Government EMPLOYEES’ RETIREMENT SYSTEM OF THE VIRGIN ISLANDS

ANNUAL OVERVIEW OF OPERATIONS



FISCAL YEAR



OZ



Presented to

Committee on Finance

oy! Legislature of the United States Virgin Islands



Earl B. Ottley Legislative Hall

Monday, August 16, 2021

St. Thomas, U.S. Virgin Islands



"Contributing today for a better tomorrow"

Government Employees’ Retirement System August 16, 2021

Overview of Operations



GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM



OVERVIEW OF OPERATIONS

TABLE OF CONTENTS

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Government Employees’ Retirement System August 16, 2021

Overview of Operations



INTRODUCTION



Good afternoon Honorable Senator Kurt A. Vialet, Chairman, Committee on Finance,

distinguished Committee members, other distinguished senators present in the chambers, and

good afternoon to the listening and viewing audience. I am, Austin L. Nibbs, Administrator of

the Government Employees’ Retirement System of the Virgin Islands (GERS). I am pleased to

appear before this Committee to present the System’s Annual Overview of Operations. As you

know, the System is not required to submit a budget to the Legislature for approval. The Board

of Trustees is responsible for the approval of the annual budget of the GERS. Therefore, our

presentation is an overview of the operations of GERS. However, we will respond to any

questions posed by the committee relating to budgetary information submitted to the Post Audit

Division. We would like to place on record that the GERS fiscal year 2022 budget has not yet

been approved by the Board of Trustees.



Before we begin, I would also like to thank the employees of the GERS for their continued

quality services that they have provided to our members during the pandemic period.



Enacted on June 24, 1959, by the Third Legislature of the Virgin Islands by Act 479, the GERS

Fund was officially opened on October |, 1959, as a defined benefit plan. The statute that

governs the operations of the GERS is Title 3, Chapter 27 and 28 of the Virgin Islands Code.

Employees are enrolled into the System the first day of service, as a condition of their

employment. The objective is to encourage employees who enter the System to remain in the



service of the Government by establishing an orderly means whereby those members who



became superannuated or incapacitated as a result of disability may retire without suffering

economic hardship. For this System to continue to meet its statutory obligations to its members,



the System must be actuarially funded. On October 1, 2021, the GERS will celebrate its 62"



anniversary.

Government Employees’ Retirement System August 16, 2021

Overview of Operations



FUNDING



In a report dated December 24, 1959, which was prepared by Public Administration Service titled

An Evaluation of the Obligations of the Employees’ Retirement System of the Government of

the Virgin Islands stated, “ In any discussion of financing a retirement system, the term

actuarially sound or actuarial soundness are frequently used. The terms relate to the ability of a

retirement system to pay out the benefits that are promised”.



Many definitions of actuarial soundness exist. One definition is that the retirement system is

actuarially sound if sufficient assets are on hand to provide for all future benefits for those

currently on the pension roll without consideration of the accrued pension credits of the

participants in active service. Another definition is that a system is actuarially sound if the

accumulated assets are sufficient to meet all accrued benefits, including those for retired

members and active members.



This latter definition contemplates full funding. Still another definition which is somewhat less

stringent is that a system is actuarially sound if the accrued liabilities for both retired members

and active members are balanced by the amount of the present and prospective assets of the

System.



In a GFOA (Government Financial Officers Association) article titled “Sustainable Funding

Practices for Defined Benefit (DB) Pensions and Other Postemployment Benefits” (OPEB), the

GFOA recommended that government officials should ensure that the costs of DB pensions and

OPEB are properly measured and reported. Sustainability requires governments that sponsor or



participate in DB pension plans, or that offer OPEB, to contribute the fu// amount of their

Government Employees’ Retirement System August 16, 2021

Overview of Operations



actuarially determined contribution (ADC) each year. Failure to fund the ADC, previously

identified as ADEC, during recessionary periods impairs investment returns by providing

inadequate funds to invest when stock prices are low. As a result, the long-term investment

performance will suffer and ultimately require higher contributions. Based on the October 1,

