Oklahoma a Century of Exploration 1907 2007
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Oklahoma A Century of Exploration 1907 2007 Oklahoma Public Employees Retirement System A COMPONENT UNIT OF THE STATE OF OKLAHOMA Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2007 Oklahoma A Century of Exploration This report contains six sections, each with a cover image depicting Oklahoma’s rich history of exploration and discovery. The historical aspects of this report were conceived to celebrate our state’s Centennial and pay tribute to a few of the people and events that have helped shape Oklahoma’s past, present and future. Oklahoma has survived several tragic events that will never be forgotten. The displacement of our American Indian tribes, the Dust Bowl drought, the untimely passing of Will Rogers and Wiley Post, and the Oklahoma City bombing were all events that tested the resolve of our people; yet, Oklahomans have always found the courage and strength of character to emerge from adversity to overcome these trials through faith, hard work, and good humor. On the cover - The Guardian statue was placed atop the dome of the Oklahoma State Capitol on June 7, 2002. Sculpted by Enoch Kelly Haney, Principal Chief of the Seminole Nation and former Oklahoma State Senator, the Guardian represents the significance of Native American history and culture to our state by depicting a proud Native American warrior. The artist feels that the statue represents ideas found in all cultures. “The image is of standing one’s ground. I feel it embodies values shared by all Oklahomans. It represents the deep love of family and home we all share, and the desire to protect them.” Cover photo courtesy of Hugh Scott Photography Oklahoma A Century of Exploration 1907 2007 Oklahoma Public Employees Retirement System A COMPONENT UNIT OF THE STATE OF OKLAHOMA Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2007 Prepared by the staff of the Oklahoma Public Employees Retirement System. This publication, printed by University Printing Services, is issued by the Oklahoma Public Employees Retirement System as authorized by its Executive Director. One thousand one hundred copies have been prepared and distributed at a cost of $5,785.00. Twenty-five copies have been deposited with the Publications Clearinghouse of the Oklahoma Department of Libraries. This page left intentionally blank. Table of Contents Introductory Section Letter of Transmittal ......................................................................................................................................1 Chairman’s Letter ...........................................................................................................................................5 Board of Trustees ...........................................................................................................................................6 Organizational Structure ................................................................................................................................7 Advisors and Consultants ..............................................................................................................................7 Certificate of Achievement for Excellence in Financial Reporting ...............................................................8 Financial Section Independent Auditors’ Report ....................................................................................................................... 9 Management’s Discussion and Analysis ......................................................................................................10 Financial Statements: Statements of Plan Net Assets ..................................................................................................18 Statements of Changes in Plan Net Assets ...............................................................................19 Notes to Financial Statements ..................................................................................................20 Required Supplementary Information: Schedule of Funding Progress - Schedule 1 ............................................................................40 Schedule of Employer Contributions - Schedule 1 ..................................................................40 Note to Schedule 1 Required Supplementary Information ......................................................41 Supplementary Information: Schedule of Investment Expenses - Schedule 2 .......................................................................43 Schedule of Administrative Expenses - Schedule 3 .................................................................44 Schedule of Professional/Consultant Fees - Schedule 4 ..........................................................45 Investment Section Investment Consultant’s Report ...................................................................................................................47 Chief Investment Officer’s Report ...............................................................................................................50 Largest Holdings ..........................................................................................................................................54 Investment Portfolio by Type and Manager .................................................................................................55 Asset Comparison ........................................................................................................................................56 Schedule of Stock Brokerage Commissions Paid ........................................................................................57 Actuarial Section 2007 Certification of Actuarial Valuation ....................................................................................................59 Summary of Principal Valuation Results .....................................................................................................61 Summary of Actuarial Assumptions and Methods .......................................................................................62 Schedule of Active Member Valuation Data ................................................................................................65 Schedule of Retirants, Disabled Retirants and Beneficiaries Added to and Removed from Rolls ..............65 Analysis of Financial Experience ................................................................................................................66 Summary of System Provisions ...................................................................................................................67 Solvency Test ...............................................................................................................................................69 Statistical Section Statistical Section: Narrative Explanation ..................................................................................................71 Schedule of Changes in Net Assets ..............................................................................................................72 Schedule of Revenue by Source ...................................................................................................................73 Schedule of Expenses by Type. ....................................................................................................................73 Schedule of Benefit Payments and Refunds by Type ...................................................................................74 Funded Ratio Chart ......................................................................................................................................74 Rate of Return by Type of Investment .........................................................................................................75 Schedule of Retired Members by Type of Benefit .......................................................................................76 Schedule of Average Benefit Payments........................................................................................................77 Principal Participating Employer .................................................................................................................78 Demographics Chart ....................................................................................................................................78 Participating Employers ...............................................................................................................................79 Member Statistics .........................................................................................................................................81 Summary of Retirees, Beneficiaries, and Disabled Members ......................................................................82 Summary of Terminated Vested Members ...................................................................................................83 Summary of Active Members ......................................................................................................................84 Addendum 2007 Certification of Pro-forma Financial Information ...............................................................................85 Summary of Valuation Results Under Prescribed Assumptions ..................................................................87 This page left intentionally blank. INTRODUCTORY SECTION OKLAHOMA A Century of Exploration 1907 2007 OKLAHOMA A Century of Exploration