DIVISION OF PENSIONS AND BENEFITS · Benefits Processing — TO provide benefits to clients in a...

Our mission is to provide

quality benefits and services

that meet the needs of our clients and others

we are committed to serve,

through our efficient and responsive workforce.

DIVISION OF PENSIONS AND BENEFITS

A Department of the State of New Jersey

COMPREHENSIVE ANNUAL FINANCIAL REPORT

for the Fiscal Year Ended

June 30, 2012

Our Vision . . . WE will achieve client satisfaction through equi-table, effective, responsive service, and clear andaccessible communications that meet the needs ofour clients.

WE will encourage and support an accomplishedworkforce that is knowledgeable, flexible, techni-cally proficient and committed to excellence.

WE will be committed to working with executiveand legislative agencies and governing boards toimprove the design and implementation of thebenefit programs.

WE will support technologies that simplify pro-cedures and improve services, manage ourresources in a responsible and creative manner,and hold contracted service providers to highstandards.

WE will work with participating employers toenhance their role in the administration of bene-fits for their employees through integrated tech-nology that allows them to access and processbenefit information directly.

Our Values . . .WE are customer-focused, recognizing eachclient individually.

WE acknowledge as our greatest asset ourknowledgeable, hardworking, dedicated and car-ing staff.

WE are financially responsible in the administra-tion, oversight, and delivery of our benefit pro-grams.

WE are committed to providing quality, timely,accurate, efficient, and cost effective services.

WE are committed to creating and developing aquality work environment using state-of-the-arttechnologies, and processes that foster continuous

improvement of our organization through team-work, motivation, and communication amongstaff.

Our Goals . . .Customer Service —

TO create and maintain a customer focusedwork environment that anticipates and meetsclient needs.

Staff —

TO have a full complement of staff that iswell trained, undergoes continual develop-ment, and is motivated to provide benefitservices effectively and efficiently in a cus-tomer friendly manner.

Technology —

TO have an integrated, easily maintained andmodified, information processing system thatsupports the efficient and effective delivery ofservices.

Planning —

TO have an effective planning system thatfacilitates improvement, anticipates changeand properly focuses resources on priorities.

Benefits Processing —

TO provide benefits to clients in a timely andefficient manner.

Advocacy —

TO help structure a well-funded system ofbenefits that meets the needs of publicemployees and employers.

Oversight and Compliance —

TO administer programs with clear and con-sistent policies and procedures and provideoversight to safeguard fund assets and ensurebenefit entitlement.

Our Mission . . .To provide quality benefits and services that meet the needsof our clients and others we are committed to serve,through our efficient and responsive workforce.

NEW JERSEY DIVISION OF

PENSIONS AND BENEFITSA DEPARTMENT OF THE STATE OF NEW JERSEY

57th

COMPREHENSIVEANNUAL FINANCIAL REPORTFor the Fiscal Year Ended June 30, 2012

Chris ChristieGovernor

Andrew P. Sidamon-Eristoff Florence J. SheppardState Treasurer Acting Director

STATE OF NEW JERSEYDEPARTMENT OF THE TREASURY

DIVISION OF PENSIONS AND BENEFITSPO BOX 295

TRENTON, NJ 08625-0295 (609) 292-7524

2 New Jersey Division of Pensions and Benefits

Programs administered by the

NEW JERSEY DIVISION OF PENSIONS AND BENEFITSPERS Public Employees' Retirement System

TPAF Teachers' Pension and Annuity Fund

PFRS Police and Firemen's Retirement System

SPRS State Police Retirement System

JRS Judicial Retirement System

DCRP Defined Contribution Retirement Program

ABP Alternate Benefit Program

POPF Prison Officers' Pension Fund

CPFPF Consolidated Police and Firemen's Pension Fund

NJSEDCP NJ State Employees Deferred Compensation Plan

SACT Supplemental Annuity Collective Trust

ACTS Additional Contributions Tax-Sheltered Program

CPF Central Pension Fund

PAF Pension Adjustment Fund

UCTDSE Unemployment Compensation and Temporary Disability for State Employees

SHBP State Health Benefits Program

SEHBP School Employees’ Health Benefits Program

PDP Prescription Drug Plan

EDP Employee Dental Plans

Tax$ave NJ State Employees Tax Savings ProgramPremium Option Plan,

Unreimbursed Medical Flexible Spending Account, and Dependent Care Flexible Spending Account

Commuter Tax$ave State Employees Commuter Tax Savings Program

LTC State Employees Long Term Care Insurance Plan

INDEPENDENT AUDITORCliftonLarsonAllen LLP

309 Fellowship Road, Suite 200Mt. Laurel, NJ 08054

ACTUARIAL REPORTSBUCK CONSULTANTS

500 Plaza DriveSecaucus, NJ 07096-1533

MILLIMAN1550 Liberty Ridge Drive

Suite 200Wayne, PA 19087-5572

INTRODUCTORY SECTION

Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

All in a Year’s Work (Accomplishments in 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Organization — Board of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Significant Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Scope of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

FINANCIAL SECTION

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Basic Financial Statements

Statement of Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Combining Statement of Fiduciary Net Assets — Fiduciary Funds — Pension Trust and State Health Benefit Program Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Statement of Changes in Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Combining Statement of Changes in Fiduciary Net Assets — Fiduciary Funds — Pension Trust and State Health Benefit Program Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Notes to Financial Statements

(1) Description of the Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

(2) Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

(3) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

(4) Securities Lending Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

(5) Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

(6) Vesting and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

(7) Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

(8) Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Schedules

#1 Required Supplementary Information (Unaudited) — Schedule of Funding Progress . . . . . . . 86

#2 Required Supplementary Information (Unaudited) — Schedule of Employer Contributions . . . 91

#3 Schedule of Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

#4 Schedule of Investment Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

#5 Schedule of Expenses for Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

#6 Schedule of Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

#7 Schedule of Changes in Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . 97

New Jersey Division of Pensions and Benefits 3

TABLE OF CONTENTS

#8 Combining Schedule of Balance Sheet Information — Fiduciary Funds — Agency Funds . . . . 98

#9 Schedule of Changes in Fiduciary Net Assets Information — Fiduciary Funds —

Agency Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

#10 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit

Program Fund — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

#11 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health Benefit Program Fund — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

#12 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit

Program Fund — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

#13 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health Benefit

Program Fund — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

#14 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit Program Fund — Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

#15 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health Benefit Program Fund — Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

#16 Combining Schedule of Balance Sheet Information — Agency Fund —

Dental Expense Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

#17 Combining Schedule of Changes in Fiduciary Net Assets Information — Agency Fund —

Dental Expense Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

#18 Schedule of Changes in Assets and Liabilites Information — Agency Fund —

Alternate Benefit Program Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108


Pension Adjustment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109


Dental Expense Program — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110


Dental Expense Program — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111


Dental Expense Program — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

INVESTMENT SECTION

Reviews of Major Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

State Investment Council — Key Regulations Pertaining to Pension Fund Assets . . . . . . . . . . . . . . . . . . 116

Investment Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Actual Allocation vs FY 2012 Investment Plan Target . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

State of New Jersey Composite Asset Allocation History (Graph) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

U.S. Equities — Portfolio Sector Weightings (Graph) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

International Equities Markets — Portfolio Sector Weightings (Graph) . . . . . . . . . . . . . . . . . . . . . . . . . 120

List of Largest Assets Held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121


TABLE OF CONTENTS

Domestic Equity Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

International Equity Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

ACTUARIAL SECTIONPublic Employees’ Retirement System (PERS)

Actuary’s Certification Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Summary of Actuarial Assumptions and Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Schedule of Retired Members and Beneficiaries Added to and Removed from Rolls . . . . . . . . . . . . . . 134

Schedule of Active Member Valuation Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Analysis of Past Financial Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

Summary of Benefit and Contribution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Teachers’ Pension and Annuity Fund of New Jersey (TPAF)Actuary’s Certification Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145




Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Analysis of Financial Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Summary of Principal Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Police and Firemen’s Retirement System (PFRS)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

Analysis of Past Financial Experience — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

Analysis of Past Financial Experience — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174


State Police Retirement System (SPRS)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184




TABLE OF CONTENTS

Judicial Retirement System (JRS)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194



Consolidated Police and Firemen’s Pension Fund (CPFPF)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201



Prison Officers’ Pension Fund (POPF)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207



Supplemental Annuity Collective Trust (SACT)





Solvency Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213




TABLE OF CONTENTS

STATISTICAL SECTION

Schedule of Retired Members By Type of Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Schedule of Revenues By Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

Schedule of Expense By Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

Schedule of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224

Participating County and Municipal Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

Participating Education Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

Participating Agencies and Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

Participating State Departments and Pension Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235


TABLE OF CONTENTS


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INTRODUCTORY SECTION


LETTER OF TRANSMITTAL

February 28, 2013

To the Honorable

Chris Christie, GovernorAndrew P. Sidamon-Eristoff, State Treasurer Members of the Legislature Members of the Boards of Trustees

On behalf of the Division of Pensions and Benefits, I am pleased to submitthe 57th Comprehensive Annual Financial Report (CAFR) of the New JerseyState-administered retirement systems and related benefit programs for thefiscal year ended June 30, 2012. The management of the Division of Pensionsand Benefits (the Division) is responsible for the accuracy of the data andthe completeness and fairness of the presentation. To the best of my knowl-edge and belief, the enclosed information is accurate in all material respectsand is reported in a manner that fairly represents the financial position andresults of the Division’s operations.

STRUCTURE OF THE CAFR

This comprehensive annual financial report is divided into five sections:

• The Introductory Section, which contains this letter of transmittal, theorganization of the Division and Boards of Trustees, an overview of leg-islation enacted during the year covered by the CAFR, and general infor-mation regarding the operations of the Division.

• The Financial Section, which contains the report of the IndependentAuditors and the financial statements, schedules and supplementaryfinancial information regarding funds administered by the Division.

• The Investment Section, which contains information pertaining to themanagement of the investment of the Pension Trust Funds.

• The Actuarial Section, which contains the funds’ Actuary Certification let-ters and information regarding the actuarial assumptions and methodsused to determine the contribution requirements of the Pension TrustFunds.

• The Statistical Section, which contains general statistical informationregarding the programs administered by the Division.