2020, actuarial valuation results for the GERS pension plan, the ADC as a percentage of payroll

is 90.8 percent. The GERS plan sponsors currently pay 23.5 percent of payroll. GFOA’s number

| best practice for sustaining DB pension plans is to adopt a funding policy with a target funded

ratio of 100 percent or more (full funding). |n another study by Rebecca A. Sielman, principal

and consulting actuary at Milliman and the author of the Milliman 100 Public Pension Funding

index, “of the 100 plans measured by the index, 39 plans had funding ratios above 90%, while 17

plans remained below 60% funded. A total of 9 plans had ratios between 60% and 70%, 14 plans

were between 70% and 80%, and 21 plans were between 80% and 90%”.



Based on the October |, 2020, actuarial valuation results, the funded percentage for the GERS

pension plan, using the current valuation interest rate of 4.0 percent is 11.4 percent. Using the

GASB accounting blended rate of 2.23 percent, the funded percentage is 9.1 percent. The Actuarial

Accrued Liability (AAL) is $5.1 billion, and the Unfunded Actuarial Accrued Liability (UAAL)

is $4.5 billion. See Exhibit A.



Whenever we have appeared before the Committee on Finance, we have always highlighted



the deteriorating condition of the System. The message remains unchanged. Based on the current

funding of the System, the System will become insolvent by October 2024, or sooner



depending on market conditions, or if nothing is done to fund the System on an actuarial reserve

Government Employees’ Retirement System August 16, 2021

Overview of Operations



basis. As of June 30, 2021, the market value of the System’s total assets was $491.1 million of

which $385.8 million are liquid assets. Between October |, 2020, to present, the System withdrew



$94 million to pay benefits and expenses. There are no additional funding sources. Based on the

current withdrawals from the portfolio, the liquid assets will be depleted in the next 3 years. At

which time, the System will be insolvent and will not be able to provide the required level of



benefits promised to the retirees and active members.



MEMBERSHIP AND ANNUITY PAYMENTS



As of the July 30, 2021 payroll, the GERS paid benefits to 8,685 retirees and beneficiaries. The

number of retirees added to the payroll from October 1, 2020 — July 30, 2021, was 264. The

number of retirees removed from the payroll for the same period was 278.



The average monthly amount that was paid in benefits to the retirees and beneficiaries as of July

30, 2021, was $21.6 million. The total amount paid in benefits from October |, 2020 — July 30,

2021 was $214,988,961.68.



The active membership as of July 30, 2021, was approximately 8,847 (central government 6,234



and semi-autonomous agencies 2,613). There is a 1.02 ratio between the actives and the retirees.



UNFUNDED LIABILITY (EMPLOYER’S NET PENSION LIABILITY) — EXHIBIT A

The information that is presented below represents the results of the Actuarial Valuation as



of October |, 2020. For this period, GERS had a Total Actuarial Accrued Liability of $5.11

billion. Plan Assets totaled $580 million, and the Unfunded Liability was $4.53 billion.



This resulted in a funded ratio of 11.4 percent on an ongoing actuarial basis. The GERS is



projected to fully deplete its assets by October 2024, or sooner depending on the market.

Government Employees’ Retirement System August 16, 2021

Overview of Operations



TOTAL CONTRIBUTIONS RECEIVED VS BENEFIT PAYMENTS AND EXPENSES

Beginning in 1996, there was an imbalance between contributions collected and benefit



payments and expenses resulting in a negative variance of $1.6 million. Each year thereafter,

contributions collected have been less than the benefit payments and expenses. For the past 5



fiscal years, the negative variances between the audited total contributions collected and the benefit



payments and expenses are as follows:



Total Benefit Payments

FY Contributions and Expenses Variance

2016 $ 127.8 $ 274.2 ($ 146.4)

2017 $ 132.7 $ 274.5 ($ 141.8)

2018 $ 141.2 $ 279.8 ($ 138.6)

2019 $ 135.1 $ 286.2 ($ 151.1)

2020 $ 151.3 $ 280.3 ($ 129.0)



For the past 9 months ending June 30, 2021, the GERS collected $109.3 million in total

contributions and paid out $209.8 million in benefit payments and expenses. A negative

variance of $100.5 million between total contributions collected and benefit payments and



expenses.



