FINANCIAL SECTION

Required Supplementary Information

Schedules of Funding Progress
Expressing the net assets available for benefits as a percentage of the actuarial accrued liability provides one indication
of the System’s funding status. Analysis of this percentage over time indicates whether the System is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the System. Trends in unfunded
actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the underfunded or
overfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of
inflation and aids analysis of progress made in accumulating sufficient assets to pay benefits when due. Generally, the
smaller this percentage, the stronger the System.

Pension Benefits ($ in millions)

Actuarial Unfunded
Valuation Actuarial Accrued (Overfunded)
Date Value of Liability Accrued Liability Funded Covered UAAL as a %
Sept 30 Assets (AAL) Entry Age (UAAL) Ratio Payroll of Covered Payroll
(a) (b) (b-a) (a/b) (c) ((b-a)/c)

1999 $ 34,095 $ 34,348 $ 253 99.3 % $ 8,644 2.9 %

2000 36,893 37,139 246 99.3 8,985 2.7
2001 38,399 39,774 1,375 96.5 9,264 14.8
2002 38,382 41,957 3,575 91.5 9,707 36.8
2003 38,726 44,769 6,043 86.5 10,044 60.2
1
2004 38,784 46,317 7,533 83.7 10,407 72.4
2005 38,211 48,206 9,995 79.3 10,206 97.9
2006 39,893 49,136 9,243 81.2 9,806 94.3
2
2006 42,995 49,136 6,141 87.5 9,806 62.6
2007 45,335 51,107 5,771 88.7 9,851 58.6
2008 45,677 53,555 7,878 85.3 9,958 79.1
3
2008 45,677 54,608 8,931 83.6 9,958 89.7
2009 34,398 54,608 20,110 63.0 9,958 202.9
1
Revised actuarial assumptions
2
Revised asset valuation method
3
Revised benefit provisions

Other Postemployment Benefits ($ in millions)

Actuarial Unfunded
Valuation Actuarial Accrued (Overfunded)
Date Value of Liability Accrued Liability Funded Covered UAAL as a %
Sept 30 Assets (AAL) Entry Age (UAAL) Ratio Payroll of Covered Payroll
(a) (b) (b-a) (a/b) (c) ((b-a)/c)

2006 $ 630 $ 25,387 $ 24,757 2.5 % $ 9,806 252.5 %

2007 776 25,733 24,957 3.0 9,851 253.3
2008 832 26,811 25,979 3.1 9,958 260.9

Add this to the above unfunded liability and the total is $46.1 billion - that's larger than
the entire state budget.

46 • MICHIGAN PUBLIC SCHOOL EMPLOYEES’ RETIREMENT SYSTEM