CHRIS CHRISTIEGovernor

ANDREW P. SIDAMON-ERISTOFF

State Treasurer

FLORENCE J. SHEPPARDActing Director, Divisionof Pensions and Benefits

State of New JerseyDEPARTMENT OF THE TREASURY

DIVISION OF PENSIONS AND BENEFITS(609) 292-7524 TDD (609) 292-7718www.state.nj.us/treasury/pensions

Mailing Address:PO Box 295

Trenton, NJ 08625-0295Location:

50 West State StreetTrenton, New Jersey



THE REPORTING ENTITY

The Division was established in 1955 as the Division of Pensions to provide all administration of the state pen-sion funds except investments. The Division changed its name to the Division of Pensions and Benefits in 1992to more accurately reflect its roles and responsibilities beyond the realm of pensions. Currently, the Divisionadministers one of the largest non-federal public benefits program in the nation, consisting of ten separate retire-ment systems, three supplemental retirement savings programs, two health benefits programs for employees,retirees, and family members, and several other employee benefits programs. Over 789,573 members enjoy thebenefits of the various pension systems administered by the Division, and over 863,000 lives are covered in theState Health Benefits Program (SHBP) and the School Employees’ Health Benefits Program (SEHBP). In additionto the State, 1,763 local public employers participate in the retirement systems, and 1,103 local employers par-ticipate in the SHBP and SEHBP.

CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING

The Government Finance Officers Association of the United States and Canada (GFOA) recognized the Division’sCAFR of last year for Excellence in Financial Reporting. A copy of the Certificate of Achievement is included inthis CAFR.

MAJOR INITIATIVES

The impact of major pension and health benefit reform legislation continued to be a significant administrativechallenge for the Division in 2012. The implementation of P.L. 2011, c. 78, enacted just prior to the 2012 fis-cal year, was the Division’s primary focus during the latter part of 2011 into early 2012. The legislation provid-ed for the following increases in the employee contribution rates: from 5.5% to 6.5% in the first year plus anadditional 1% phased-in over 7 years for TPAF and PERS (including legislators, law enforcement officer (LEO)members, and workers compensation judges); from 3% to 12% for JRS phased-in over seven years; from 8.5% to10% for PFRS members and members of PERS Prosecutors Part; and from 7.5% to 9% for SPRS members. Thissweeping reform also included provisions to establish new pension committees in the PERS, TPAF, PFRS, andSPRS, provided for increases in employee contribution rates across all the defined benefit funds, created newmembership tiers for newly enrolling members of the PERS, TPAF and PFRS with different retirement eligibilityrequirements/formulas, changed the methodology for calculating the unfunded accrued liability, and suspendedautomatic additional cost of living adjustments to current and future retirees.

On the health benefits side, Chapter 78 required that all public employees in New Jersey covered by an employ-er-sponsored health plan contribute to the cost of coverage based on their salary and coverage level. In addi-tion, the law established two joint employee-employer plan design committees, one for the State Health BenefitsProgram and one for the School Employees Health Benefits Program, to create cost effective plans as well as ahigh deductible health plan (HDHP). The committees also have sole discretion in establishing copays, coinsur-ance, deductibles and out-of-pocket maximums in the plans.

In other health benefits-related developments, the Division, in cooperation with the Division of Purchase andProperty, initiated a Medical Plan RFP with a contract effective date of January 1, 2013. The RFP was developedduring fiscal 2012 with an award announcement in fiscal 2013. The RFP is for the administration of theSHBP/SEHBP’s PPO, HMO and HDHP plan designs for its 863,000 covered lives. It is estimated that the RFP awardwill result in an estimated $30-$35 million savings in each of the plan years in the four year contract.

In addition, Medicare eligible retirees were transitioned to a new Medicare integration plan effective January 1,2012. The new plan, an Employer Group Waiver Plan (EGWP) plus wrap, replaced the current integration method,Retiree Drug Subsidy (RDS). Federal health care reform resulted in the EGWP plan being more cost effective forthe SHBP/SEHBP and is estimated to save the plans $90M per year over the current RDS integration method.



The Division continues its efforts to provide additional automated and self-service processing opportunities toboth the members and employers of the State-administered retirement systems and health benefit programs. Asa result of new legislation and technology enhancements, the following initiatives were implemented:

Chapter 52 Employer Enrollment Training — The enactment of P.L. 2011, c. 52, established new procedures andonline employer training requirements for the enrollment and/or transfer of employees into the State-adminis-tered retirement systems. The 2012 implementation required changes in the enrollment applications for all pen-sion funds. An online training module was developed for employers to satisfy the mandatory training requirementof the law. An Employer Certification module that would be accessible through the EPIC portal is waiting to bedeployed.

Interactive Voice Response System (IVR) — The existing hardware and software for the IVR was replaced andthe new system shares hardware and software resources with the Department of Labor. The IVR system providesmembers and employers with the ability to obtain pension and health plan information, and process a loan andother transactions over the telephone. As result of a major initiative completed in the summer of 2012, the IVRis now the point of entry for members calling the Division. From there a number of self-service options are avail-able, or, if the member chooses, they will be transferred to the call center to speak with a counselor.

Web Enhancement Project — The WEB Enhancement Project involved two components; 1) an upgrade to theDivision’s static web pages, and 2) an upgrade to the inquiry and transactional web pages of Employer PensionInformation Connection (EPIC) and Member Benefits Online System (MBOS). This project has resulted in theenhancement of 26 sub-application components.

Auto Response System for E-mails — The Division expanded the Siebel automated e-mail response system with87 categories to respond to common questions. As a result, e-mails that require a response from a counselor havedecreased. The business benefit of the auto response system provides that both members and employers receiveimmediate responses to those issues that are routine in nature. Complex inquiries are forwarded to counselors fora more detailed response.

FINANCIAL INFORMATION

The Financial reports of the Fiduciary Funds of the Division have been prepared in conformity with generallyaccepted accounting principles as applied to governmental units. The Governmental Accounting StandardsBoard (GASB) is the accepted standard-setting body for governmental accounting and financial reporting. Thespecific accounting policies can be found in the Notes to the Financial Statements found in the FinancialSection.

The Fiduciary Funds include twelve separate pension trust funds, three health benefit program funds, and threeagency funds. A summary of the condition of the funds administered by the Division of Pensions and Benefitsis located in the “Management Discussion and Analysis” that begins on page 39 of the CAFR. Management isresponsible for establishing and maintaining the accounting systems complete with internal controls so thatthe data presented is complete and fairly presents the financial position of the Division as of June 30, 2012.CliftonLarsonAllen LLP independently audited the funds.

INVESTMENTS

The Division of Investment has the responsibility for investing the assets of the programs administered by theDivision. This is done under the jurisdiction of the State Investment Council. Investments are guided by the “pru-dent person rule”. During FY 2012 investment returns on pension funds were +2.52 percent. When combined withthe returns for previous years, the annualized returns over the past three, five and ten-year periods were +11.11percent, +2.46 percent, and +6.42 percent, respectively.



FUNDING

A fully funded system that has assets sufficient to meet the retirement benefit schedules is one that instills con-fidence and trust. While employer funding obligations have been difficult to meet over the past several yearsdue to conflicting budgetary priorities, the enactment of Chapter 1, P.L. 2010 and Chapter 78, P.L. 2011 havecharted a long term path which is projected to result in improved funded levels over a thirty year period.

PROFESSIONAL SERVICES

The Division contracts with several professional organizations for advice and assistance in administering the pro-grams for which it is responsible. The list of these organizations is found on page 95 of the CAFR. The Office ofthe Attorney General provides all legal services required by the Division of Pensions and Benefits and the retire-ment system Boards of Trustees.

ACKNOWLEDGEMENTS

The preparation of the CAFR required the combined efforts of many employees from different operational unitswithin the Division. The CAFR is intended to provide extensive and reliable information to facilitate informed deci-sions, determine compliance with legal requirements, and determine responsible stewardship for the assets con-tributed by the systems’ members, participating employers, and the taxpayers of the State. I would like to takethis opportunity to express my gratitude to the Governor, the Legislature, the Treasurer, the Boards of Trustees,the individuals providing professional services, participating employer benefits administrators, and to the out-standing employees of the Division for all their efforts and support. Such concerted effort has resulted in mak-ing New Jersey’s public benefits system one of the largest and best administered in the nation.

Respectfully submitted,

Florence J. Sheppard, Acting Director


ALL IN A YEAR’S WORK…• There are 504,791 ACTIVE MEMBERS in the combined retirement systems.

• There are 1,783 PARTICIPATING EMPLOYERS in the combined retirementsystems; 10 NEW EMPLOYERS began participating this year.

• There are 427,118 INDIVIDUAL RETIREMENT SYSTEM MEMBER ACCOUNTSbeing maintained; 7,990 MEMBER ACCOUNTS were audited internally.

• A total of 290,721 RETIREES AND BENEFICIARIES received monthly pen-sions totaling in excess of $8.4 BILLION annually.

• Over 9,020 BENEFICIARY CLAIMS were processed. Premiums in excess of$212 MILLION were paid to the insurance carrier on behalf of active andretired members.

• Over 908,125 TELEPHONE CALLS were received in Client Services.Counselors handled over 234,107 calls; over 815,907 calls were handledby our automated telephone systems.

• 18,723 PERSONAL INTERVIEWS were conducted by pension counselors.

• 11,684 SERVICE PURCHASE REQUESTS were processed.

• 26,402 NEW ENROLLMENTS OR TRANSFERS were processed in our retire-ment systems.

• There were 9,560 WITHDRAWALS from the retirement systems.

• 16,788 MEMBERS RETIRED.

• Over 112,398 PENSION LOANS totaling $553,410,491 were processed.

• State and local membership in the State Health Benefits Program andSchool Employees’ Health Benefits Program was 400,387 MEMBERS with862,247 LIVES COVERED.

• A total of over $5.1 BILLION IN PREMIUMS was collected from State andlocal State Health Benefits Program employers, School Employees’ HealthBenefits Program employers, and combined employees. 1,103 LOCALEMPLOYERS elected to participate in the SHBP or SEHBP this year.