ACTUARIALLY DETERMINED EMPLOYER CONTRIBUTIONS (ADEC) DUE -

EXHIBIT B



The ADEC now referred to as ADC (Actuarially Determined Contribution) is $373.7 million



or 90.8 percent of pay for the October |, 2020, actuarial valuation period. At the employer



rate at that time of 23.5 percent of pay, there is a projected deficit of 67.1 percent of pay



between the ADC and the projected employer contributions. As presented in Exhibit B, the ADC

due from 1991 to 2020 shows that the Plan Sponsor owes the System approximately $2.5 billion



(inclusive of 6 percent loss investment).

Government Employees’ Retirement System August 16, 2021

Overview of Operations



COURT RULINGS RELATED TO EMPLOYER CONTRIBUTIONS



In September 2016, the GERS filed a Motion to Show Cause, stemming from the GVI’s



failure and refusal to comply with the Consent Judgment entered on December 10, 1984, as

modified on April 22, 1994. In an April 3, 2020 Order, former District Court Judge Gomez

ruled that the Actuarially Determined Employer Contributions (ADEC) was not part of the

Consent Judgment.



In the April 3, 2020 Order, former District Court Judge Curtis Gomez found the following:



1). The Government breached the Consent Decree by not paying fixed rate employer

contributions required under 3 V.I.C. §718(g) in the amount of $13.9 million for the period of

January 1, 1991, through December 31, 2009.



2). The Government breached the Consent Decree by not paying fixed rate employer

contributions required under 3 V.I.C. §718(g) in the amount of $5 million for the period of

January 1, 2010, through December 31, 2018.



3). The Government is liable for statutory interest and penalties in the amount of $6.1 million for

the period of 2010-2018 and $43.2 million for the 1991-2009 period.



The Court Order required the GVI to pay GERS $63.1 million in seven (7) equal installments

payments beginning in May 2020. This sum was consistent with GERS’s and RSM’s (Court

appointed consultant) findings.



On April 8, 2020, the Board of Trustees voted to proceed with an appeal of the ADEC portion of

the decision to the U.S. Court of Appeals for the Third Circuit and to initiate a separate

enforcement action in the V.I. Superior Court to enforce the provisions of 3 VIC 718(f) and 3 VIC

718a. The GERS filed its Notice of Cross Appeal on April 8, 2020.



The GVI filed a Notice of Appeal on April 7, 2020, with the U.S. Court of Appeals for the Third



Circuit. The GERS filed a Notice of Cross Appeal on April 8, 2020.

Government Employees’ Retirement System August 16, 2021

Overview of Operations



The majority opinion from Justices Smith and Chagares affirmed the district court’s award of

principal but concluded that the district court “erred when it enhanced the award by applying late-

arriving interest and penalty statutes retroactively, and remanded with instructions for the District

Court to reduce its award accordingly. Therefore, the ruling preserved an award of $18.9 million

in principal and $6.1 million in interest and fees. Additionally, the majority opined that there was

no compelling interpretation of the statute or any extrinsic evidence that can support reading into

Virgin Islands law GERS’s proffered ADEC obligation.



Justice Matey (the sole dissenting opinion) dissented solely on the issue of the meaning of Section 718(f),

where he agreed with the GERS’ interpretation of the consent decree and Section 718(f) covered the

ADEC. Justice Matey began by describing the enormity of the issue stating that “Economists glumly

estimate that state pensions combined hold unfunded liabilities between $700 billion and $4.6 trillion.”

He stated that this is not a problem specific to the Virgin Islands and GERS.” Justice Matey also analyzed

Section 718(f), consistent with the GERS’ understanding and the last antecedent rule, as applying a

different and additional contribution requirement.



On June 2021, the GERS filed an action for declaratory, supplemental relief, and injunctive relief

in the Superior Court of the Virgin Islands. The GERS alleged the following:



|. That since its inception in 1959, the GVI has been required to finance the cost of GERS in

accordance with actuarial reserve requirements as set forth 3 V.I.C. §718(a):



2.Since its inception in 1959, the obligations of GERS have been obligations of the GVI and the GVI

has a fiduciary duty to the participants of the GERS to ensure the ability of GERS to timely deliver

annuity benefits as provided in 3 V.I.C. § 720.



