746 18,991 7,855 59,541 46,748 39,100 25,563 339 -- -- -- -- -- -- -- 53 25 Total Additions to (Deductions from) Fiduciary Net Position Suvivor's Benefit Fund - SBF Member Contributions Employer Contributions Nonemployer Contributions Net Investment Income (Loss) Other $ 91,410 $ 27,336 $ 74,490 $ 91,369 $ 36,436 $ 25,268 $ 78,440 $ 66,881 $ 59,417 $ 45,804 n/a n/a n/a n/a n/a n/a n/a n/a n/a $ -- n/a n/a n/a n/a n/a n/a n/a n/a n/a -- n/a n/a n/a n/a n/a n/a n/a n/a n/a -- n/a n/a n/a n/a n/a n/a n/a n/a n/a 8,701 n/a n/a n/a n/a n/a n/a n/a n/a n/a -- Total Additions to (Deductions from) Fiduciary Net Position n/a n/a n/a n/a n/a n/a n/a n/a n/a $ 8,701 141 Statistical Section Deductions by Type (in thousands) ERS Benefit Payments Fiscal Year Service 2011 $ 921,136 2012 964,485 2013 1,007,816 2014 1,051,993 2015 1,076,676 2016 1,092,909 2017 1,130,996 2018 1,146,226 2019 1,171,942 2020 1,205,502 Partial Lump-Sum Option $ 30,946 31,963 35,933 24,567 24,391 19,154 19,765 21,624 20,535 19,108 Disability $ 140,849 143,317 145,152 146,245 147,418 147,706 151,772 152,469 155,193 159,443 Survivor Benefits $ 75,891 76,973 80,300 83,193 85,794 87,843 91,750 92,979 96,086 100,392 Net Total Benefit Administrative Payments Expenses Refunds $ 1,168,822 $ 14,431 $ 7,515 1,216,738 12,051 7,767 1,269,201 12,889 7,390 1,305,998 7,440 8,757 1,334,278 7,872 7,450 1,347,633 8,506 7,087 1,394,283 8,732 9,033 1,413,298 8,056 7,585 1,443,756 7,142 7,691 1,484,445 7,641 6,644 Total Deductions from Fiduciary Net Position $1,190,768 1,236,556 1,289,480 1,322,195 1,349,600 1,363,226 1,412,048 1,428,939 1,458,589 1,498,730 PSERS Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Service $ 46,548 46,911 47,805 48,911 49,704 50,572 52,012 54,257 56,008 58,412 Benefit Payments Disability $ 5,369 5,369 5,328 5,280 5,227 5,172 5,117 5,114 4,991 5,000 Survivor Benefits $ 2,063 1,903 1,908 1,998 2,041 2,160 2,249 2,449 2,638 2,678 Total Benefit Payments $ 53,980 54,183 55,041 56,189 56,972 57,903 59,378 61,820 63,637 66,090 Net Administrative Expenses $ 2,046 2,040 2,021 1,450 1,545 1,321 1,308 1,331 1,377 1,424 Refunds $ 267 349 492 514 456 465 1,031 701 609 572 Total Deductions from Fiduciary Net Position $ 56,293 56,572 57,554 58,153 58,973 59,689 61,717 63,852 65,623 68,086 GJRS Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Service $ 11,245 12,608 14,273 15,305 16,084 16,677 19,349 22,239 24,642 26,203 Benefit Payments Disability $ 112 113 112 112 112 112 114 117 119 120 Survivor Benefits $ 1,654 1,695 1,865 2,024 2,169 2,222 2,321 2,578 2,701 2,940 Total Benefit Payments $ 13,011 14,416 16,250 17,441 18,365 19,011 21,784 24,934 27,462 29,263 Net Administrative Expenses $ 290 310 313 754 819 754 728 794 820 849 Refunds $ 260 146 105 22 772 261 166 150 553 213 Total Deductions from Fiduciary Net Position $ 13,561 14,872 16,668 18,217 19,956 20,026 22,678 25,878 28,835 30,325 (continued) 142 Statistical Section Deductions by Type (in thousands) LRS Benefit Payments Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Service $ 1,309 1,364 1,376 1,336 1,315 1,294 1,323 1,347 1,383 1,362 Survivor Benefits $ 452 446 448 465 441 429 440 425 473 433 Total Benefit Payments $ 1,761 1,810 1,824 1,801 1,756 1,724 1,763 1,772 1,856 1,795 Net Administrative Expenses $ 131 $ 110 119 152 169 313 224 283 290 305 Refunds 60 74 88 30 26 38 75 22 70 21 Total Deductions from Fiduciary Net Position $ 1,952 1,994 2,031 1,983 1,951 2,075 2,062 2,077 2,216 2,121 GMPF Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Benefit Payments Service* $ 579 678 772 841 896 963 1,042 1,138 1,221 1,297 Total Benefit Payments $ 579 678 772 841 896 963 1,042 1,138 1,221 1,297 Net Administrative Expenses Total Deductions from Fiduciary Net Position $ 37 $ 616 34 712 31 803 110 951 121 1,017 262 1,225 244 1,286 225 1,363 235 1,456 249 1,546 *The only type of retirement in GMPF is a service retirement. SEAD-OPEB Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Benefit Payments Death Benefits** $ 23,060 24,855 28,482 28,891 32,979 33,911 36,058 36,249 37,416 44,754 Total Benefit Payments $ 23,060 24,855 28,482 28,891 32,979 33,911 36,058 36,249 37,416 44,754 Net Administrative Expenses Total Deductions from Fiduciary Net Position $ 203 $ 23,263 203 25,058 203 28,685 414 29,305 428 33,407 599 34,510 576 36,634 681 36,930 716 38,132 720 45,474 **The only type of benefit in SEAD-OPEB is a death benefit. 