ORGANIZATION

EXECUTIVE MANAGEMENT TEAM

Seated, Front Row (left to right): Susanne Culliton, Assistant Director, Professional Services and Board ofTrustees; Florence J. Sheppard, Acting Director; John D. Megariotis, Deputy Director, FinanceBack Row (left to right): Frank Corliss, Assistant Director, Management Information Systems;

Janice F. Nelson, Assistant Director, Client Services and Benefit Operations; David Pointer, Assistant Director, Health Benefits and Publications

JOHN D. MEGARIOTIS

DEPUTY DIRECTOR

FINANCE

SUSANNE CULLITON

ASSISTANT DIRECTOR

PROFESSIONALSERVICES

& BOARD OF TRUSTEES

FRANK CORLISS

ASSISTANT DIRECTOR

MANAGEMENTINFORMATION SYSTEMS

DAVID POINTER

ASSISTANT DIRECTOR

HEALTH BENEFITS AND PUBLICATIONS

JANICE F. NELSON

ASSISTANT DIRECTOR

CLIENT SERVICES &BENEFIT OPERATIONS

FLORENCE J. SHEPPARD

ACTING DIRECTOR

DIVISION OF PENSIONS AND BENEFITS


ORGANIZATION

DIRECTOR

The Director is responsible for the coordination of thefunctions of the Division, the development of theDivision budget, and communication with otherbranches of State government, local government, andthe public. The Director serves as the Secretary to theSupplemental Annuity Collective Trust Council, theState Health Benefits Commission, and the StateHouse Commission in its capacity as the Board ofTrustees for the Judicial Retirement System. TheDirector is also responsible for legal and legislativematters and Board of Trustees administration. In addi-tion, the Treasurer has delegated the responsibility ofmaintaining the Federal-State Agreement for SocialSecurity to the Director of the Division of Pensions andBenefits.

The Division of Pensions and Benefits falls under thejurisdiction of the New Jersey Department of theTreasury. The Director of the Division of Pensions andBenefits reports directly to the State Treasurer.

OFFICE OF OPERATIONS

The work of this office, overseen by a Deputy Director,is divided among three bureaus: Enrollment andPurchase; Claims; and Retirement.

The Enrollment and Purchase Bureau processes allenrollments, transfers, and purchases of service creditfor all of the State retirement systems. The ClaimsBureau processes all death claims, withdrawals, andloan requests. In addition, this bureau oversees bene-ficiary designations filed by active and retired mem-bers and issues group life insurance policies, riders,and special endorsements. The Retirement Bureau pre-pares retirement estimates and processes retirement

CHIEFS AND MANAGERS

Seated, First Row (left to right): Mary Ann Ryan – Client Services; Joseph Zisa – Defined Benefit andContribution Plans; Wendy Jamison – Boards of Trustees;

Second Row (left to right): Peter Mullings - Administrative Services; Timothy McMullen – Budget and Compliance;Michael Weik – Operations; Francis Peterson — Financial Reporting, Payments, and Collections;

Absent: Mark Schwedes - Enrollments and Purchases


ORGANIZATION

applications for all of the State retirement systems.

OFFICE OF HEALTH BENEFITS

This office, overseen by a Deputy Director, consists oftwo elements: the Health Benefits Bureau and theOffice of Policy Planning. The Health Benefits Bureauprocesses all enrollments, changes, and terminationsfor active and retired members of the State HealthBenefits Program. In addition, this bureau is responsi-ble for the administration of benefits under the feder-al COBRA law, and enrollments, changes, andterminations for members of the Prescription Drug Planand State Employee Dental Program. The Office ofPolicy and Planning analyzes and makes recommenda-tions concerning current and proposed health benefitsprograms to provide the highest quality programs atthe least possible cost. It manages contract renewalsand requests for proposals. Policy and Planning isresponsible for health benefit program review anddevelopment. This office also provides administrativesupport to the State Health Benefits Commission.

OFFICE OF FINANCIAL SERVICES

The work of this office, overseen by a Deputy Director,is divided among three bureaus: Financial Reporting,Payment, and Collections; Budget and Compliance; andDefined Benefit and Contribution Plans Reporting.

The Office of Financial Services is charged with thecustodianship of pension and health benefits assets.These assets are in excess of $77 billion and includeover 789,573 individual member accounts. The office isresponsible for the accounting and budget functionsnecessary for the successful operations of the variouspension funds, health benefits and agency funds, aswell as the administration of the Pension AdjustmentProgram, the Supplemental Annuity Collective Trust,and Deferred Compensation Plan.

OFFICE OF CLIENT SERVICES

This office, overseen by a Deputy Director, consists ofthree units: Telecommunications; Counseling,Education, and Support; and Publications. ClientServices disseminates pension, life insurance, andhealth benefits information to employees, retirees, andemployers covered by the various New Jersey State-administered retirement systems and benefit programs.

The Telecommunications Unit counsels employees,retirees, and employers via the telephone by providinginformation about pension, life insurance, health ben-efits, and general procedures. The Counseling,Education, and Support Unit responds to writtenrequests for information, conducts personal interviewswith employees and retirees who visit the Division ofPensions and Benefits, and provides seminars, employ-er group meetings, employer instructions, and variouspresentations concerning pension, life insurance, andhealth benefits to employees, employers, and retirees.This unit is also responsible for providing receptionistservices for the entire Division. The Publications Unitexercises overall responsibility for creating, editing,updating, and printing of written materials dissemi-nated by the Division, including manuals, reports,forms, benefits statements, and booklets. This unitalso manages the Division’s Internet site.

OFFICE OF MANAGEMENT INFORMATION AND SUPPORT SERVICES

The work of this office, overseen by an AssistantDirector, is responsible for the development and main-tenance of all processing and management informationsystems for the Division. This office also has theresponsibility for the training, usage, and maintenanceof all automated office and telephone equipment.

This office consists of five sections: Image Processingand Records Management; Data Entry; ComputerScheduling and Production Control; SystemsDevelopment; and Support Services.

The Support Services section has the responsibility forthe building and equipment, mail room, warehouseoperations, and forms inventory.

OFFICE OF PROFESSIONAL SERVICES

The Office of Professional Services is located withinthe Director’s Office and operates under the directionof an Assistant Director. It is responsible for providinga structured and consistent planning function for theDivision, analyzing proposed legislation for its fiscaland policy impacts, maintaining the regulatory docu-mentation for Division programs, managing the devel-opment of contracts with external service providers, andconducting research in support of Division activities.


ORGANIZATION

OFFICE OF BOARD OF TRUSTEES ADMINISTRATION

The Office of Board of Trustees Administration, underthe direction of an Assistant Director, provides admin-istrative services for the various defined benefit plans’Boards and Commissions.

The Boards and Commissions have the general respon-sibility for the proper operation of their respectiveemployee benefits program. The Boards adopt rules incompliance with statute and advice of the AttorneyGeneral. The Boards may grant hearing in disputesconcerning issues of law or fact. Hearings are held bythe Office of Administrative Law.

The Boards maintain a record of all proceedings andhold regular meetings and special meetings when nec-essary.

ACTUARIAL ADVISORS

The actuaries establish actuarial tables for the opera-tion of the retirement systems, determine the annual

appropriation required of participating employers andconduct annual examinations of the systems’ actuarialposition.

Contracts for actuarial services for the retirement sys-tems are awarded at specified intervals through theregulations governing the procurement of goods andservices for the State of New Jersey and its constituentdepartments and agencies.

LEGAL ADVISOR

The State Attorney General is the legal advisor for allpension funds and other employee benefit programs.

MEDICAL ADVISORS

All pension funds are served by a medical board con-sisting of three physicians who review claims for dis-ability as submitted by the Disability Review Sectionof the Retirement Bureau for the Division of Pensionsand Benefits.


ORGANIZATION — BOARDS OF TRUSTEES

PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

Seated: Kathleen Coates, Board Secretary(l to r) Leon Flanagan, Chairperson

Thomas Bruno

Standing: Kellie Kiefer-Pushko, Deputy Attorney General(l to r) Peter Maurer

Suzanna Buriani-DeSantisRonald WinthersEdward (Ned) Thomson, IIIWilliam O’BrienSusanne Culliton, State Treasurer’s RepresentativeJackie Bussanich, Administrative Assistant

TEACHERS’ PENSION AND ANNUITY FUND

Seated: James Joyner, Chairperson(l to r) Martha Liebman

Standing: Paul Orihel(l to r) H. O’Neill Williams

Susanne Culliton, State Treasurer’s RepresentativeErland NordstromMary Ellen Rathbun, Board SecretaryJackie Bussanich, Administrative AssistantKellie Kiefer-Pushko, Deputy Attorney General

POLICE AND FIREMEN’S RETIREMENT SYSTEM

Seated: Marty Barrett(l to r) John Sierchio, Chairperson

Richard MikutskyWayne Hall

Standing: Lisa Pointer, Administrative Assistant(l to r) Richard Loccke

Laurel BrennanVincent FotiSusanne Culliton, State Treasurer’s RepresentativeFrank LeakeKellie Kiefer-Pushko, Deputy Attorney GeneralMichael PostorinoWendy Jamison, Board Secretary

Absent: Sherryl Gordon


ORGANIZATION — BOARDS OF TRUSTEES

SUPPLEMENTAL ANNUITY COLLECTIVE TRUST COUNCILJohn Megariotis, Chairperson, Representing Andrew P. Sidamon-Eristoff, Treasurer, State of New Jersey

Leslie Notor, Representing Charlene Holzbaur, Director, Office of Management and BudgetFelix Schirripa, Representing Kenneth Kobylowsk, Commissioner, Department of Banking and Insurance

DEFERRED COMPENSATION BOARDDavid Ridolfino, Chairperson, Representing Andrew P. Sidamon-Eristoff, Treasurer, State of New Jersey

Leslie Notor, Representing Charlene Holzbaur, Director, Office of Management and BudgetFelix Schirripa, Representing Kenneth Kobylowsk, Commissioner, Department of Banking and Insurance

DEFINED CONTRIBUTION RETIREMENT PROGRAM BOARDJoseph Zisa, Chairperson, Representing Florence J. Sheppard, Acting Director, Division of Pensions and Benefits

Sonia Rivera-Perez, Representing Charlene Holzbaur, Director, Office of Management and BudgetFelix Schirripa, Representing Kenneth kobylowsk, Commissioner, Department of Banking and Insurance

Timothy Walsh, Director, Division of Investment

STATE HEALTH BENEFITS COMMISSIONAndrew P. Sidamon-Eristoff, State Treasurer, Chairperson

Kenneth E. Kobylowski, Acting Commissioner, Department of Banking and InsuranceRobert Czech, Chair, Civil Service Commission

Florence J. Sheppard, SecretaryPatrick Nowlan, State Employees’ Representative of the AFL-CIODudley Burdge, Local Employees’ Representative of the AFL-CIO

SCHOOL EMPLOYEES’ HEALTH BENEFITS COMMISSIONDavid Earling, Chairperson

Andrew P. Sidamon-Eristoff, Treasurer, State of New JerseyKenneth E. Kobylowski, Acting Commissioner, Department of Banking and Insurance

Cynthia Jahn, Representing the NJ School Boards AssociationFlorence J. Sheppard, Secretary

Kevin Kelleher, Representing the NJEAWendell Steinhauer, Representing the NJEA

Joseph Del Grosso, Representing the AFL-CIO

STATE POLICE RETIREMENT SYSTEM

Seated: Lieutenant Patrick Callahan(l to r) Wendy Jamison, Board Secretary

Major Karl Kleeberg, Chairperson

Standing: Lisa Pointer, Administrative Assistant(l to r) Susanne Culliton, State Treasurer’s Representative

Diane Weeden, Deputy Attorney General

Absent: Jack Sayers


SIGNIFICANT LEGISLATION

CHAPTER 188, P.L. 2011

Effective Date: This law takes effect on the 180th dayafter enactment (July 16, 2012) and applies to all con-tracts and policies issued on or after the effective date.