3. Almost since GERS’ inception, actuaries have warned that the fixed rate contributions were

inadequate to maintain the actuarial reserve required by §718(a):;



4. The yearly actuarial valuation has been provided to the GVI and the GVI has declined or refused

Government Employees’ Retirement System August 16, 2021

Overview of Operations



to pay the contribution due under §718(f).



5. The GVI’s refusal to pay the actuarially required contribution combined with the loss of

investment opportunity on that contribution, has caused GERS’ assets to precipitously decline to the

point where GERS will become insolvent sometime in 2023.



When the remaining assets of GERS are depleted, the sole income received by GERS will be the

fixed rate employee and employer contributions provided for in 3 V.I.C. § 718(b) and (g),

respectively, requiring a reduction in monthly to current retirees of approximately 50% or more of

current benefit payments.



As relief, an injunction requiring the GVI to sequester the required annual contribution as a first

dollar obligation from the annual budget as adopted by the Legislature; to declare and construe



the statutory right of GERS for full payment of the contribution necessary to maintain an adequate

actuarial reserve, or in the alternative require the GVI to tender to GERS the full amount of the



retiree payroll; and to accelerate this matter on the Court’s docket.



EMPLOYER CONTRIBUTIONS DUE FROM CENTRAL GOVERNMENT-EXHIBIT C

In the analysis presented in Exhibit C, the central government owes the GERS $30,982,152.



1). Third Circuit Court award of $13,860,879 for 1991-2009 contributions.



2). Interest and penalties for the period 2010-2018 of $6,121,273.



3). Direct contribution payments (Act No. 8244) for fiscal years 2020 and 2021 in the amount of

$11,000,000.



ACT NO. 8383 (BILL NO. 33-0418)



On September 29, 2020, the 33 Legislature passed Act No. 8383 and it was approved by Governor

Albert Bryan, Jr. on October 20, 2020. The Act provided for the remitter of an amount not exceeding

50 percent of the revenues realized in excess of the funds appropriated by the Legislature of the



Virgin Islands for the operations of the Government of the Virgin Islands in the fiscal year ending

Government Employees’ Retirement System August 16, 2021

Overview of Operations



September 30, 2020, and an amount not exceeding $50,000,000 to be remitted to the GERS, in the

fiscal year ending September 30, 2021, from General Fund revenues realized in excess of the funds

appropriated by the Legislature of the Virgin Islands for the operation of the Government of



the Virgin Islands, to be used by the GERS exclusively for-retirement annuity payments for the fiscal

year ending September 30, 2021.



The GERS is awaiting a response from the Commissioner of Finance for an accounting for fiscal

year ending September 30, 2020. It was reported publicly that approximately $5.4 million will

be awarded to the GERS for fiscal year 2020. As reported in the August 12, 2021, V.I. Daily

News, the Office of Management and Budget Director, Jenifer O'Neal, predicted total 2021

gross revenues of $909,023,773, $71 million higher than the legislature appropriation of

$838,933,534. This is good news for the GERS. We are looking forward to an expeditious

accounting after the end of fiscal year 2021, and remittance of an amount not to exceed

$50,000,000 to the GERS in accordance with Section 2 of Act No. 8383.



ASSETS (INCLUDING INVESTMENTS)



The assets of the GERS include the investment portfolio, which is comprised of cash and cash

equivalents, index funds, fixed income, private equity, and other alternative investments,



such as real estate, local investments, and member loans.



PORTFOLIO PERFORMANCE



In fiscal year 2015, the System implemented the Dynamic Asset Allocation strategy which seeks

to maximize the System’s ability to meet benefit obligations by matching horizons of assets and

liabilities. The System, in continuing to de-risk its assets, has liquidated, and reallocated all equity

assets (stock), the last as of early this year, and continues its commitment to a disciplined



investment strategy that would provide a “soft landing” for the System as insolvency nears.