143 (continued) Statistical Section Deductions by Type (in thousands) Defined Contribution Plan - GDCP Benefit Payments Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Periodic Payments $ 9 11 9 9 -- -- -- -- 10 7 Total Benefit Payments $ 9 11 9 9 -- 35 -- -- 10 7 Net Administrative Expenses $ 1,180 $ 1,138 1,160 991 990 766 785 852 882 913 Refunds 11,390 12,749 14,415 17,721 22,340 11,911 11,544 10,080 10,931 10,510 Total Deductions from Fiduciary Net Position $ 12,579 13,898 15,584 18,721 23,330 12,712 12,329 10,932 11,823 11,430 Defined Contribution Plan - 401(k) Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Benefit Payments Distributions $ 42,457 36,986 57,351 43,133 95,428 46,508 55,866 64,103 79,644 92,355 Total Benefit Payments $ 42,457 36,986 57,351 43,133 95,428 46,508 55,866 64,103 79,644 92,355 Net Administrative Expenses Total Deductions from Fiduciary Net Position $ 2,054 $ 44,511 2,111 39,097 2,457 59,808 2,300 45,433 2,755 98,183 2,832 49,340 3,096 58,962 3,639 67,742 3,431 83,075 3,816 96,171 Defined Contribution Plan - 457 Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Benefit Payments Distributions $ 44,773 41,835 63,388 45,807 50,479 43,288 38,872 40,690 42,081 40,067 Total Benefit Payments $ 44,773 41,835 63,388 45,807 50,479 43,288 38,872 40,690 42,081 40,067 Net Administrative Expenses Total Deductions from Fiduciary Net Position $ 1,064 $ 45,837 910 42,745 996 64,384 812 46,619 866 51,345 820 44,108 789 39,661 442 41,132 724 42,805 745 40,812 144 (continued) Statistical Section Deductions by Type (in thousands) Survivors' Benefit Fund Benefit Payments Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Death Benefits n/a n/a n/a n/a n/a n/a n/a n/a n/a -- Total Benefit Payments n/a n/a n/a n/a n/a n/a n/a n/a n/a -- Net Administrative Expenses n/a n/a n/a n/a n/a n/a n/a n/a n/a -- Total Deductions from Fiduciary Net Position n/a n/a n/a n/a n/a n/a n/a n/a n/a -- 145 Statistical Section Changes in Fiduciary Net Position (in thousands) ERS Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position PSERS Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position GJRS Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position LRS Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position GMPF Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $2,569,882 $ 542,377 $1,893,796 $2,483,923 $1,026,033 $ 768,829 $2,136,780 $1,855,320 $1,558,875 $1,383,544 1,190,768 1,236,556 1,289,480 1,322,195 1,349,600 1,363,226 1,412,048 1,428,939 1,458,589 1,498,730 -- (12,724) (5,009) -- -- -- -- -- -- -- 1,379,114 (706,903) 599,307 1,161,728 (323,567) (594,397) 724,732 426,381 100,286 (115,186) 137,056 56,293 -- 80,763 30,864 56,572 -- (25,708) 114,434 57,554 -- 56,880 152,618 58,153 -- 94,465 60,390 58,973 -- 1,417 40,314 59,689 -- (19,375) 126,076 61,717 -- 64,359 109,856 63,852 -- 46,004 93,072 65,623 -- 27,449 84,747 68,086 -- 16,661 63,214 13,561 -- 49,653 13,558 14,872 -- (1,314) 48,791 16,668 -- 32,123 67,118 18,217 -- 48,901 24,018 19,956 -- 4,062 18,185 20,026 -- (1,841) 60,849 22,678 -- 38,171 51,353 25,878 -- 25,475 41,550 28,835 -- 12,715 36,883 30,325 -- 6,558 5,589 1,952 -- 3,637 949 1,994 -- (1,045) 4,074 2,031 -- 2,043 5,296 1,983 -- 3,313 1,516 1,951 -- (435) 691 2,075 -- (1,384) 4,068 2,062 -- 2,006 3,285 2,077 -- 1,208 2,567 2,216 -- 351 2,149 2,121 -- 28 2,747 616 -- 2,131 1,742 712 -- 1,030 3,077 803 -- 2,274 4,071 951 -- 3,120 2,478 1,017 -- 1,461 2,230 1,225 -- 1,005 4,280 1,286 -- 2,994 4,305 1,363 -- 2,942 4,220 1,456 -- 2,764 4,096 1,546 -- 2,550 (continued) 146 Statistical Section Changes in Fiduciary Net Position (in thousands) SEAD - OPEB Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position Defined Contribution Plan - GDCP Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position Defined Contribution Plan - 401(k) Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position Defined Contribution Plan - 457 Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position Survivors' Benefit Fund Total Additions Total Deductions Transfer In (Out) Changes in Fiduciary Net Position 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ 150,707 $ 23,263 -- 127,444 22,725 $ 113,223 $ 159,370 $ 25,058 28,685 29,305 12,724 5,009 5 10,391 89,547 130,070 42,063 $ 33,407 2 8,658 16,490 $ 129,344 $ 105,141 $ 34,510 36,634 36,930 2 -- -- (18,018) 92,710 68,211 82,526 $ 38,132 -- 44,394 68,336 45,474 -- 22,862 18,431 12,579 -- 5,852 17,823 13,898 -- 3,925 16,813 15,584 -- 1,229 17,658 18,721 -- (1,063) 16,981 23,330 -- (6,349) 20,299 12,712 -- 7,587 13,865 12,329 -- 1,536 14,229 10,932 -- 3,297 22,902 11,823 -- 11,079 23,736 11,430 -- 12,306 123,475 44,511 -- 78,964 48,598 39,097 -- 9,501 116,490 59,808 -- 56,682 154,942 45,433 -- 109,509 109,448 98,183 -- 11,265 116,114 49,340 -- 66,774 220,724 58,962 -- 161,762 228,439 67,742 -- 160,697 228,590 83,075 -- 145,515 222,053 96,171 -- 125,882 91,410 45,837 -- 45,573 27,336 42,745 -- (15,409) 74,490 64,384 -- 10,106 91,369 46,619 -- 44,750 36,436 51,345 -- (14,909) 25,268 44,108 -- (18,840) 78,440 39,661 -- 38,779 66,881 41,132 -- 25,749 59,417 42,805 -- 16,612 45,804 40,812 -- 4,992 n/a n/a n/a n/a n/a n/a n/a n/a n/a 8,701 n/a n/a n/a n/a n/a n/a n/a n/a n/a -- n/a n/a n/a n/a n/a n/a n/a n/a n/a -- n/a n/a n/a n/a n/a n/a n/a n/a n/a 8,701 147 Statistical Section Number of Retirees ERS Retirees 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 0 10,000 20,000 30,000 53,249 52,275 50,863 49,632 