Description: This law requires health insurance carriers(hospital, medical, and health service corporations,individual, small employer, and larger group commercialinsurers, and health maintenance organizations), theState Health Benefits Program (SHBP), and the SchoolEmployees’ Health Benefits Program (SEHBP) to providecoverage for expenses for prescribed, orally adminis-tered anticancer medications used to kill or slow thegrowth of cancerous cells on a basis no less favorable

than the policy or contract provides for intravenouslyadministered or injected anti-cancer medications.

Coverage for prescribed, orally administered anticancermedications will not to be subject to any prior author-ization, dollar limit, copayment, deductible, or coin-surance provision that does not apply to intravenouslyadministered or injected anticancer medications.

Additionally, it prohibits a contract or policy fromachieving compliance with the provisions of this law byimposing an increase in patient cost sharing for anti-cancer medications, whether intravenously administeredor injected or orally administered, that are covered underthe contract or policy as of this law’s effective date.

SCOPE OF OPERATIONS

PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS)

This system was established by Chapter 84, P.L. 1954,after the repeal of the law creating the former StateEmployees’ Retirement System. The retirement benefitsof this system are coordinated, but not integratedwith, Social Security. This system is maintained on anactuarial reserve basis. Under the terms of Chapter 71,P.L. 1966, most public employees in New Jersey notrequired to become members of another contributoryretirement program are required to enroll.

Statutes can be found in the New Jersey StatutesAnnotated, Title 43, Chapter 15A. Rules governing theoperation and administration of the fund may be foundin Title 17, Chapter 2 of the New Jersey AdministrativeCode.

TEACHERS’ PENSION AND ANNUITY FUND (TPAF)

This fund was reorganized by Chapter 37, P.L. 1955.The retirement benefits of this system and coordinat-ed, but not integrated with, Social Security. This fund is maintained on an actuarial reserve basis.Membership is mandatory for substantially all teachersor members of the professional staff certified by theState Board of Examiners, and employees of theDepartment of Education who have titles that areunclassified, professional, and certified.

Statutes can be found in the New Jersey StatutesAnnotated, Title 18A, Chapter 66. Rules governing theoperation and administration of the system may befound in Title 17, Chapter 3 of the New JerseyAdministrative Code.

POLICE AND FIREMEN’S RETIREMENT SYSTEM (PFRS)

This system was established by Chapter 255, P.L. 1944.All police officers and firefighters, appointed afterJune 1944, in municipalities where local police andfire pension funds existed or where this system wasadopted by referendum or resolution are required tobecome members of this system. Certain State andcounty employees are also covered. Employer obliga-tions are paid by the local employers and the State.This system is maintained on an actuarial reservebasis.

Statutes can be found in the New Jersey StatutesAnnotated, Title 43, Chapter 16A. Rules governing theoperation and administration of the system may befound in Title 17, Chapter 4 of the New JerseyAdministrative Code.

STATE POLICE RETIREMENT SYSTEM (SPRS)

This system was created by Chapter 89, P.L. 1965 as asuccessor to the State Police Retirement andBenevolent Fund. All uniformed officers and troopersof the Division of State Police in the New JerseyDepartment of Law and Public Safety are required toenroll. This system is maintained on an actuarialreserve basis.


JUDICIAL RETIREMENT SYSTEM (JRS)

This system was established by Chapter 140, P.L. 1973after the repeal of the laws providing pension benefitsto members of the State judiciary and their eligiblesurvivors. All members of the State judiciary arerequired to enroll. The system is maintained on anactuarial reserve basis.


DEFINED CONTRIBUTION RETIREMENT PROGRAM (DCRP)

This program was established July 1, 2007 under theprovisions of Chapter 92, P.L. 2007 and Chapter 103,P.L. 2007, and expanded under the provisions ofChapter 89, P.L. 2008 and Chapter 1, P.L. 2010. Theprogram is a tax-qualified defined contribution moneypurchase pension plan under Internal Revenue Code(IRC) §401(a) et seq., and is a “governmental plan”within the meaning of IRC §414(d). Eligible membersare provided with a tax-sheltered, defined contributionretirement benefit, along with life insurance and dis-ability coverage. Individuals eligible for membership



SCOPE OF OPERATIONS

include State or Local Officials who are elected orappointed on or after July 1, 2007; employees enrolledin the PERS or TPAF on or after July 1, 2007 who earnsalary in excess of established “maximum compensa-tion” limits, employees enrolled in the PFRS or SPRSafter May 21, 2010 who earn salary in excess of estab-lished “maximum compensation” limits; and employ-ees otherwise eligible to enroll in the PERS or TPAF onor after November 2, 2008, who do not earn the mini-mum annual salary required for PERS or TPAF Tier 3enrollment or do not work the minimum hours perweek required for PERS or TPAF Tier 4 enrollment.

Statutes can be found in the New Jersey StatutesAnnotated, Title 43, Chapter 15C, Article 1 et seq.

ALTERNATIVE BENEFIT PROGRAM (ABP)

This program was established by several pieces of leg-islation between 1965 and 1968 for full-time facultymembers of public institutions of higher education. Itwas later expanded to include certain administrativeand professional titles.

Chapter 385, P.L. 1993 increased the number of invest-ment carriers to six. The investment carriers underwrit-ing annuities are as follows: VALIC; AXA Financial(Equitable); The Hartford; ING Life Insurance andAnnuity Co.; MetLife (formerly Travelers/CitiStreet);and the Teachers Insurance and AnnuityAssociation/College Retirement Equitites Fund(TIAA/CREF). The ABP is a “defined contribution” planas distinguished from “defined benefits” payable bythe other State retirement systems. Immediate vestingafter the first year of participation offers the mobilityof pension credit among the private and public insti-tutions of higher education in the United States andCanada. Group life insurance and long-term disabilityinsurance are underwritten by the Prudential InsuranceCompany of America, Inc.

Statutes can be found in the New Jersey StatutesAnnotated, Title 18A, Chapter 66. Rules governing theoperation and administration of this program may befound in Title 17, Chapter 7 of the New JerseyAdministrative Code.

PRISON OFFICERS’ PENSION FUND (POPF)

This fund was established under Chapter 220, P.L.1941. It was closed to new employees as of January1960. New employees are enrolled in the Police andFiremen’s Retirement System. This system is not main-tained on an actuarial reserve basis.

Statutes can be found in the New Jersey StatutesAnnotated, Title 43, Chapter 7.

CONSOLIDATED POLICE AND FIREMEN’S PENSION FUND (CPFPF)

This fund was established by Chapter 358, P.L. 1952,to place 212 local police and fire pension funds on anactuarial reserve basis. The membership consists ofpolice and firefighters appointed prior to July 1, 1944.The liabilities of these local funds were shared: two-thirds by the participating municipalities and one-third by the State.

Statutes can be found in the New Jersey StatutesAnnotated, Title 43, Chapter 16. Rules governing theoperation and administration of this fund may befound in Title 17, Chapter 6 of the New JerseyAdministrative Code.

NEW JERSEY STATE EMPLOYEES DEFERRED COMPENSATION PLAN (NJSEDCP)

This plan was established by Chapter 39, P.L. 1978 andis available to any State employee who is a member ofa State-administered retirement system. This plan is avoluntary investment program that provides retirementincome separate from and in addition to the basic pen-sion benefit.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 18A.

Prudential Retirement was selected as the NJSEDCP'sthird-party administrator on August 26, 2005. TheDivision of Pensions and Benefits maintains its admin-istrative oversight functions.

SUPPLEMENTAL ANNUITY COLLECTIVE TRUST (SACT)

This trust was established by Chapter 123, P.L. 1963.This program includes active members of several State-administered retirement systems. Members make vol-untary additional contributions through their pension


SCOPE OF OPERATIONS

funds to purchase variable retirement annuities inorder to supplement the benefits provided by theirbasic system. Some employers agree to purchase tax-sheltered annuities for the same purpose for certaineligible employees.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 18A. Rules governing theoperation and administration of the trust may befound in Title 17, Chapter 8 of the New JerseyAdministrative Code.

ADDITIONAL CONTRIBUTIONS TAX-SHELTERED PROGRAM (ACTS)

This program was established in 1996. ACTS is a tax-sheltered, supplemental, retirement program pursuantto Section 403(b) of the federal Internal Revenue Codeoffered to employees of institutions of higher educa-tion, the Commission of Higher Education, theDepartment of Education, and the Office of StudentAssistance. The eligible employees are able to obtaintax-deferred annuities with a variety of investmentcarriers through a salary reduction agreement. Theannuities are available from the same investment car-riers who service the Alternate Benefit Program.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 18A, Section 113.

CENTRAL PENSION FUND (CPF)

This fund consists of the administration of a series ofnoncontributory pension acts. No reserves are estab-lished for the payment of retirement benefits. Thesebenefits are administered by the Division in accor-dance with the governing statute and the rules andregulations of the State House Commission.

PENSION ADJUSTMENT FUND (PAF)

This fund was established pursuant to Chapter 143,P.L. 1958 and covers all eligible pensions of State-administered retirement systems. It was altered byChapter 169, P.L. 1969, which provided a cost-of-liv-ing adjustment and by Chapter 139, P.L. 1971 whichextended its provisions to eligible survivors.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 18A. Rules governing theoperation and administration of the fund may be found

in Title 17, Chapter 1 of the New Jersey AdministrativeCode.

UNEMPLOYMENT COMPENSATION AND TEMPORARY DISABILITY INSURANCE FOR STATE EMPLOYEES (UC/TDI)

The Division of Pensions and Benefits coordinates thework related to the payment of the charges involvingunemployment compensation and temporary disabilityinsurance benefits for State employees eligible for cov-erage under federal law. It is responsible for contract-ing with a service agency to review all questionableclaims for unemployment compensation.

