Transcript Document

Arizona State
Retirement System
Government Finance Officers Association of
Arizona Summer Training
August 7, 2013
0
Arizona State
Retirement System
Discussion Topics
 ASRS Financial Health
 2013 ASRS Legislative Initiatives
 HB 2294: Public pension; court commissioners
1
Arizona State
Retirement System
ASRS Investment Returns
(as of June 30, 2012)
Market
Returns
1 Year
3 Year
5 Year
10 Year
Inception
1.3%
13.2%
1.8%
6.3%
9.8%
July, 2012–
Dec. 31, 2012
6.2%
July, 2012 –
Jan. 7, 2013
7.7%
July, 2012 –
June 30, 2013
11.2% (est.)
2
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
Retirement System
Arizona State
ASRS Investment Returns
40%
30%
20%
10%
8%
0%
-10%
-20%
3
Arizona State
Retirement System
ASRS Investment Asset
Allocation
Investment Category
Policy Target
Policy Range
26%
16-36%
40%
30-50%
18%
8-28%
Private Equity
7%
5-9%
Real Estate
6%
4-8%
Inflation Linked Assets
3%
0-10%
U.S. Fixed Income
Core
24%
High Yield
2%
U.S. Equity
Large Cap
28%
Mid Cap
6%
Small Cap
6%
International Equity
Developed Large Cap
13%
Developed Small Cap
2%
Emerging Markets
3%
Commodities
3%
0-5%
TIPS
0%
0-5%
Risk Parity
0%
0-5%
Absolute Return
0%
0-5%
Opportunistic
0%
0-10%
10%
8-12%
GTAA* (Included in allocation above)
Green: Denotes asset classes typically absent from DC investment options.
4
Arizona State
Retirement System
Distribution of ASRS Pensions
as of June 30, 2012
Average Years
of Service
37.3
40.0
35.6
33.4
33.6
Average Pension
$19,568.00
33.5
32.1
28.3
15.2
5
Arizona State
Retirement System
Defined Benefit Plan
ASRS Defined Benefit Plan
1996 – 2013
Fiscal
Year End
June 30
Market
Return
1996
16.7%
1997
Market
Value of
Assets
Contribution Rate*
Excess
Actuarial
Return
Actuarial
Funded
Status
$13,917.6
8.7%
113.2%
3.36%
Normal
Cost
5.44%
20.6%
$16,397.9
12.6%
117.1%
3.20%
1998
21.3%
$19,390.0
13.3%
120.7%
1999
16.8%
$21,836.4
8.8%
2000
10.0%
$23,187.6
2.0%
2001
(6.7%)
$21,872.9
2002
(8.2%)
2003
2.4%
2004
EE & ER
Contributions
(in millions)
# of New
Retirees
by Year
Avg.
Monthly
Benefit**
$299.7
$536.5
3,845
$ 920
5.20%
$309.4
$580.9
3,578
$ 945
3.05%
5.21%
$321.3
$628.6
3,353
$ 982
116.6%
2.85%
5.24%
$348.0
$678.9
4,380
$1,024
120.4%
2.17%
5.24%
$283.8
$788.6
4,822
$1,125
(14.7%)
115.1%
2.17%
5.48%
$367.2
$920.4
4,224
$1,211
$18,594.9
(16.2 %)
106.4%
2.00%
5.36%
$321.8
$1,029.1
3,954
$1,371
$18,116.8
(5.6%)
98.4%
2.00%
5.88%
$375.5
$1,162.8
5,955
$1,401
17.5%
$20,749.6
9.5%
92.5%
5.20%
5.95%
$866.0
$1,326.4
6,430
$1,487
2005
8.5%
$21,901.0
0.5%
86.1%
5.20%
6.52%
$946.7
$1,510.7
7,005
$1,508
2006
9.8%
$23,641.1
1.8%
84.3%
6.90%
6.51%
$1,265.2
$1,652.6
7,143
$1,566
2007
17.8%
$27,639.0
9.8%
83.2%
8.60%
6.58%
$1,631.2
$1,784.0
7,393
$1,584
2008
(7.5%)
$25,296.1
(15.6%)
82.8%
9.10%
6.71%
$1,805.7
$1,931.1
7,784
$1,596
2009
(18.1%)
$20,403.5
(26.1%)
79.3%
8.95%
6.46%
$1,667.0
$2,012.0
6,615
$1,613
2010
14.6%
$23,142.1
6.6%
76.7%
9.00%
6.49%
$1,702.0
$2,270.0
8,845
$1,619
2011
24.6%
$28,033.3
16.6%
75.8%
9.60%
6.45%
$1,735.2
$2,441.0
8,730
$1,627
2012
1.3%
$27,604.5
(6.7%)
75.8%
10.50%
6.76%
$1,863.9
$2,577.2
9,227
$1,631
(in millions)
Actual
(in millions)
Benefit
Payments
$30,026
2013
11.2%
10.90%
6.82%
* The actual contribution rate is what each active member contributes during a fiscal year. The normal cost rate is what the contribution rate would be
if there was no surplus or deficit to amortize.
** Over the 16-year period, average monthly benefits have increased 77% and the number of members retiring each year has increased by 240%
***Estimated June 30, 2013
6
Arizona State
Retirement System
ASRS Contribution Rates
Pension
LTD
ACR
2012-13
10.90%
0.24%
8.64%
2013-14
11.30%
0.24%
9.20%
7
Arizona State
Retirement System
2013 Legislative Initiatives
 Administration



Federal Conforming Changes – increases the annual limit of retirement benefits;
non-portability of normal retirement benefits; termination or partial termination
of fund would cause full vesting
Amortization Period
Member Identity Security – identifies what data the ASRS will release and what
data won’t be released
 Health Insurance

ASRS Self-insurance – adding language to allow the ASRS to self-insure
 Plan Design

Eliminate PBI for new member
 Survivor Benefits

Non-retired survivor benefit redesign – simplify the non-retired survivor benefit
calculation by eliminating the PV option and allowing a straight life annuity only
8
Arizona State
Retirement System
HB 2294: Public pensions;
court commissioners
 Removes language requiring certain full-time
superior court commissioners to be ASRS members
and reestablishes their eligibility for EORP
9
Arizona State
Retirement System
?
?
?
?
Questions?
?
?
?
?
9