48,449 47,180 45,819 44,546 42,053 40,250 40,000 50,000 60,000 GJRS Retirees 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 0 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 0 295 290 278 262 235 220 414 400 358 346 50 100 150 200 250 300 350 400 450 GMPF Retirees 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 210 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 0 1,223 1,148 1,076 985 915 844 795 739 660 568 200 400 600 800 1,000 1,200 1,400 PSERS Retirees 10,000 19,232 18,990 18,492 18,104 17,626 16,994 16,434 15,742 15,106 14,613 20,000 LRS Retirees 269 269 267 263 257 260 259 259 244 244 220 230 240 250 260 270 148 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $6,500 GJRS $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GMPF $100 $90 $80 $70 $60 $50 $40 $30 $20 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PSERS $320 $300 $280 $260 $240 $220 $200 $180 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LRS $650 $600 $550 $500 $450 $400 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 149 Statistical Section Annual Benefit $1,500,000 ERS Annual Benefit $1,400,000 Thousands $1,300,000 $1,200,000 $1,100,000 Thousands $1,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $30,000 GJRS Annual Benefit $25,000 $20,000 $15,000 $10,000 $5,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GMPF Annual Benefit Thousands $1,400 $1,200 $1,000 $800 $600 $400 $200 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Thousands Thousands $70,000 PSERS Annual Benefit $60,000 $50,000 $40,000 $30,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LRS Annual Benefit $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 150 Statistical Section Withdrawal Statistics ERS Withdrawals 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PSERS Withdrawals 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GJRS Withdrawals 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LRS Withdrawals 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ERS Average Withdrawal $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PSERS Average Withdrawal $250 $240 $230 $220 $210 $200 $190 $180 $170 $160 $150 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GJRS Average Withdrawal $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LRS Average Withdrawal $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: The GMPF Plan does not have a refund feature. ERS Annual Withdrawal (in thousands) $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PSERS Annual Withdrawal (in thousands) $1,200 $1,000 $800 $600 $400 $200 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GJRS Annual Withdrawal (in thousands) $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LRS Annual Withdrawal (in thousands) $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 151 Statistical Section Average Monthly Benefit Payment for New Retirees - ERS Years of Credited Service 10-15 16-20 21-25 26-30 Over 30 Total 2011 Average Monthly Benefit $ 734.74 $ 1,107.16 $ 1,504.51 $ 1,995.24 $ 3,575.54 $ 2,143.95 Average Final Average Salary $ 3,228.07 $ 3,205.88 $ 3,478.73 $ 3,762.88 $ 4,532.07 $ 3,825.88 Number of Retirees 437 322 389 461 885 2,494 2012 Average Monthly Benefit $ 729.60 $ 1,247.16 $ 1,624.82 $ 2,125.35 $ 3,708.26 $ 2,109.84 Average Final Average Salary $ 3,040.00 $ 3,275.37 $ 3,388.85 $ 3,807.26 $ 4,702.47 $ 3,775.94 Number of Retirees 518 385 414 486 776 2,578 2013 Average Monthly Benefit $ 836.73 $ 1,183.19 $ 1,650.14 $ 2,120.33 $ 3,487.96 $ 2,088.46 Average Final Average Salary $ 3,391.36 $ 3,339.84 $ 3,411.24 $ 3,765.16 $ 4,659.17 $ 3,855.98 Number of Retirees 684 453 466 780 1,033 3,416 2014 Average Monthly Benefit $ 769.91 $ 1,232.07 $ 1,527.47 $ 2,057.32 $ 3,242.25 $ 1,870.02 Average Final Average Salary $ 3,309.44 $ 3,337.66 $ 3,263.54 $ 3,718.37 $ 4,486.34 $ 3,699.86 Number of Retirees 483 306 311 477 542 2,119 2015 Average Monthly Benefit $ 750.98 $ 1,224.00 $ 1,620.88 $ 2,068.82 $ 3,074.69 $ 1,837.97 Average Final Average Salary $ 3,269.25 $ 3,443.88 $ 3,547.63 $ 3,750.99 $ 4,536.68 $ 3,760.27 Number of Retirees 524 316 341 623 561 2,365 2016 Average Monthly Benefit $ 759.54 $ 1,224.52 $ 1,760.28 $ 2,171.75 $ 2,996.81 $ 1,783.98 Average Final Average Salary $ 3,189.20 $ 3,376.84 $ 3,657.08 $ 3,935.01 $ 4,618.83 $ 3,764.34 Number of Retirees 559 340 330 530 466 2,225 2017 Average Monthly Benefit $ 796.76 $ 1,204.27 $ 1,786.30 $ 2,109.53 $ 2,870.19 $ 1,732.36 Average Final Average Salary $ 3,479.90 $ 3,405.67 $ 3,850.73 $ 3,813.78 $ 4,595.25 $ 3,829.66 Number of Retirees 551 395 359 453 470 2,228 2018 Average Monthly Benefit $ 794.94 $ 1,318.26 $ 1,679.64 $ 2,302.80 $ 2,879.55 $ 1,791.49 Average Final Average Salary $ 3,505.83 $ 3,674.56 $ 3,707.56 $ 4,154.11 $ 4,638.01 $ 3,950.06 Number of Retirees 570 389 306 525 476 2,266 2019 Average Monthly Benefit $ 806.32 $ 1,332.96 $ 1,888.94 $ 2,269.75 $ 3,089.58 $ 1,852.26 Average Final Average Salary $ 