STATE HEALTH BENEFITS PROGRAM (SHBP)

The program provides medical coverage to employees,retirees, and their dependents. Chapter 125, P.L. 1964extended the program to include employees of localgovernment. The program includes a preferred providerorganization (NJ DIRECT) and two HMO plans (AetnaHMO and CIGNA HealthCare). A small group of Stateemployees are covered under legacy plans — theindemnity type plan (Traditional Plan) and a point-of-service plan (NJ PLUS).

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Article 17.25 et seq.Rules governing the operation and administration ofthe program can be found in Title 17, Chapter 9 of theNew Jersey Administrative Code.

SCHOOL EMPLOYEES’ HEALTH BENEFITS PROGRAM (SEHBP)

The program provides medical coverage to local educa-tion employees, retirees, and their dependents.Chapter 103, P.L. 2007 established the program whichincludes a preferred provider organization (NJ DIRECT)and two HMO plans (Aetna HMO and CIGNAHealthCare).

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Article 17.46 et seq.Rules governing the operation and administration ofthe program can be found in Title 17, Chapter 9 of theNew Jersey Administrative Code.


SCOPE OF OPERATIONS

PRESCRIPTION DRUG PLAN (PDP)

This plan was initiated by the State effectiveDecember 1, 1974. The passage of Chapter 41, P.L.1976 extended coverage to all eligible State employ-ees. The State Health Benefits Commission offered theplan to local employers on July 1, 1993. Employeesand their eligible dependents are covered by the planin the same manner as the State Health BenefitsProgram. The Division of Pensions and Benefits becameresponsible for plan administration in November 1976.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Section 17.29(F).Rules governing the operation and administration ofthe program can be found in Title 17, Chapter 9, of theNew Jersey Administrative Code.

EMPLOYEE DENTAL PLANS (EDP)

This program was initially established February 1, 1978and further expanded in June 1984. Eligible State andcertain local employees may enroll for themselves andtheir eligible dependents by paying the premium cal-culated to meet half the cost of the plan. Plans offeredinclude the Dental Expense Plan, a traditional indem-nity plan, and a selection of Dental Plan Organizations.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Section 17.29(F).Rules governing the operation and administration ofthe program may be found in Title 17, Chapter 9, ofthe New Jersey Administrative Code.

TAX$AVE

The State Employees Tax Savings Program (Tax$ave)was initially established for State Employees in July1996 and authorized under Section 125 of the InternalRevenue Code. The benefit consists of three compo-nents: the Premium Option Plan that allows employeesto use pre-tax dollars deducted from their pay forhealth or dental benefit premiums they may berequired to pay for coverage; the Flexible SpendingAccount for Unreimbursed Medical Expenses thatallows employees to use up to $2,500 pre-tax dollars

annually deducted from their pay for medical expensesnot reimbursed by their medical or dental insurance;and the Dependent Care Spending Account that allowsemployees to use up to $5,000 pre-tax dollars annual-ly deducted from their pay for dependent care expens-es required to permit the employee and spouse towork.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Article 15.1a. Rulesgoverning the Tax$ave can be found in Title 17,Chapter 1, Subchapter 13 of the New JerseyAdministrative Code.

COMMUTER TAX$AVE

This program, authorized by Chapter 162, P.L. 2001and available under Section 132(f) of the federalInternal Revenue Code, allows eligible State employeesto use before-tax dollars to pay for qualified commuterexpenses. Under the program, eligible employees mayexecute salary reduction agreements to have up to$230 per month ($2,760 per year) deducted fromsalary to pay for mass transit commutation costs and$230 per month ($2,760 per year) to pay for parkingat work or at park and ride sites. The program wasimplemented in February 2004.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter 14, Article 17.33. Rulesgoverning Commuter Tax$ave can be found in Title 17,Chapter 1, Subchapter 14 of the New JerseyAdministrative Code.

STATE EMPLOYEES LONG TERM CARE INSURANCE PLAN

This plan is a participant-pay-all benefit available toState employees, retirees, and family members. ThePrudential Insurance Company administers the insur-ance plan under contract with the State. The initialoffering of the benefit was effective July 1, 2003.

Statutes can be found in the New Jersey StatutesAnnotated, Title 52, Chapter14, Article 15.9a and Title34, Chapter 11, Article 4.4b(10).


MEMBERSHIP

ACTIVE MEMBERSHIP RETIREMENT SYSTEM 2011 2012

Public Employees’ Retirement System 297,604* 285,710*Teachers’ Pension & Annuity Fund 152,145* 152,158*Police & Firemen’s Retirement System 42,849* 41,518*State Police Retirement System 2,880* 2,776*Judicial Retirement System 416 404Alternate Benefit Program 21,364 22,225Prison Officers’ Pension Fund 0 0Consolidated Police & Firemen’s Pension Fund 0 0Central Pension Fund NA NA

Total 517,258 504,791

*Both the 2011 and 2012 figures represent the total number of Active and Inactive accounts.The 2012 Inactive (noncontributing) accounts are as follows: PERS Inactive — 50,014, TPAF Inactive — 14,263, PFRS Inactive — 2,017, SPRS Inactive — 30.

RETIRED MEMBERSHIP RETIREMENT SYSTEM 2011 2012

Public Employees’ Retirement System 147,311 152,147Teachers’ Pension & Annuity Fund 85,875 89,276Police & Firemen’s Retirement System 37,882 39,413State Police Retirement System 2,813 3,019Judicial Retirement System 544 561Alternate Benefit Program NA NAPrison Officers’ Pension Fund 141 133Consolidated Police & Firemen’s Pension Fund 288 224Central Pension Fund 9 9

Total 274,863* 284,782*

*The number of retirees varies slightly from those reported in the Notes to the FinancialStatements due to differences in the effective dates of said tabulations.

PARTICIPATION IN HEALTH PROGRAM 2011 2012

State Health Benefits Program and 394,016 400,387School Employees’ Health Benefits Program

Prescription Drug Plan 333,853 337,743Dental Expense Program 164,152 170,017

& BENEFICIARIES

HEALTH BENEFITSPROGRAM


MEMBERSHIP


As of June 30, 2012, the active membership of the system totaled285,710. There were 152,147 retirees and beneficiaries receivingannual pensions totaling $2,791,879,133*.

Beneficiaries of deceased active and retired members received lumpsum death benefits in the amount of $108,660,771.

The system’s assets totaled $27,106,035,734 at the close of the fis-cal year 2012.

* Includes cost-of-living adjustments paid under the provisions of thePension Adjustment Act.


As of June 30, 2012, the active membership of the fund totaled152,158. There were 89,276 retirees and beneficiaries receiving annu-al pensions totaling $3,470,573,025*.


The fund’s assets totaled $26,333,845,533 at the close of the fiscalyear 2012.



As of June 30, 2012, the active membership of the system totaled41,518. There were 39,413 retirees and beneficiaries receiving annu-al pensions totaling $1,828,342,643*.


The system’s assets totaled $21,494,209,356 at the close of the fis-cal year 2012.



As of June 30, 2012, the active membership of the system totaled2,776. There were 3,019 retirees and beneficiaries receiving annualpensions totaling $162,329,762*.

Beneficiaries of deceased active and retired members received lumpsum death benefits in the amount of $735,607.

The system’s assets totaled $1,772,937,738 at the close of the fiscalyear 2012.


400 000

300 000

400,000

200 000

300,000

100 000

200,000

0

100,000

0

1925 1950 1975 2011 2012

180 000180,000

120,000

60,000

00

1920 1955 1990 2011 2012

60 00060,000

40,000

20,000

00

1950 1970 1990 2011 2012

4 000

3 000

4,000

2 000

3,000

1 000

2,000

0

1,000

0

1965 1980 1995 2011 2012

� Retirees and Beneficiaries � Active





MEMBERSHIP

JUDICIAL RETIREMENT SYSTEM

As of June 30, 2012, the active membership of the system totaled404. There were 561 retirees and beneficiaries receiving annual pen-sions totaling $45,464,833.

The system’s assets totaled $239,579,486 at the close of the fiscalyear 2012.

ALTERNATE BENEFIT PROGRAM

As of June 30, 2012, the State paid $152,994,447 on behalf of22,225 participants to the carriers underwriting this program.

Beneficiaries of deceased active and retired members received$16,258,202 in lump sum death benefits.

PRISON OFFICERS’ PENSION FUND

The activity shown to the right is consistent with a closed pensionfund.

This fund was closed to new membership in January 1960.

As of June 30, 2012, the active membership of the fund totaled zero.There were 133 retirees and beneficiaries receiving annual pensionstotaling $1,950,804.

The fund’s assets totaled $9,191,238 at the close of the fiscal year2012.

CONSOLIDATED POLICE AND FIREMEN’S PENSION FUND

The activity shown to the right is consistent with a closed pensionfund.

As of June 30, 2012, the active membership of the fund totaled zero.There were 224 retirees and beneficiaries receiving annual pensionstotaling $5,046,645.

The fund’s assets totaled $5,259,544 at the close of the fiscal year2012.

600600

400

200

00

1983 1993 2003 2011 2012

25 000

20,000

25,000

15,000

10,000

0

5,000

0

1970 1980 1990 2011 2012

600600

400

200

00

1955 1970 1985 2011 2012

3,000

6,000

9,000

0

1955 1970 1985 2011 2012


� Active




MEMBERSHIP

NJ STATE EMPLOYEES’ DEFERRED COMPENSATION PLAN

Fiscal year 2012 continues to show a marked increase in active par-ticipation due to membership campaigns conducted by the Divisionof Pensions and Benefits.

As of June 30, 2012, the active membership of the New Jersey StateEmployees’ Deferred Compensation Plan totaled 40,232. There were4,903 members receiving monthly installment payments.

The plan’s net assets (participants’ balances) were $2,586,043,883 atthe close of the fiscal year 2012.

SUPPLEMENTAL ANNUITY COLLECTIVE TRUST

As of June 30, 2012, the active membership of the trust totaled3,104. The unit value was $62.5365, an increase of $0.1623 from theJune 30, 2011 value of $62.3742.

There were 454 annuitants.

The trust’s assets totaled $155,647,322 at the close of the fiscal year2012.

UNEMPLOYMENT COMPENSATION AND TEMPORARY DISABILITY INSURANCE

As of June 30, 2012, the Unemployment Compensation Program forState employees covered as many as 123,032 persons, and theDivision remitted $4,267,626 on behalf of the State. There were10,210 requests for unemployment benefits filed, and $30,592,766was paid to the employees found eligible.

During the same period, the Temporary Disability Insurance Programcovered 133,222 employees, and the Division remitted $33,761,605on behalf of the State. Claims paid totaled $33,608,873.

