Contents

• Introduction
  
• Concepts and Terminology
  
• Sources of Data and Limitations
  
• Table Descriptions
  
1. Table 1
2. Table 2
3. Table 3

Introduction

Finances of Selected Public Employee Retirement Systems is a quarterly survey that has been conducted continuously since 1968.  This report shows trends over the past five years, by quarter, in the revenues, expenditures, and composition of assets in the largest public employee retirement systems.

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Concepts and Terminology

There are three sources of receipts for retirement systems:  contributions from employees, contributions from governments, and earnings on investments.  The investment earnings reflect the net profit on investment transactions.  This is a calculated statistic.  It includes the gain on sale of investments, interest and dividends, less the losses on sale of investments.  During periods of declining earnings on investments, total earnings may be negative.

The two types of expenditures are benefits paid and withdrawals.  The benefit payments reflect the continuing periodic outlays of the systems to eligible recipients.  The withdrawals are usually one-time payments that include the return of contributions made by employees during the period of their employment, accrued interest, and, in some instances, a portion of employer contributions.

Asset data often hold the greatest interest relative to other financial information on retirement systems because of the potential importance to financial markets.  The asset data show amounts held in various types of securities such as stocks, bonds, Federal notes and mortgages.  Prior to 2003, we requested data on the value of investments at face or purchase value.  In the limited number of cases where this type of valuation was unavailable, we used market value.  Starting with the first quarter of 2003, a General Accounting Standards Board (GASB) format will be used in which the market value of assets, as opposed to book values, will be collected.   Please note that this leads to a "disconnect" in the time series for this survey.

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Sources of Data and Limitations

This survey covers only public employee retirement systems that are administered by State and local governments.  Public employee retirement systems must meet two criteria: (1) they are sponsored by a recognized unit of government as defined by the Bureau of the Census; and (2) their membership must be comprised of public employees compensated with public funds.

The statistics in these tables are based on a quarterly survey that covers 100 public employee retirement systems in the United States with among the largest amount of cash and security holdings.  Usable replies are received each quarter from 50 to 55 percent of the systems canvassed.  Imputations are developed for each of the remaining systems in the panel from the latest available data.  The "response rate" for any given quarter rises in subsequent quarters as nonrespondent systems provide data that were previously unavailable.  Within a year, the "response rate" for a quarter usually reaches about 60 to 65 percent.  The tables reflect updated information as revisions (r) when we replace estimated data with actual responses.

Statistics in these tables include some "imputed" data for retirement systems that do not respond to the survey.  Imputed data for the quarter are based upon the most recent fiscal year report of the nonresponding unit.  For variables that comprise receipts and expenditures, the imputed data generally reflect one fourth of the fiscal year (annualized) amount.  For asset holdings, the imputed data reflect reported fiscal year amounts with a small growth factor.  In this quarterly survey, however, we do not attempt to impute any amounts for two key variables that comprise the calculated statistics "Earnings on Investments".  These variables are "gains" and "losses" on the sale of investments.  As noted above, the amount reported for this calculated measure consists of interest, dividends, gains on the sale of investments, minus any losses on the sale of investments.  Therefore, the "Earnings on Investments" totals in Table 2 include imputed amounts only for interest and dividends, but not for gains or losses on the sale of investments during the quarter.

Data in these tables are subject to possible inaccuracies in classification, response, and processing.  Every effort is made to keep such errors to a minimum through care in examining, editing, and tabulating the data submitted.

It should be noted that some systems report all or part of receipts and expenditures on an "accrued" basis, and in some cases receipts are accrued but expenditures are on a cash basis.  Therefore, the relationship between quarterly revenues and expenditures does not directly tie to an equivalent change in "Cash and security holdings".  However, these differences in the quarterly series will generally be resolved within the fiscal year.

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Table Descriptions

The tables include the current calendar year and the previous five years, by quarter.  The financial data contained include the revenues, expenditures and composition of assets in the largest public employee retirement systems.

1. Table 1

   Table 1 summarizes the cash and security holdings of the survey panel. The detail includes stocks, bonds, government securities, cash and deposits, etc.



2. Table 2

   Table 2 covers the receipts, benefits, and withdrawal payments of the same systems.



3. Table 3

   Table 3 displays the percent distribution of summarized cash and security holdings shown in Table 1.

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