3,624.77 $ 3,867.03 $ 4,173.06 $ 4,178.96 $ 4,954.06 $ 4,153.40 Number of Retirees 624 436 335 461 545 2,401 2020 Average Monthly Benefit $ 790.83 $ 1,310.46 $ 1,755.20 $ 2,335.40 $ 3,234.98 $ 1,935.05 Average Final Average Salary $ 3,609.89 $ 3,733.97 $ 3,853.51 $ 4,268.19 $ 5,132.48 $ 4,167.37 Number of Retirees 469 368 341 441 501 2,120 (continued) 152 Statistical Section Average Monthly Benefit Payment for New Retirees - PSERS 2011 Average Monthly Benefit Number of Retirees 2012 Average Monthly Benefit Number of Retirees 2013 Average Monthly Benefit Number of Retirees 2014 Average Monthly Benefit Number of Retirees 2015 Average Monthly Benefit Number of Retirees 2016 Average Monthly Benefit Number of Retirees 2017 Average Monthly Benefit Number of Retirees 2018 Average Monthly Benefit Number of Retirees 2019 Average Monthly Benefit Number of Retirees 2020 Average Monthly Benefit Number of Retirees 10-15 16-20 Years of Credited Service 21-25 26-30 Over 30 Total $ 158.67 $ 227.68 $ 297.01 $ 374.01 $ 479.42 $ 245.04 463 200 126 79 114 982 $ 159.25 $ 236.46 $ 303.66 $ 362.36 $ 476.51 $ 238.59 480 182 136 74 87 958 $ 159.34 $ 232.10 $ 300.66 $ 360.75 $ 478.49 $ 245.72 580 255 175 113 133 1,256 $ 154.20 $ 227.41 $ 297.58 $ 345.98 $ 437.20 $ 233.71 603 268 147 121 131 1,270 $ 155.20 $ 225.02 $ 290.82 $ 360.11 $ 471.12 $ 233.25 568 254 166 105 99 1,192 $ 160.28 $ 232.09 $ 298.45 $ 358.11 $ 489.48 $ 242.18 529 273 454 103 103 1,162 $ 153.93 $ 226.90 $ 286.35 $ 348.16 $ 437.62 $ 228.12 515 230 126 78 104 1,053 $ 156.77 $ 228.48 $ 293.26 $ 363.46 $ 480.15 $ 238.68 508 241 148 91 102 1,090 $ 162.22 $ 225.88 $ 301.08 $ 366.63 $ 485.44 $ 245.95 486 266 162 109 100 1,123 $ 169.11 $ 237.94 $ 306.69 $ 376.31 $ 479.54 $ 257.59 424 230 119 73 124 970 Note: PSERS is not a final average pay plan. (continued) 153 Statistical Section Average Monthly Benefit Payment for New Retirees - GJRS Years of Credited Service 10-15 16-20 21-25 26-30 Over 30 Total 2011 Average Monthly Benefit $ 4,632.24 $ 10,170.24 $ 9,799.81 $ 8,428.40 $ Average Final Average Salary $ 9,211.23 $ 14,910.13 $ 13,052.66 $ 11,264.63 $ Number of Retirees 4 2 2 3 -- $ 7,614.02 -- $ 11,505.85 -- 11 2012 Average Monthly Benefit $ 4,204.95 $ 6,610.26 $ 7,565.84 $ 8,791.96 $ 7,831.84 $ 6,915.64 Average Final Average Salary $ 7,788.39 $ 9,887.17 $ 10,361.29 $ 11,714.95 $ 10,490.01 $ 10,035.77 Number of Retirees 5 4 4 7 1 20 2013 Average Monthly Benefit $ 5,179.20 $ 5,844.29 $ 6,170.52 $ 7,954.14 $ 6,169.77 $ 6,132.24 Average Final Average Salary $ 9,271.48 $ 8,344.35 $ 8,370.72 $ 10,624.52 $ 8,864.27 $ 9,010.27 Number of Retirees 8 7 7 5 7 34 2014 Average Monthly Benefit $ 2,989.92 $ 4,468.12 $ 6,496.50 $ Average Final Average Salary $ 6,265.39 $ 7,772.95 $ 8,998.48 $ Number of Retirees 6 2 7 -- $ 2,703.82 $ 4,470.15 -- $ 4,289.57 $ 7,166.46 -- 3 18 2015 Average Monthly Benefit $ 4,010.30 $ 6,317.44 $ 7,051.15 $ 7,589.28 $ 2,406.28 $ 6,267.69 Average Final Average Salary $ 6,937.39 $ 9,141.51 $ 9,751.01 $ 10,165.12 $ 3,222.98 $ 8,905.45 Number of Retirees 2 5 7 2 1 17 2016 Average Monthly Benefit $ Average Final Average Salary $ Number of Retirees -- $ 6,534.36 $ 8,121.58 $ -- $ 9,655.37 $ 11,204.04 $ -- 6 2 -- $ 8,635.31 $ 7,120.51 -- $ 11,566.18 $ 10,211.83 -- 1 9 2017 Average Monthly Benefit $ 4,519.89 $ 6,690.09 $ 8,737.31 $ 5,895.46 $ 8,026.56 $ 6,964.60 Average Final Average Salary $ 9,049.84 $ 9,833.21 $ 12,013.62 $ 7,896.41 $ 10,750.81 $ 10,232.13 Number of Retirees 10 18 13 4 10 55 2018 Average Monthly Benefit $ 6,056.07 $ 7,565.45 $ 7,700.44 $ 7,979.26 $ Average Final Average Salary $ 11,385.55 $ 11,096.74 $ 10,618.33 $ 10,687.46 $ Number of Retirees 3 5 7 2 -- $ 7,403.36 -- $ 10,902.57 -- 17 2019 Average Monthly Benefit $ 4,646.94 $ 6,293.69 $ 8,486.61 $ 7,795.06 $ 8,348.20 $ 6,878.64 Average Final Average Salary $ 8,909.34 $ 9,278.67 $ 11,566.18 $ 11,014.40 $ 11,181.62 $ 10,204.03 Number of Retirees 9 10 7 8 5 39 2020 Average Monthly Benefit $ 4,438.61 $ 5,557.00 $ 7,647.49 $ 8,800.28 $ 9,205.45 $ 6,727.54 Average Final Average Salary $ 9,230.72 $ 10,079.17 $ 11,629.28 $ 11,787.15 $ 12,329.82 $ 10,805.40 Number of Retirees 4 6 5 2 3 20 (continued) 154 Statistical Section Average Monthly Benefit Payment for New Retirees - LRS 2011 Average Monthly Benefit Number of Retirees 2012 Average Monthly Benefit Number of Retirees 2013 Average Monthly Benefit Number of Retirees 2014 Average Monthly Benefit Number of Retirees 2015 Average Monthly Benefit Number of Retirees 2016 Average Monthly Benefit Number of Retirees 2017 Average Monthly Benefit Number of Retirees 2018 Average Monthly Benefit Number of Retirees 2019 Average Monthly Benefit Number of Retirees 2020 Average Monthly Benefit Number of Retirees 8-14 15-19 Years of Credited Service 20-24 25-29 Over 29 Total $ 341.79 $ 589.12 $ 12 1 -- $ 843.26 $ 934.73 $ 456.99 -- 2 1 16 $ 363.66 $ 549.08 $ 4 2 -- $ -- -- $ 1,286.43 $ 548.46 -- 1 7 $ 308.15 $ 568.93 $ 670.94 $ 14 4 