CENTRAL PENSION FUND

As of June 30, 2012, there were 9 beneficiaries receiving annual pen-sions totaling $189,481.

45 00045,000

30,000

15,000

00

1980 1990 2002 2011 2012

15,000

10,000

5,000

00

1965 1980 1995 2011 2012

150,000

100,000

50,000

00

1980 1990 2000 2011 2012

600600

400

200

00

1965 1980 2000 2011 2012



� State Employees

� Retirees and Beneficiaries


MEMBERSHIP

PENSION ADJUSTMENT EXPENSE

There were 233,551 pensioners who were paid $930,323,418 duringthe fiscal year 2012.

STATE HEALTH BENEFITS PROGRAM AND SCHOOL EMPLOYEES’ HEALTH BENEFITS PROGRAM

As of June 30, 2012, there were 400,387 covered participants (activeand retired) consisting of 143,099 State participants and 257,288participants of 1,103 local participating employers.

The State and state employee contributions were $1,351,142,972while payment made by local (including education) employers andemployees was $2,447,690,108.

PRESCRIPTION DRUG PLAN

The Prescription Drug Plan covered as many as 142,616 State partic-ipants and 195,127 local participants during fiscal year 2012.

The State’s contribution was $473,386,992 while payment made bylocal (including education) employers was $638,946,255.

DENTAL EXPENSE PROGRAM

The Dental Expense Program covered as many as 116,691 eligibleState participants and 53,326 local participants during fiscal year2012. The State of New Jersey as the employer expended $37,927,718for active participants while payment made by local (including edu-cation) employers was $2,680,305.

300 000300,000

200,000

100,000

00

1960 1980 2000 2011 2012

300,000

200,000

100,000

00

1961 1975 1985 2011 2012

160,000

200,000

120,000

160,000

80,000

0

40,000

0

1980 1990 2000 2011 2012

120 000120,000

80,000

40,000

00

1980 1990 2000 2011 2012

� Retirees and Beneficiaries

� Local Participants � State Participants



FINANCIAL SECTION


STATE OF NEW JERSEYDIVISION OF PENSIONS AND BENEFITS

June 30, 2012

INDEX

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Basic Financial Statements:

Statement of Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Combining Statement of Fiduciary Net Assets — Fiduciary Funds — Pension Trust and State Health Benefit Program Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Statement of Changes in Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Combining Statement of Changes in Fiduciary Net Assets — Fiduciary Funds — Pension Trust and State Health Benefit Program Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Schedules

1 Required Supplementary Information (Unaudited) — Schedule of Funding Progress . . . . . . . . . . . . . . . . . . . 86

2 Required Supplementary Information (Unaudited) — Schedule of Employer Contributions . . . . . . . . . . . . . . 91

3 Schedule of Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

4 Schedule of Investment Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

5 Schedule of Expenses for Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

6 Schedule of Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

7 Schedule of Changes in Fiduciary Net Assets — Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

8 Combining Schedule of Balance Sheet Information — Fiduciary Funds — Agency Funds . . . . . . . . . . . . . . . 98

9 Combining Schedule of Changes in Fiduciary Net Assets Information — Fiduciary Funds — Agency Funds . . . 99

10 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit Program Fund — State . . . . . 100

11 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health Benefit Program Fund — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

12 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit Program Fund — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

13 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health BenefitProgram Fund — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

14 Combining Schedule of Fiduciary Net Assets Information — State Health Benefit Program Fund — Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

15 Combining Schedule of Changes in Fiduciary Net Assets Information — State Health Benefit Program Fund — Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

16 Combining Schedule of Balance Sheet Information — Agency Fund — Dental Expense Program . . . . . . . . . . 106

17 Combining Schedule of Changes in Fiduciary Net Assets Information — Agency Fund — Dental Expense Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107



June 30, 2012

INDEX

18 Schedule of Changes in Assets and Liabilities Information — Agency Fund —Alternate Benefit Program Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

19 Schedule of Changes in Assets and Liabilities Information — Agency Fund —Pension Adjustment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

20 Schedule of Changes in Assets and Liabilities Information — Agency Fund —Dental Expense Program — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

21 Schedule of Changes in Assets and Liabilities Information — Agency Fund —Dental Expense Program — State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

22 Schedule of Changes in Assets and Liabilities Information — Agency Fund —Dental Expense Program — Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112


INDEPENDENT AUDITOR'S REPORT

Office of Legislative ServicesOffice of the State AuditorState of New Jersey

We have audited the accompanying statements of the benefit funds administered by the State of NewJersey Division of Pensions and Benefits (the Division) as of and for the year ended June 30, 2012, whichcollectively comprise the Division’s basic financial statements as listed in the accompanying table of con-tents. These financial statements are the responsibility of the Division’s management. Our responsibili-ty is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinions.

As discussed in Note 1, the financial statements of the Division are intended to present the fiduciary netassets and the changes in fiduciary net assets of the benefit funds administered by the Division. Theydo not purport to, and do not, present fairly the financial position of the State of New Jersey as of June30, 2012 and the changes in its financial position, or, where applicable, its cash flows for the year thenended in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements referred to above present fairly, in all material respects, the fidu-ciary net assets of the benefit funds administered by the State of New Jersey Division of Pension andBenefits as of June 30, 2012, and the changes in fiduciary net assets for the year then ended in conform-ity with accounting principles generally accepted in the United States of America.

Accounting principles generally accepted in the United States of America require that the management’sdiscussion and analysis and the schedules of funding progress and employer contributions, as listed inthe table of contents, be presented to supplement the basic financial statements. Such information,although not a part of the basic financial statements, is required by the Governmental AccountingStandards Board, who considers it to be an essential part of financial reporting for placing the basic finan-cial statements in an appropriate operational, economic, or historical context. We have applied certainlimited procedures to the required supplementary information in accordance with auditing standards gen-erally accepted in the United States of America, which consisted of inquiries of management about themethods of preparing the information and comparing the information for consistency with management’sresponses to our inquiries, the basic financial statements, and other knowledge we obtained during ouraudit of the basic financial statements. However, we did not audit the information and express no opin-ion on it.


Our audit was conducted for the purpose of forming an opinion on the basic financial statements takenas a whole. The additional information, presented on Schedules 3 through 22, as listed in the table ofcontents, is presented for purposes of additional analysis and is not a required part of the basic finan-cial statements. The additional information, including the information presented on Schedules 3 through22, as listed in the table of contents, is the responsibility of management and was derived from and relatedirectly to the underlying accounting and other records used to prepare the basic financial statements.The information has been subjected to the auditing procedures applied in the audit of the basic finan-cial statements and certain additional procedures, including comparing and reconciling such informationdirectly to the underlying accounting and other records used to prepare the basic financial statements orto the basic financial statements themselves, and other additional procedures in accordance with audit-ing standards generally accepted in the United States of America. In our opinion, the information is fair-ly stated, in all material respects, in relation to the basic financial statements as a whole.

Mt. Laurel, New JerseyNovember 5, 2012


STATE OF NEW JERSEYDIVISION OF PENSIONS AND BENEFITSManagement’s Discussion and Analysis

June 30, 2012

Our discussion and analysis of the financial performance of the fiduciary funds (the Funds) administeredby the Division of Pensions and Benefits (the Division) provides an overview of the Funds’ financial activ-ities for the fiscal year ended June 30, 2012. Please read it in conjunction with the basic financial state-ments and financial statement footnotes, which follow this discussion.

FINANCIAL HIGHLIGHTSFiduciary Funds-Pension Trust and Health Benefit Program Funds

• Fiduciary net assets decreased by $3.1 billion as a result of this year’s operations from $81.0 billionto $77.9 billion.

• Additions for the year are $10.9 billion, which are comprised of member and employer pension contributions of $9.2 billion and investment income of $1.7 billion.

• Deductions for the year are $14.1 billion, which are comprised of benefit and refund payments of$14.1 billion and administrative expenses of $46.5 million.

OVERVIEW OF THE FINANCIAL STATEMENTSThis discussion and analysis is intended to serve as an introduction to the basic financial statements. Thebasic financial statements are comprised of two components: 1) fiduciary fund financial statements and2) notes to the financial statements. This report also contains required and other supplementary infor-mation in addition to the basic financial statements.

FUND FINANCIAL STATEMENTSA fund is a grouping of related accounts that is used to maintain control over resources that have beensegregated for specific activities or objectives. The Division uses fund accounting to ensure and demon-strate compliance with finance-related legal requirements.

Fiduciary Funds

Fiduciary funds are used to account for the assets that the Division holds on behalf of others as theiragent. Fiduciary funds are custodial in nature and do not involve measurement of results of operations.

The Division administers eighteen fiduciary funds: twelve pension trust funds, three health benefit pro-gram funds, and three agency funds. The basic fiduciary fund financial statements consist of the state-ment of fiduciary net assets and the statement of changes in fiduciary net assets.

NOTES TO THE FINANCIAL STATEMENTSThe notes provide additional information that is essential to a full understanding of the data provided inthe financial statements and includes a description of the fiduciary funds.

OTHER INFORMATIONIn addition to the basic financial statements and accompanying notes, this report also presents certainrequired supplementary information, which includes information regarding the funding status of the pen-sion trust and health benefit program funds.



Management’s Discussion and Analysis, ContinuedJune 30, 2012

FINANCIAL ANALYSISSUMMARY OF FIDUCIARY NET ASSETS

PENSION TRUST AND STATE HEALTH BENEFIT PROGRAM FUNDS

Increase2012 2011 (decrease)

Assets $ 80,497,592,498 83,180,710,720 (2,683,118,222)Liabilities 2,613,602,458 2,113,100,438 500,502,020

Net assets $ 77,883,990,040 81,067,610,282 (3,183,620,242)

Assets of the pension trust and state health benefit program funds consist primarily of investments, secu-rities lending collateral, contributions due from members and participating employers, accrued interestand dividends on investments, members’ loans and other receivables. Between fiscal years 2011 and 2012,total assets decreased by $2.7 billion or 3.2%. This is due to a reduction of $3.2 billion in investmentholdings that were utilized to pay benefits of the funds, an increase in the securities lending collateralof $0.3 billion, and a net increase in cash and receivables of $0.2 billion.