Government Employees’ Retirement System August 16, 2021

Overview of Operations



The investment portfolio is now managed by | active Domestic Fixed Income manager, | passive

index Domestic Fixed Income manager, and | Private Equity (non-local) manager.



The total market value of the portfolio, as of June 30, 2021, was $491.1 million. The total market

value includes marketable securities including cash & cash equivalents ($385.8 million), Private

Equity Fund of Funds ($15 million), the Havensight Mall ($41 million), the Member Loans

Program ($28 million), our office complexes ($11.3 million), undeveloped properties on St. Croix

and St. Thomas ($7 million), and an Alternative Investment Program loan project balance

remaining ($3 million). To meet obligations to the retirees for benefit payments and expenses,

FYTD (October 1, 2020, to present) $94 million, and for the one-year period (July 2020 — June

2021) $124 million were withdrawn from the Fund.



The Fund earned income of $3.0 million and had a gain of $12.4 million for the fiscal year-to-date.

The System’s aggregate performance as of June 30, 2021, fiscal year-to-date was 3.0 percent,

which outperformed the Barclays US Aggregate Index for the same period. Over the one-year

period, the plan returned 5.1 percent, Equity returned 27 percent, Fixed Income returned 0.1

percent, and Alternatives returned 13.1 percent. Since inception, the plan has returned 8.6 percent.

HISTORICAL MARKET RATES OF RETURN



Over the past 20 years, the market rates of return have been positive 16 out of 20 years (See

Exhibit D). In many of the years, the returns were well above the GERS’ assumed rate of



return of 8 percent and 7 percent, and as high as:



2003 - 17.6 percent



2004 - 10.6 percent



2005 - 11.8 percent



2007 - 14.1 percent



2012 - 14.5 percent



2013 - 9.1 percent



2017 - 11.2 percent



The negative returns were as a result of market conditions in 2001 and 2002, 2008 and 2015.



11

Government Employees’ Retirement System August 16, 2021

Overview of Operations



When compared to its peers of the same size, to include the value of its assets and its portfolio,



the GERS’s performance is in line with or above that of its peers.



ALTERNATIVE INVESTMENT PROGRAM



Title 3, Section 12, Chapter 27 of the Virgin Islands Code gives the Board of Trustees the

authorization to invest in an Alternative Investment Program (AIP). Alternative investments are

private market (non-publicly. traded) investments in domestic and international venture capital and

special equity; simply any investments other than the traditional equity and bonds.



The AIP was designed to enhance the total Fund performance by generating a long-term rate of

return greater than the Fund’s assumed actuarial rate of 7.0 percent. On January 23, 2014, the

Board approved a rate of no less than 10 percent effective January |, 2014, for all alternative /ocal

investments. Shortly thereafter, the Board suspended the AIP. Currently, the GERS has three types



of alternative investments: private equity, real estate, and member loans.



At July 31, 2021, the portfolio for Alternative Investment Program consisted of:

Private Equity



e Mesirow Financial Private Equity Fund (Limited Partnership)

Real Estate



e GERS Office Complexes on St. Thomas and St. Croix



e Undeveloped Land (Estates Hoffman/Nullyberg on St. Thomas and Estate Coakley Bay on

St. Croix)



e Havensight Shopping Mall — St. Thomas

Member Loans (Personal and Mortgages) — Territory-wide

ACTUARIAL VALUATION

Title 3, Chapter 27, Section 718 (a) of the Virgin Islands Code mandates that the Government



Employees’ Retirement System of the Virgin Islands be financed on an “actuarial reserve basis”.



12

Government Employees’ Retirement System August 16, 2021

Overview of Operations



An “actuarial reserve basis” generally means that the retirement benefits are funded during



employee’s active years of employment so that by the time they retire, the benefits would have

been fully funded in advance of their retirement date. The actuarial valuation, which is conducted

by the System’s Actuary, determines the contribution rate necessary to meet the cost of benefits

being accrued and a corresponding amount to pay down a portion of the unfunded liabilities. An

actuarial valuation is performed to calculate the ADC and is based on the assumptions and methods

adopted by the Board. For many years, the actual amounts contributed by the plan sponsors have

not been based on the required ADC amounts. The amounts that were contributed by the Plan

Sponsor have been significantly less than the required ADC. The October |, 2020, actuarial

valuation was received on August 11, 2021. A summary of the results is presented as Exhibit A.