2 -- $ 1,166.93 $ 497.03 -- 3 23 $ 289.25 $ 480.21 $ 3 1 -- $ -- -- $ -- -- $ 336.99 -- 4 $ 341.03 $ 382.95 $ 642.84 $ 5 1 3 -- $ 1,228.50 $ 588.51 -- 2 11 $ 322.51 $ 524.09 $ 5 2 -- $ -- -- $ -- -- $ 380.11 -- 7 $ 362.52 $ 557.02 $ 740.79 $ 6 3 2 -- $ -- -- $ 484.34 -- 11 $ 323.56 $ 476.35 $ 719.16 $ 5 3 1 -- $ -- -- $ 418.44 -- 9 $ 358.24 $ 493.00 $ 658.44 $ 793.55 $ 6 2 2 2 -- $ 503.28 -- 12 $ 374.69 $ 494.79 $ 5 3 -- $ 640.36 $ -- 1 -- $ 444.25 -- 9 Note: LRS is not a final average pay plan. (continued) 155 Statistical Section Average Monthly Benefit Payment for New Retirees - GMPF 2011 Average Monthly Benefit Number of Retirees 2012 Average Monthly Benefit Number of Retirees 2013 Average Monthly Benefit Number of Retirees 2014 Average Monthly Benefit Number of Retirees 2015 Average Monthly Benefit Number of Retirees 2016 Average Monthly Benefit Number of Retirees 2017 Average Monthly Benefit Number of Retirees 2018 Average Monthly Benefit Number of Retirees 2019 Average Monthly Benefit Number of Retirees 2020 Average Monthly Benefit Number of Retirees Note: GMPF is not a final average pay plan. 20-25 Years of Credited Service 26-30 Over 30 Total $ 63.16 $ 91.47 $ 100.00 $ 90.40 19 17 52 88 $ 61.54 $ 90.33 $ 100.00 $ 92.83 13 15 63 90 $ 59.44 $ 89.55 $ 100.00 $ 88.29 18 22 42 82 $ 61.11 $ 90.53 $ 100.00 $ 91.02 9 19 31 59 $ 62.07 $ 94.10 $ 100.00 $ 86.99 15 16 20 51 $ 66.30 $ 89.29 $ 100.00 $ 85.07 27 14 30 71 $ 65.00 $ 89.05 $ 100.00 $ 91.09 11 21 37 69 $ 61.00 $ 87.39 $ 100.00 $ 91.17 10 23 44 77 $ 67.14 $ 91.11 $ 100.00 $ 87.38 21 36 23 80 $ 61.25 $ 89.29 $ 100.00 $ 86.49 20 21 33 74 156 Statistical Section Retired Members by Retirement Type ERS June 30, 2020 Amount of Monthly Benefit $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3,001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 over 6,000 Retirement Type Service Disability Survivor 3,851 262 533 8,770 1,047 421 7,255 1,171 286 5,548 977 187 4,424 792 127 3,419 601 83 2,650 455 58 2,163 334 45 1,694 240 26 1,494 183 15 1,165 126 7 783 78 8 1,857 103 11 Totals 45,073 6,369 1,807 PSERS June 30, 2020 Amount of Monthly Benefit $ 1 - 100 101 - 200 201 - 300 301 - 400 401 - 500 over 500 Totals Retirement Type Service Disability Survivor 87 5 225 5,780 33 194 5,526 220 54 2,880 374 9 1,799 278 6 1,534 227 1 17,606 1,137 489 (continued) 157 Statistical Section Retired Members by Retirement Type GJRS June 30, 2020 LRS June 30, 2020 GMPF June 30, 2020 Amount of Monthly Benefit $ 1 - 1,000 1,001 - 2,000 2,001 - 3,000 3,001 - 4,000 4,001 - 5,000 5,001 - 6,000 6,001 - 7,000 7,001 - 8,000 over 8,000 Totals Retirement Type Service Disability Survivor 20 -- 2 22 -- 8 26 -- 5 40 -- 3 27 2 4 17 -- -- 37 -- -- 70 -- -- 131 -- -- 390 2 22 Amount of Monthly Benefit $ 1 - 250 251 - 500 501 - 750 751 - 1,000 over 1,000 Totals Retirement Type Service Disability Survivor 20 -- -- 126 -- 10 66 -- 3 23 -- 3 16 -- 2 251 -- 18 Amount of Monthly Benefit Retirement Type Service $ 1 - 49 50 - 100 over 100 -- 1,223 -- Totals 1,223 158 Statistical Section Retired Members by Optional Form of Benefit ERS June 30, 2020 Amount of Monthly Benefit Form of Benefit Maximum Plan Option 1 Option 2 Option 3 Option 4 Option 5A Option 5B $ 1 - 500 501 - 1,000 1,001 - 1,500 1,501 - 2,000 2,001 - 2,500 2,501 - 3,000 3,001 - 3,500 3,501 - 4,000 4,001 - 4,500 4,501 - 5,000 5,001 - 5,500 5,501 - 6,000 over 6,000 1,332 419 1,261 433 970 170 61 4,249 1,260 1,997 689 1,405 430 208 3,511 1,137 1,511 648 1,152 502 251 2,766 995 983 574 730 356 308 2,137 751 700 511 604 353 287 1,637 552 502 348 634 214 216 1,135 410 344 308 618 174 174 870 266 280 206 640 134 146 624 196 177 174 602 63 124 498 120 136 173 617 63 85 320 112 92 110 569 44 51 208 48 65 112 360 28 48 421 118 163 219 924 47 79 Totals 19,708 6,384 8,211 4,505 9,825 2,578 2,038 Maximum Plan Single life annuity Option 1 Reduced single life annuity with a guarantee of the remainder of the annuity savings fund account (contributions and interest), if any, to be paid upon the retiree's death Option 2 100% joint and survivor annuity with a popup option upon divorce Option 3 50% joint and survivor annuity with a popup option upon divorce Option 4 Various options, including a specified monthly amount payable to a beneficiary upon the retiree's death, several period certain annuities of varying length, and a five-year accelerated benefit Option 5A 100% joint and survivor annuity with a popup option upon divorce or the death of the beneficiary before the retiree Option 5B 50% joint and survivor annuity with a popup option upon divorce or the death of the beneficiary before the retiree (continued) 159 Statistical Section Retired Members by Optional Form of Benefit PSERS June 30, 2020 Amount of Monthly Benefit $ 1 - 100 101 - 200 201 - 300 301 - 400 401 - 500 over 500 Form of Benefit Maximum Plan Option AA Option AB Option AC Option AD Option B -- 33 249 3,876 1,210 390 4,638 619 216 2,659 361 90 1,808 