Liabilities of the pension trust and state health benefit program funds consist primarily of retirement ben-efits payable to retirees and beneficiaries, contributory and non-contributory group life insurance (NCGI)premiums payable to the Funds’ insurance provider, securities lending collateral and rebates payable and,classified under accounts payable and accrued expenses, outstanding medical claims payable to the med-ical providers under the State Health Benefits Program (SHBP). Also included with accounts payable andaccrued expense are liabilities of the pension trust funds for unclaimed member accounts and checksissued to members that have not been negotiated by the members but remain due and payable. Total lia-bilities increased by $0.5 billion or 23.7%. This is due to an increase in the securities lending collateraland rebates payable of $0.3 billion and an increase in retirement benefits payable and others of $0.2 bil-lion.

Net assets of the pension trust and state health benefit program funds increased by $3.2 billion or 3.9%.

SUMMARY OF FIDUCIARY NET ASSETSAGENCY FUNDS

2012 2011 Increase

Assets $ 60,038,707 47,982,744 12,055,963Liabilities 60,038,707 47,982,744 12,055,963

Net assets $ — — —

Assets of the agency funds consist of cash and cash equivalents, investments and contributions due fromthe State and local employers. Between fiscal years 2011 and 2012, total assets increased by $12.0 mil-lion or 25.1%. This is attributable to the increased amount invested in the Cash Management Fund (CMF)of $9.1 million, a small increase in cash and cash equivalents and an increase in total receivables of $2.9million.




Liabilities in the agency funds vary according to plan. In the Alternate Benefit Program (ABP), theyinclude reimbursements to state and county colleges, reimbursement to the State of New Jersey generalfund of any unused appropriations and non-contributory group life insurance benefits payable. In theDental Expense Program (DEP), they include claims payable, and in the Pension Adjustment Fund (PAF),they include liabilities for payroll and amounts due to the State of New Jersey general fund and otherpension funds. Between fiscal years 2011 and 2012, total liabilities increased by $12.0 million or 25.1%.This is comprised of a $0.8 million decrease in liabilities in the PAF, a $6.6 million increase in liabilitiesin DEP, and a $6.2 million increase in ABP liabilities.

SUMMARY OF CHANGES TO FIDUCIARY NET ASSETSPENSION TRUST AND STATE HEALTH BENEFIT PROGRAM FUNDS

Increase2012 2011 (decrease)

Additions:Member contributions $ 2,309,269,955 2,094,692,660 214,577,295Employer contributions and other 6,912,323,830 5,364,672,450 1,547,651,380Net investment income (loss) 1,722,074,598 11,993,659,321 (10,271,584,723)

Total additions 10,943,668,383 19,453,024,431 (8,509,356,048)

Deductions:Benefits 13,923,519,412 12,820,748,823 1,102,770,589Refunds of contributions 157,270,934 162,706,881 (5,435,947)Administrative expenses 46,498,279 50,126,876 (3,628,597)

Total deductions 14,127,288,625 13,033,582,580 1,093,706,045

Changes in net assets $ (3,183,620,242) 6,419,441,851 (9,603,062,093)

Additions of the pension trust and state health benefit program funds consist of member and employercontributions and earnings from investment activities. There is a decrease of $8.5 billion or 43.7% intotal additions, mainly attributable to lesser net investment income in fiscal year 2012 as compared tofiscal year 2011.

Member contributions increased by $214.6 million overall of which $11.5 million increase is attributableto the state health benefit program funds and a $203.1 million increase is attributable to the pensiontrust funds. In the SHBP – State, the member contributions increased by $11.7 million or 8.3%, in SHBP– Local the member contributions increased by $2.9 million or 7.3% and in SHBP – Education, the mem-ber contributions decreased by $3.1 million or -5.9%. Active employee contribution increased as a resultof Chapter 78, P.L. 2011 premium share requirements. In plan year 2012 the active employee group ratefor SHBP – State increased by 9.0%, in SHBP – Local the increase was 10.3% and in SHBP – Educationthe increase was 10.1%. SHBP membership increases between plan year 2011 and 2012 also contributedto the higher member contributions. However, in the SHBP – Education total member contributionsdecreased between fiscal year 2011 and fiscal year 2012 due to a reduction in the number of self paymembers with adult child coverage as a result of the extension of coverage for qualified adult child underthe provisions of the federal Patient Protection and Affordable Care Act (PPACA).




For the pension trust funds, the increase in member contributions is attributable to the higher membercontribution rate for the various pension plans as required in Chapter 78, P.L. 2011.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribution,defined as 1/7th of the required amount, beginning in fiscal year 2012. Based on that, the State madepension contributions totaling $484.5 million as follows: $287.5 million to the Teachers’ Pension andAnnuity Fund (TPAF), $124.9 million to Public Employees’ Retirement System (PERS), $53.6 million toPolice & Firemen’s Retirement System (PFRS), $0.2 million to Consolidated Police & Firemen’s PensionFund (CPFPF), $5.5 million to Judicial Retirement System (JRS), and $12.8 million to the State PoliceRetirement System (SPRS).

State non-contributory group life insurance contributions for fiscal year totaling $67.4 million were asfollows: $30.8 million for TPAF, $29.8 million for PERS, $5.6 million for PFRS, $0.5 million for JRS, and$0.7 million for SPRS. Between fiscal years 2011 and 2012, the State’s contribution toward non-contrib-utory group life insurance decreased by $4.2 million due to lower claims activity. State non-contributo-ry life insurance benefits are funded on a pay-as-you-go basis. The local contributions for PERS and PFRSare included in the annual billings to local employers.

The annual local employer pension appropriation billings normally increase due to the salaries of employ-ees and the rate of contribution as determined by the actuary. For PERS, the amount accrued in fiscalyear 2011 for normal contribution, accrued liability and NCGI was $826.0 million and was due on April1, 2012. For fiscal year 2012, the total amount accrued was $784.7 million and is due April 1, 2013. ForPFRS the total amount accrued in fiscal year 2011 for normal contributions, accrued liability and NCGIwas $763.2 million and was due April 1, 2012. For fiscal year 2012, the total amount accrued was $781.2million and is due April 1, 2013.

The local billing amounts due April 1, 2013 for PERS and PFRS are impacted by various provisions ofChapter 78, P.L. 2011, the revised economic actuarial assumptions including the assumed rate of returndecreasing from 8.25% to 7.95% and the reduction in salary increase assumption of -2% for the first fiveyears and -0.75% for all years thereafter.

The SHBP – State employer contributions decreased by $82.0 million. This is a result of using availablereserves to cover claims. For the SHBP – Local, employer contributions increased by $89.1 million. Forthe SHBP – Education, employer contributions increased by $107.0 million. These increases are attribut-able to rate increases effective January 1, 2011.

The total investment return for all pension funds was estimated to be a gain of 2.52% compared to again of 18.03% in the prior year. As a result, net investment income decreased by $10.3 billion or 85.6%due to the lower investment return in fiscal year 2012 as compared to fiscal year 2011.

Deductions of the pension trust and state health benefit program funds are mainly comprised of pensionbenefit payments to retirees and beneficiaries, refunds of contributions to former members, and admin-istrative costs incurred by the Funds to run the pension plans. Also included are claim charges for theself-insured health and prescription drug benefit programs. Between fiscal years 2011 and 2012, benefitpayments increased by $1.1 billion or 8.7% due to an increase in the number of retirees receiving retire-ment and other benefits. The number of refunds processed decreased by $5.4 million or 3.3% comparedto last year. Administrative expenses decreased by $3.6 million or 7.2%.


The reduction in net assets of $3.2 billion was mainly attributable to less investment income andincreased benefit payments when comparing fiscal year 2012 to fiscal year 2011

OVERALL FINANCIAL CONDITION OF THE FUNDS

For the defined benefit pension trust funds, the combined funded ratio is 67.5% based on the revisedcurrent actuarial valuation dated July 1, 2011, reflecting the impact of the revised economic assumptionchanges, with an unfunded actuarial accrued liability of $41.7 billion on an actuarial basis per GASBStatement No. 25 as compared to 70.5% based on the prior year valuation with an unfunded actuarialaccrued liability of $36.3 billion. The increase in the unfunded pension liability and the decrease in theoverall funded ratio is mainly attributable to expected actuarial losses including the investment return of2.52% being lower than the assumed rate of return of 7.95% and the State’s pension contribution of1/7th of the actuarially required amount being less than the full actuarially required amount.

For the SHBP – Education, total expenses incurred exceeded total revenues recognized by $185.3 million,reducing the surplus at the beginning of the year from $369.2 million to $183.9 million at year end. Thisreduction is due in part to retired rates that were set to utilize some of the funds surplus balance. Inaddition, on the retired side, available fund balance was used to cover a portion of the State’s requiredpremium contributions. Lastly, there was an increase in incurred-but-not-reported claims between fiscalyear 2011 and fiscal year 2012, which also contributed to the reduction in the surplus at year end. Forthe SHBP – State, total expenses incurred exceeded total revenues recognized by $116.3 million, reduc-ing the balance from a surplus at the beginning of the year of $16.2 million to a deficit of $100.1 mil-lion at year end. This is primarily due to the State of New Jersey using available reserves to cover claimspayments. For the SHBP – Local, total expenses incurred exceeded total revenues recognized by $5.2 mil-lion, reducing the surplus at the beginning of the year from $153.1 million to $147.9 million at year endwhich is attributable to higher claims payments.

For the state health benefit program funds for fiscal year 2012, based on the current actuarial valuationdated July 1, 2011, the State had a $18.0 billion unfunded actuarial accrued liability for other post-employment benefits (OPEB) under Governmental Accounting Standards Board (GASB) Statement No. 43for the SHBP – State active and retired members and $30.9 billion for the SHBP – Education employeesand retirees that become the obligation of the State of New Jersey upon retirement. In comparison, basedon the prior year actuarial valuation, the State had a $21.1 billion unfunded actuarial accrued liabilityfor the SHBP - State active and retired members and $38.2 billion for the SHBP - Education employeesand retirees. The reduction in the overall unfunded actuarial accrued liability is mainly attributable to thechanged method of prescription drug integration from the Retiree Drug Subsidy to the Employer GroupWaiver Program and Chapter 78, P.L. 2011 that increased contribution requirements for some futureretirees. The SHBP - Local fiscal year 2012 unfunded actuarial accrued liability for OPEB based on thesame actuarial valuation was $11.1 billion and, for the prior year actuarial valuation, the liability was$12.1 billion.

During the year, the ABP and the PAF received sufficient funding to meet their benefit obligations.

For the State Employees Deferred Compensation Plan and the Supplemental Annuity Collective Trust,members are 100% vested in the present value of their contributions, and the funds have sufficient assetsto meet future benefit obligations.