The full report will be provided to all senators and made public this week.



ANNUAL FINANCIAL AUDIT



The System’s fiscal year ending September 30, 2020, annual certified financial audit was issued

on August 13, 2021. We are pleased to announce that the GERS FY 2020 certified financial audit



received an unqualified (clean) opinion. All senators will receive a copy of the report.



NEW STRATEGIC PLAN 2021-2025 in Progress

GERS Renewed: Sustaining and Growing the Future Strategic Plan 2020. A Memorandum of

Agreement has been executed with the University of The Virgin Islands — Center for Excellence,



Leadership and Learning to be the facilitator.



STRATEGIC PLAN FIVE AREAS OF FOCUS (GOALS)

Organizational Development



Cross training and increase training opportunities



Leverage internal talent



Greater use of working teams



Employee engagement / employee activities good faith bargaining

Government Employees’ Retirement System August 16, 2021

Overview of Operations



STAKEHOLDER ENGAGEMENT



Improve customer service and satisfaction



Aggressive media coverage



Increase communication and education to include financial planning and education and wellness



TECHNOLOGICAL AND INFRASTRUCTURAL ADVANCEMENT

Upgrade and strengthen infrastructure



Automate manual processes



Update software and hardware



Migrate to cloud-based solutions



FINANCIAL / FISCAL SUSTAINABILITY AND GROWTH

Consolidate resources

Reduce administrative costs



OPERATIONAL EFFICIENCY AND EXCELLENCE

Initiate cross agency collaboration



Streamline and revamp processes



Enhance member experience



CAPITAL PROJECTS

Improvements to aging infrastructure

Complete hurricane repairs



YEAR TO DATE FISCAL YEAR 2021

MAJOR ACCOMPLISHMENTS



Y Cross trained across the agency to leverage internal talent



V Paid negotiated adjustments to staff



Y Townhall meetings in conjunction with the Strategic Plan



Y Newsletter distribution to members via constant contact



V Partnership with AARP on Financial Wellness seminars



Y Continued to broadcast all board meetings on our YouTube Channel Live

¥ Implemented cloud-based back-up and V3 migration to the cloud



V Upgraded the server infrastructure



V Reduced administrative costs



Y¥ Completed 8 capital projects and hurricane repairs



V Received funding from FEMA for storm damage at GERS complexes and Havensight Mall

V Flexible remote work for employees for pandemic safety



MAJOR FISCAL YEAR 2022 GOALS



Y¥ Complete renovations / upgrades to Havensight due to Hurricanes Irma and Maria

Y Complete capital projects to the GERS headquarters



¥ Make available the Tier II annual statements



Y Continue to increase employee engagement and morale



V Increase cyber security



14

Government Employees’ Retirement System August 16, 2021

Overview of Operations



Y Continue to streamline and automate processes



JV Digitizing the office



¥ Improve on the customer service call center



¥ Submit legislation for consideration



Vv Update GERS website to be more engaging, user friendly and interactive

V Create a GERS update workshop to engage members and the community



CONCLUSION



Mr. Chairman, as we conclude, we invite the Subcommittee on GERS Restructuring, Solvency,

and Economic Development to resume meeting with our team. We have provided a significant

amount of information to include new legislation to make decisions on the sustainability of the

System. This concludes our presentation. We are available to respond to questions that you may



have.



15

EXHIBIT A



Valuation Results as of October 1, 2020



ee



=



$5.11 Billion



Actuarial Accrued Liability (AAL) $5.09 Billion



Actuarial Value of Assets



$0.68 Billion



- $0.58 Billion |



en) ae



Unfunded Actuarial Accrued



$4.41 Billion



$4.53 Billion



Liability



13.3%



11.4%



Funded Percentage



Total Actuarially Determined



$373.7 Million



Employer Contribution (ADEC) :



i tii Million



ee



ADEC as a % of Pay



91.6%



90.8%



=



[he actuarial value of assets is the same as the market value of assets.