153 51 1,617 77 32 6 22 7 10 154 367 4 84 239 7 36 110 6 13 52 4 2 30 Totals 14,598 2,453 1,028 37 311 805 Maximum Plan Single life annuity Option AA 100% joint and survivor annuity Option AB 50% joint and survivor annuity Option AC Joint and survivor annuity with a specified monthly amount payable to a beneficiary Option AD Joint and survivor annuity with the amount payable to a beneficiary limited by the age difference between the retiree and the beneficiary Option B Annuity for a guaranteed period of time (5, 10, 15, or 20 years). If retiree outlives guarantee period, there is no benefit due after retiree's death (continued) 160 Statistical Section Retired Members by Optional Form of Benefit GJRS June 30, 2020 Amount of Monthly Benefit Spousal Maximum Plan Coverage Option 1 Form of Benefit Option 2 Option 3 Option 4A Option 4B Option 4C $ 1 - 1,000 1,001 - 2,000 2,001 - 3,000 3,001 - 4,000 4,001 - 5,000 5,001 - 6,000 6,001 - 7,000 7,000 - 8,000 over 8,000 1 21 -- -- -- -- -- -- 3 27 -- -- -- -- -- -- 5 26 -- -- -- -- -- -- 3 40 -- -- -- -- -- -- 5 28 -- -- -- -- -- -- 7 9 1 -- -- -- -- -- 8 29 -- -- -- -- -- -- 22 48 -- -- -- -- -- -- 25 106 -- -- -- -- -- -- Totals 79 334 1 -- -- -- -- -- Maximum Plan Single life annuity Indicates the member paid additional contributions to provide a 50% joint and survivor annuity at Spousal Coverage* retirement Option 1** 100% joint and survivor annuity Option 2** 66 % joint and survivor annuity Option 3** 50% joint and survivor annuity Option 4A** 100% joint and survivor annuity with a popup option upon death of beneficiary before the retiree Option 4B** 66 % joint and survivor annuity with a popup option upon death of beneficiary before the retiree Option 4C** 50% joint and survivor annuity with a popup option upon death of beneficiary before the retiree *Only available if membership start date prior to July 1, 2012 **Only available if membership start date on or after July 1, 2012 (continued) 161 Statistical Section Retired Members by Optional Form of Benefit LRS June 30, 2020 Amount of Monthly Benefit $ 1 - 250 251 - 500 501 - 750 751 - 1,000 over 1,000 Form of Benefit Maximum Plan Option B1 Option B2 -- 16 4 50 76 10 39 20 10 6 17 3 7 8 3 Totals 102 137 30 Maximum Plan Single life annuity Option B1 100% joint and survivor annuity Option B2 50% joint and survivor annuity GMPF and SEAD - OPEB June 30, 2020 The GMPF Plan provides a benefit only in one form, a life annuity. All 1,223 current retirees, therefore, have this same form of benefit. The SEAD-OPEB plan provides only a lump sum death benefit to a member's beneficiary(ies). 162 Statistical Section Principal Participating Employers FY11 ERS Department of Corrections Department of Behavioral Health and Developmental Disabilities Department of Transportation Department of Labor Department of Juvenile Justice Department of Natural Resources Department of Human Services Department of Public Safety Department of Community Health Department of Revenue Total Top Employers Total ERS Member Count PSERS Gwinnett County Schools Cobb County Schools Dekalb County Schools Clayton County Schools Muscogee County Schools Cherokee County Schools Henry County Schools Forsyth County Schools Richmond County Schools Houston County Schools Total Top Employers Total PSERS Member Count GJRS Council of Superior Court Judges Council of State Court Judges Prosecuting Attorney's Council Council of Juvenile Judges Total Top Employers Total GJRS Member Count Data for SEAD-OPEB is not available. Member Count % of Total Plan 12,102 6,533 4,599 3,687 3,494 1,991 1,918 1,630 1,574 1,069 38,597 66,081 18.3 % 9.9 7.0 5.6 5.3 3.0 2.9 2.5 2.4 1.6 58.4 3,936 10.0 2,458 6.3 2,269 5.8 1,279 3.3 942 2.4 904 2.3 892 2.3 881 2.2 859 2.2 722 1.8 15,142 38.6 39,255 202 39.8 114 22.4 95 18.7 72 14.2 483 95.1 508 163 Statistical Section Principal Participating Employers FY20 ERS Department of Corrections Department of Behavioral Health and Developmental Disabilities Department of Transportation Department of Human Services Department of Juvenile Justice Department of Community Supervision Department of Public Safety Department of Natural Resources Department of Labor Department of Public Health Total Top Employers Total ERS Member Count PSERS Gwinnett County Schools Cobb County Schools Dekalb County Schools Clayton County Schools Forsyth County Schools Chatham County Schools Houston County Schools Muscogee County Schools Richmond County Schools Cherokee County Schools Total Top Employers Total PSERS Member Count GJRS Council of Superior Court Judges Council of State Court Judges Council of Juvenile Judges Solicitor General Total Top Employers Total GJRS Member Count SEAD - OPEB Department of Corrections Department of Transportation Department of Human Services Department of Behavioral Health and Developmental Disabilities Department of Juvenile Justice Department of Natural Resources Department of Community Supervision