Survey of state and local government employee retirement systems.

• Author: Zorn, Paul

This article presents summary statistical analyses of state and local government employee retirement systems surveyes by the Public Pension Coordinating Council (PPCC) in mid-1991. The council is composed of four national associations whose members are directly involved in the administration of public employee retirement systems: the Government Finance Officers Association (GFOA), the National Association of State Retirement Administrators (NASRA), the National Conference on Public Employee Retirement Systems (NCPERS) and the National Council on Teacher Retirement (NCTR).

The purpose of the survey was to obtain in-depth information about the current practices of public employee retirement systems (PERS) with regard to administration, membership, benefits, contributions, funding, investments and reporting. The information collected in the survey is believed to constitute the most detailed single source of data on state and local government retirement systems currently in existence, and a report that summarizes the data has been issued. Since no single report can present all of the different facets of something as complex as a retirement system, the PPCC is making computer disks containing the survey data available so that the systems can conduct their own analyses. The disks are available from the Government Finance Officers Association.

The PPCC survey respondents constitute a diverse group of state and local government employee retirement systems: The 201 systems providing data represent 73 percent of the 11.7 million active members covered by state and local employee retirement systems in the United States and 71 percent of the $808 billion in assets held by these systems. The respondents also represented all of the major geographic regions, types of covered employees and administrating jurisdictions in the United States.

The survey was conducted between May and August 1991, using a questionnaire that was developed by analyzing the surveys conducted by the council's member organizations and combining the questions into the survey document. One of the unique aspects of the PPCC survey design was that it requested separate information about the retirement system and its retirement plans. Since one system may administer several plans, each with its own set of benefits, contributions and liabilities, the questionnaire was divided into two parts: the first part requesting information about the retirement system as a whole and the second part requesting information about each individual plan. The 201 responding systems administer 269 plans. The findings of the analysis, as they pertain to system administration, retirement benefits, actuarial valuations, liabilities, assets, contributions and investments are discussed below.

Administration

State and local retirement systems exist within an administrative framework that is structured by state and local laws and overseen by retirement boards consisting of elected, appointed and ex officio members. State statutes were the basis of governing laws of 78 percent of the systems. In addition, many of the systems were governed by more than one legal source. For example, of the systems administered by local governments, 54 percent were governed both by local ordinances and state statutes.

For most retirement systems, overall management is the responsibility of the system's Retirement Board or Board of Trustees, which is made up of individuals who are either appointed to the position, elected by system members or otherwise designated to serve. Board members make policy decisions within the framework of the system's enabling statutes and usually employ an administrator to carry out the system's day-to-day operations. Ninty-nine percent of the responding systems were governed by retirement boards with substantial authority and responsibilities.

The day-to-day activity of the system is usually directed by an administrator and conducted by staff. System staff are responsible for performing a wide range of duties, including: overseeing the receipt of payments made to the retirement system and ensuring that they are properly...