—



i



a



a



en



a



—o



=



aes



—



EXHIBIT B



rt



pten



1991



48,659,324



38,169,889



10,489,435



78.44%



1992



48,123,177



34,850,312



13,272,865



72.42%



1993



47,181,730



38,632,619



8,549,111



81.88%



1994



46,856,812



39,353,600



7,503,212



83.99%



1995



92.48%



55,089,820



50,944,748



4,145,072



1996



58,128,608



46,075,378



12,053,230



79.26%



1997



58,251,171



47,703,717



10,547,454



81 89%



1998



73.48%



62,578,121



45,984,661



16,593,460



1999



62,237,129



45,148,387



17,088,742



72.54%



2000



64,992,493



44,078,554



20,913,939



67.82%



2001



64,179,332



43,387,158



20,792,174



67.60%



2002



95,186,021



50,594,531



44,591,490



53.15%



2003



117,124,599



51,588,235



65,536,364



44.05%



2004



108,358,399



54,084,454



54,273,945



49.91%



2005



120,184,848



51,542,030



68,642,818



42.89%



2006



131,059,471



65,061,430



65,998,041



49.64%



2007



137,797,268



60,778,382



77,018,886



44.11%



2008



138,488,871



75,871,146



62,617,725



54.79%



2009



147,490,851



80,177,004



67,313,847



54.36%



2010



157,817,709



77,004,630



80,813,079



48.79%



2011



162,841,336



80,849,762



81,991,574



49.65%



2012



178,644,349



66,677,155



37.32%



111,967,194



2013



172,439,842



64,431,322



108,008,520



37.36%



2014



189,715,251



68,298,617



121,416,634



36.00%



2015



36.13%



200,089,791



72,287,934



127,801,857



2016



247,158,137



86,346,838



160,811,299



34.94%



2017



250,574,023



84,802,335



165,771,688



33.84%



2018



277,523,563



96,748,000



180,775,563



34.86%



2019



365,803,372



106,184,000



259,619,372



29.03%



2020



373,748,689



100,422,000



273,326,689



26.87%



Totals



$



4,188 324,107



$



1,868,078, 828



$



2,320,245,279



6% Loss In



t



~



$



139,214,717



Balance Due



SSE



$



2,459,459 996

EXHIBIT C



EMPLOYER CONTRIBUTIONS DUE FROM CENTRAL GOVERNMENT



District Court Third Circuit

Ruling Awarded

Contributions

1991 - 2009 S 13,860,879 S 13,860,879

Contributions

2010 - 2018 5,000,000 * 5,000,000

Interest & Penalties

1991 - 2009 43,161,534 -

Interest& Penalties

2010 - 2018 6,121,273 6,121,273

Total S 68,143,686 S 24,982,152

Less: GERS Received 2010-2018 5,000,000 * 5,000,000

S 63,143,686 S 19,982,152

Act No. 8244 - FY 2020 1,000,000

Act No. 8244 - FY 2021 10,000,000



Due to GERS $ 30,982,152

EXHIBIT D



Market Rates of Return for the years ended September 30



20.0%



15.0%



10.0%



5.0%



0.0%



-5.0%



10.0%



15.0%



| 2001 | 2002 | 2003 | 2004 | 2005 | | 2006 | 2007



2008 2009



2010 |



2011 2012 2013 2014 2015 | 2016



2017



2018 | 2019 2020



102. 2.9%



8.1% |



rf



15% 14.5% 9.1% | (5.2% 0.5% | 7.7%



8.0%



6.9% | 57% 6.2%



(Market Return -4 9% |-2 1%|17 6% 10.6% 11.8% 7 5% 14.1%



:



‘



|



|



Average Market Rate of Return



Tietie-Waitiead



Dollar-Weighted



SS



SSeS eee



se



CaS E TS



tn rs



ae



2001-2020



-—-



6.0%



5.7%



2009-2020



6.3%



6.2%