Department of Public Safety Department of Labor Georgia Bureau of Investigation Total Top Employers Total Active Member Count 164 Member Count % of Total Plan 8,110 3,980 3,808 3,459 2,842 1,877 1,779 1,728 1,000 936 29,519 57,059 14.2 % 7.0 6.7 6.1 5.0 3.3 3.1 3.0 1.8 1.6 51.7 3,489 10.0 2,323 6.7 2,120 6.1 1,192 3.4 1,037 3.0 921 2.7 810 2.3 765 2.2 749 2.2 715 2.1 14,121 40.7 34,736 210 40.2 125 24.0 74 14.2 58 11.1 467 89.5 522 2,844 13.5 1,886 9.0 1,349 6.4 1,077 5.1 825 3.9 801 3.8 752 3.6 685 3.3 529 2.5 363 1.7 11,111 52.9 21,020 Statistical Section Schedule of Revenue and Expenses State Employees' Assurance Department Active Members Fund Year ended June 30, 2020 (In thousands) Operating revenue: Insurance premiums Total operating revenue 2020 $ 547 547 2019 531 531 2018 540 540 Operating expenses: Death benefits Administrative expenses Total operating expenses Total operating loss 3,588 80 3,668 (3,121) 3,424 80 3,504 (2,973) 2,972 76 3,048 (2,508) Nonoperating revenues (expenses): Allocation of investment income from pooled investment fund Investment expenses Total nonoperating revenues Change in net position 16,651 (67) 16,584 13,463 19,708 (65) 19,643 16,670 24,493 (64) 24,429 21,921 Total net position: Beginning of year End of year 305,877 $ 319,340 289,207 305,877 267,286 289,207 2017 599 599 4,019 64 4,083 (3,484) 29,847 (62) 29,785 26,301 240,985 267,286 In fiscal year 2017, the System adopted the provisions of GASB Statement No. 74 and revised its accounting methodology with regard to the presentation of SEAD-Active, and began reporting it as a proprietary fund. In previous years it was reported as a fiduciary fund. Additional years will be displayed as they become available. 165 Statistical Section Schedule of Membership State Employees' Assurance Department Active Members Fund Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Covered Lives 55,412 49,212 43,127 38,711 35,142 31,869 28,873 26,032 23,368 21,020 166 Statistical Section Statistical Data at June 30, 2020 System ERS PSERS GJRS LRS Net Position $13.5 billion $958.2 million $485.9 million Employer and Nonemployer Contributions Old Plan: 19.91% New Plan: 24.66% GSEPS 21.64% ($643.9 million) Employee Contributions Old Plan: 6% (with 4.75% pickup) New Plan: 1.25% GSEPS: 1.25% ($35.8 million) Active Members Old Plan: (0.05%) 29 New Plan: (36.54%) 20,850 GSEPS: (63.41%) 36,180 Total: 57,059 $32.5 million 7.83% ($6.5 million) $36 yr prior July 1, 2012 $90 yr after July 1, 2012 ($2.3 million) 7.5% +2.5% Spousal, if applicable ($5.0 million) 34,736 522 Inactives 63,495 50,276 64 $34.6 million 0% (None) 8.5% (with 4.75% pickup) ($325 thousand) 219 170 Retirees Total: 53,249 Service: 41,100 Beneficiary: 6,065 Disability: 5,494 Inv. Sep.: 435 Law. Enf.: 155 Annual Payment $1.5 billion 19,232 $66.2 million 414 $29.3 million 269 $1.8 million Average Monthly Benefit(1) $2,206 $288 $5,868 $526 GDCP $138.0 million None 7.5% ($14.7 million) 9,633 119,029 2 $10 thousand $4,868 SCJRF $6 thousand $340 thousand None None None 5 $340 thousand $5,035 DARF $2 thousand $34 thousand None SEAD $1.3 billion None New Plan: 0.25% Old Plan: 0.50% ($3.1 million) GMPF $29.0 million $2.6 million (1) GDCP average benefit payment is an annual amount. None None No. Insured: 21,020 14,092 167 None 1,016 66 3 No. Insured: 44,130 1,223 $34 thousand $953 No. of Claims: 1,298 Amt. Pd: $48.0 million Average Claim: $36,989 $1.3 million $92 Appendix House Resolution 1126 By: Representatives Benton of the 31st, Greene of the 151st, Frye of the 118th, Bentley of the 139th, and Erwin of the 28th A RESOLUTION 1 Recognizing and commending the Employees' Retirement System of Georgia on the grand 2 occasion of its 70th anniversary; and for other purposes. 3 WHEREAS, the Employees' Retirement System of Georgia (ERSGA) was established on 4 January 1, 1950, by an Act of the Georgia General Assembly to provide retirement benefits 5 for all state employees and is governed by a seven-member board of trustees; and 6 WHEREAS, as of January 2020, ERSGA pension plans serve over 108,000 active members 7 and 72,000 retirees and beneficiaries from over 700 employers around the state; and 8 WHEREAS, through their mission to be the guardian of the State of Georgia's retirement 9 plans, ERSGA employees strive to best serve the retirement needs of current and retired state 10 employees; and 11 WHEREAS, ERSGA demonstrates an unwavering commitment to integrity, operational 12 excellence, and customer service to deliver accurate and timely retirement benefits; and 13 WHEREAS, ERSGA also demonstrates leadership with legislative issues, continuous 14 improvement through the areas of data security and communications, and innovation with 15 process improvements to best serve the retirement needs of current and future members; and 16 WHEREAS, ERSGA promotes retirement education to enhance the lives of Georgia's 17 dedicated state employees and to promote a dignified retirement for members, retirees, and 18 their beneficiaries; and 19 WHEREAS, this remarkable organization has established a glowing reputation of renown 20 throughout Georgia for its ability to accommodate changes in retirement service, and it 21 continues to meet the diversified needs of its members with efficient and professional 22 service; and 23 WHEREAS, it is abundantly fitting and proper that the outstanding accomplishments of this 24 extraordinary organization be appropriately recognized. 