Notes to Basic Financial Statements (continued)
The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:

Summary of Actuarial Assumptions
Valuation Date Actuarial Cost Method Amortization Method - Pension Amortization Method - OPEB Remaining Amortization Period - Pension Remaining Amortization Period - OPEB Asset Valuation Method - Pension Asset Valuation Method - OPEB Actuarial Assumptions: Wage Inflation Rate Investment Rate of Return - Pension - MIP and Basic Plans - Pension Plus Plan Investment Rate of Return - OPEB Projected Salary Increases Cost-of-Living Pension Adjustments Healthcare Cost Trend Rate Other Assumptions OPEB only: Opt Out Assumption 9/30/2010 Entry Age, Normal Level Percent of Payroll, Closed Level Percent of Payroll, Closed 26 years* 26 years 5-Year Smoothed Market Market 3.5% 8.0% 7.0% 4.0% 3.5 - 15.9% 3% Annual Non-Compounded for MIP Members 8.5% Year 1 graded to 3.5% Year 11 21% of eligible participants hired before 7/1/2008 and 30% of those hired after 6/30/2008 are assumed to opt out of the retiree health plan 80% of male retirees and 67% of female retirees are assumed to have coverage continuing after the retiree's death 75% of male and 60% of female future retirees are assumed to elect coverage for 1 or more dependents

Survivor Coverage

Coverage Election at Retirement

*Based on the provisions of GASB Statement Nos. 25, 43 and 45 when the actuarial accrued liability for a defined benefit pension plan is underfunded or overfunded, the difference should be amortized over a period not to exceed thirty years for the fiscal periods beginning on or after June 15, 2006.

Investment Authority Under Public Act 380 of 1965, as amended, the authority for the purchase and the sale of investments resides with the State Treasurer. Investments are made subject to the Public Employee Retirement System Investment Act, Public Act 314 of 1965, as amended. The Public Employee Retirement System Investment Act authorizes, with certain restrictions, the investment of pension fund assets in stocks, corporate and government bonds and notes, mortgages, real estate, and certain short-term and alternative investments. Investments must be made for the exclusive purposes of providing benefits to active members, retired members and beneficiaries, and for defraying the expenses of investing the assets. Under Public Act 314 of 1965, as amended, the State Treasurer may invest up to 5% of the System’s assets in small businesses having more than one-half of assets or employees in Michigan as described in section 20(a) of the Act and up to 20% of the System’s assets in investments not otherwise qualified under the Act as described in section 20(d).


Sign up to vote on this title
UsefulNot useful