25 NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES that 26 the members of this body recognize and commend the Employees' Retirement System of 27 Georgia on the grand occasion of its 70th anniversary. 28 BE IT FURTHER RESOLVED that the Clerk of the House of Representatives is authorized 29 and directed to make an appropriate copy of this resolution available for distribution to the 30 Employees' Retirement System of Georgia. 168 Appendix Senate Resolution 760 By: Senators Black of the 8th, Robertson of the 29th, Hufstetler of the 52nd, Rhett of the 33rd and Henson of the 41st A RESOLUTION 1 Recognizing and commending the Employees' Retirement System of Georgia on the grand 2 occasion of its 70th anniversary; and for other purposes. 3 WHEREAS, the Employees' Retirement System of Georgia (ERSGA) was established on 4 January 1, 1950, by an Act of the Georgia General Assembly to provide retirement benefits 5 for all state employees and is governed by a seven-member board of trustees; and 6 WHEREAS, as of January 2020, ERSGA pension plans serve over 108,000 active members 7 and 72,000 retirees and beneficiaries from over 700 employers around the state; and 8 WHEREAS, through their mission to be the guardian of the State of Georgia's retirement 9 plans, ERSGA employees strive to best serve the retirement needs of current and retired state 10 employees; and 11 WHEREAS, this distinguished organization demonstrates an unwavering commitment to 12 integrity, operational excellence, and customer service to deliver accurate and timely 13 retirement benefits; and 14 WHEREAS, ERSGA also demonstrates leadership with legislative issues, continuous 15 improvement through the areas of data security and communications, and innovation with 16 process improvements to best serve the retirement needs of current and future members; and 17 WHEREAS, ERSGA promotes retirement education to enhance the lives of Georgia's 18 dedicated state employees and to promote a dignified retirement for members, retirees, and 19 their beneficiaries; and 20 WHEREAS, it is abundantly fitting and proper that the outstanding accomplishments of this 21 organization be appropriately recognized. 22 NOW, THEREFORE, BE IT RESOLVED BY THE SENATE that the members of this body 23 recognize and commend the Employees' Retirement System of Georgia on the grand 24 occasion of its 70th anniversary. 25 BE IT FURTHER RESOLVED that the Secretary of the Senate is authorized and directed 26 to make an appropriate copy of this resolution available for distribution to the Employees' 27 Retirement System of Georgia. 169 Appendix Congratulations from Our Members and Retirees! "Happy Birthday! You guys have a big, and often thankless, job. I can only say that while I was working you were very positive and helpful when I called you with questions. Now that I am retired I get the same friendliness and helpfulness. Y'all are good people, competent people, and deserving of accolades. It just occurred to me that your 70th year is also my 70th year (born 10-04-50). I never confess that (except my barber). I only confess to 29 of those years. Last year my son sent me a "Happy 50th anniversary of your 29th birthday" card. Again, I say "Thank you." You guys are great." - cwalters150 "Congratulations!!" - Mary C. "Congratulations!! 70 years is a long time for good service. Please continue making our retirement a pleasant transition. God Bless You." - Sandra "Thank you for all that is being done to protect our retirement!" - Dee Dee R. "CONGRATULATIONS!!! And thank you for your service to to the State Retirees." - Bernice B., December 1, 2000 Retiree "I retired from the Department of Family and Children Services in 2004. I am thankful everyday for my retirement benefits and the guardians of ERSGA." - Gratefully, Doris B. "Thank you for having employees that are very helpful when I have a question. Keep up the great work." - A retiree. Dale H. "Great results & good communications. Appreciated the recent COLA bonus. Thanks!" - Carl E. "Happy 70th Birthday!!" - Larry S. "Congrats to ERSGA for 70 Years for us Current Retires. I am thankful for having retired on May, 2001. I worked for the State of Georgia for 32 years and 7 months. I am a pride retiree and so congratulations again. Please continue with the great work for our future retirees." - Josephine S. of Americus, Georgia. 170 Appendix State Charitable Contributions Program (SCCP) Awards 171