CONTACTING SYSTEM FINANCIAL MANAGEMENT

This financial report is designed to provide our members, beneficiaries, investors, and other interestedparties with a general overview of the Funds’ finances and to show the Funds’ accountability for themoney it receives. If you have any questions about this report or need additional financial information,contact the Division of Pensions and Benefits, P.O. Box 295, Trenton, NJ 08625-0295.





Statement of Fiduciary Net AssetsFiduciary Funds

June 30, 2012

PENSION TRUST ANDSTATE HEALTH BENEFIT AGENCY

PROGRAM FUNDS FUNDS

Assets:Cash and cash equivalents $ 721,890,499 2,410,643Securities lending collateral 1,209,086,214 —Investments, at fair value:

Cash Management Fund 1,790,977,439 28,235,738Common Pension Fund A 17,810,813,505 —Common Pension Fund B 19,869,132,559 —Common Pension Fund D 14,106,117,246 —Common Pension Fund E 16,810,102,421 —Common stocks 152,251,163 —Mortgages 963,899,029 —U.S. Government obligations 371,746,092 —Domestic equities 1,117,461,645 —International equities 257,677,868 —Other fixed income securities 779,384,678 —

Total investments 74,029,563,645 28,235,738

Receivables:Contributions:

Members 169,983,858 —Employers 3,155,338,564 852,147

Accrued interest and dividends 5,406,223 —Members’ loans 1,169,454,489 —Securities sold in transit 16,105,017 —Other 20,763,989 28,540,179

Total receivables 4,537,052,140 29,392,326

Total assets $ 80,497,592,498 60,038,707

Liabilities:Accounts payable and accrued expenses $ 686,006,889 57,047,268Retirement benefits payable 706,265,336 —Non-contributory group insurance premiums payable 14,094,987 —Assets held for local contributing employers — 2,412,989Pension adjustment payroll payable — 237,510Due to State of New Jersey — 163,355Due to other funds — 177,585Securities lending collateral and rebates payable 1,207,235,246 —

Total liabilities 2,613,602,458 60,038,707

Net Assets:Held in trust for pension and health benefits $ 77,883,990,040 —

See schedule of funding progress on pages 86-90.The accompanying notes are an integral part of the financial statements.


Combining Statement of Fiduciary Net AssetsFiduciary Funds — Pension Trust and State Health Benefit Program Funds

June 30, 2012

ALTERNATE CONSOLIDATED STATE HEALTH STATE HEALTH STATE HEALTH BENEFIT POLICE AND DEFINED POLICE AND PRISON PUBLIC STATE SUPPLEMENTAL TEACHERS’ BENEFIT BENEFIT BENEFIT

LONG-TERM CENTRAL FIREMEN’S DEFERRED CONTRIBUTION JUDICIAL FIREMEN’S OFFICERS’ EMPLOYEES’ POLICE ANNUITY PENSION AND PROGRAM PROGRAM PROGRAMDISABILITY PENSION PENSION COMPENSATION RETIREMENT RETIREMENT RETIREMENT PENSION RETIREMENT RETIREMENT COLLECTIVE ANNUITY FUND FUND FUND

FUND FUND FUND PLAN PLAN SYSTEM SYSTEM FUND SYSTEM SYSTEM TRUST FUND STATE LOCAL EDUCATION TOTAL

Assets:

Cash $ — 39,061 425,590 12,231 7,805 3,708,778 156,279,415 367,693 237,096,071 14,482,638 721,528 297,561,120 382,903 3,170,749 7,634,917 721,890,499

Securities lending collateral — — — — — 3,840,518 329,622,358 — 407,441,067 29,163,423 — 439,018,848 — — — 1,209,086,214

Investments, at fair value:

Cash Management Fund 1,232,900 1,837 4,394,113 59,269,558 684,832 7,938,281 64,434,348 8,823,537 510,751,556 16,419,636 2,125,512 444,248,284 94,067,107 191,706,595 384,879,343 1,790,977,439

Common Pension Fund A — — — — — 56,600,129 5,005,961,988 — 5,905,287,272 436,301,099 — 6,406,663,017 — — — 17,810,813,505

Common Pension Fund B — — — — — 49,131,942 4,701,599,501 — 7,207,729,364 534,332,038 — 7,376,339,714 — — — 19,869,132,559

Common Pension Fund D — — — — — 48,122,001 3,861,236,828 — 4,730,929,141 320,147,504 — 5,145,681,772 — — — 14,106,117,246

Common Pension Fund E — — — — — 69,117,360 4,987,508,401 — 5,512,648,964 401,873,782 — 5,838,953,914 — — — 16,810,102,421

Common Stocks — — — — — — — — — — 152,251,163 — — — — 152,251,163

Mortgages — — — — — — 963,899,029 — — — — — — — — 963,899,029

U.S. government obligations — — — 371,746,092 — — — — — — — — — — — 371,746,092

Domestic equities — — — 1,117,461,645 — — — — — — — — — — — 1,117,461,645

International equities — — — 257,677,868 — — — — — — — — — — — 257,677,868

Other fixed income securities — — — 779,384,678 — — — — — — — — — — — 779,384,678

Total investments 1,232,900 1,837 4,394,113 2,585,539,841 684,832 230,909,713 19,584,640,095 8,823,537 23,867,346,297 1,709,074,059 154,376,675 25,211,886,701 94,067,107 191,706,595 384,879,343 74,029,563,645

Receivables:

Contributions:

Members — — — — — 71,376 47,526,660 — 53,075,058 776 269,583 75,493,466 (2,011,030) (2,501,870) (1,940,161) 169,983,858

Employers — — — — 32,146 — 984,397,141 — 1,984,946,060 76,940 — 73,048,240 8,273,382 65,782,035 38,782,620 3,155,338,564

Accrued interest and dividends — 1 22 1,178,243 — 38 3,942,398 8 2,633 148 279,536 3,196 — — — 5,406,223

Members’ loans — — — — — 912,566 366,063,933 — 548,926,942 20,077,382 — 233,473,666 — — — 1,169,454,489

Securities sold in transit — — — 160,230 — — 15,944,787 — — — — — — — — 16,105,017

Other 323,165 — 439,819 — — 136,497 5,792,569 — 7,201,606 62,372 — 3,360,296 969,629 1,116,142 1,361,894 20,763,989

Total receivables 323,165 1 439,841 1,338,473 32,146 1,120,477 1,423,667,488 8 2,594,152,299 20,217,618 549,119 385,378,864 7,231,981 64,396,307 38,204,353 4,537,052,140

Total assets $ 1,556,065 40,899 5,259,544 2,586,890,545 724,783 239,579,486 21,494,209,356 9,191,238 27,106,035,734 1,772,937,738 155,647,322 26,333,845,533 101,681,991 259,273,651 430,718,613 80,497,592,498

Liabilities:

Accounts payable and accrued expenses $ — 19,845 8,677 846,662 — 227 4,142,032 825 68,258,739 54,074 242,138 52,435,103 201,825,466 111,346,483 246,826,618 686,006,889

Retirement benefits payable — 21,054 392,007 — — 3,708,945 151,829,114 146,177 239,243,238 13,840,401 2,528,816 294,555,584 — — — 706,265,336

Non-contributory group insurance premiums payable — — — — 32,146 — 2,040,589 — 8,275,465 76,940 — 3,669,847 — — — 14,094,987

Securities lending collateral and rebates payable — — — — — 3,834,649 329,113,056 — 406,820,294 29,118,498 — 438,348,749 — — — 1,207,235,246

Total liabilities — 40,899 400,684 846,662 32,146 7,543,821 487,124,791 147,002 722,597,736 43,089,913 2,770,954 789,009,283 201,825,466 111,346,483 246,826,618 2,613,602,458

Net assets held in trust for pension and health benefits $ 1,556,065 — 4,858,860 2,586,043,883 692,637 232,035,665 21,007,084,565 9,044,236 26,383,437,998 1,729,847,825 152,876,368 25,544,836,250 (100,143,475) 147,927,168 183,891,995 77,883,990,040

The accompanying notes are an integral part of the financial statements.


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PENSION TRUST ANDSTATE HEALTH BENEFIT

PROGRAM FUNDS

Additions:Contributions:

Members $ 2,309,269,955Employers 6,908,072,723Other 4,251,107

Total contributions 9,221,593,785

Investment income:Net depreciation in fair value of investments (222,910,491)Interest 1,566,005,559Dividends 392,036,513

1,735,131,581

Less investment expense 13,056,983

Net investment income 1,722,074,598

Total additions 10,943,668,383

Deductions:Benefits 13,923,519,412Refunds of contributions 157,270,934Administrative and miscellaneous expenses 46,498,279

Total deductions 14,127,288,625

Change in net assets (3,183,620,242)

Net assets held in trust for pension and health benefits:Beginning of year 81,067,610,282

End of year $ 77,883,990,040



Statement of Changes in Fiduciary Net AssetsFiduciary Funds

Year ended June 30, 2012


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Combining Statement of Changes in Fiduciary Net AssetsFiduciary Funds — Pension Trust and State Health Benefit Program Funds


ALTERNATE CONSOLIDATED STATE HEALTH STATE HEALTH STATE HEALTH BENEFIT POLICE AND DEFINED POLICE AND PRISON PUBLIC STATE SUPPLEMENTAL TEACHERS’ BENEFIT BENEFIT BENEFIT

LONG-TERM CENTRAL FIREMEN’S DEFERRED CONTRIBUTION JUDICIAL FIREMEN’S OFFICERS’ EMPLOYEES’ POLICE ANNUITY PENSION AND PROGRAM PROGRAM PROGRAMDISABILITY PENSION PENSION COMPENSATION RETIREMENT RETIREMENT RETIREMENT PENSION RETIREMENT RETIREMENT COLLECTIVE ANNUITY FUND FUND FUND

FUND FUND FUND PLAN PLAN SYSTEM SYSTEM FUND SYSTEM SYSTEM TRUST FUND STATE LOCAL EDUCATION TOTAL

Additions:

Contributions:

Members $ — — — 178,243,724 — 2,476,205 374,688,168 — 793,993,077 23,233,207 6,346,823 685,608,357 152,051,630 43,109,391 49,519,373 2,309,269,955

Employers 3,323,165 168,000 193,183 — 487,559 6,061,953 842,084,854 — 997,437,885 13,578,328 — 323,100,685 1,691,931,065 932,727,716 2,096,978,330 6,908,072,723

Other — 22,155 3,234,585 — — — — 994,367 — — — — — — — 4,251,107

Total contributions 3,323,165 190,155 3,427,768 178,243,724 487,559 8,538,158 1,216,773,022 994,367 1,791,430,962 36,811,535 6,346,823 1,008,709,042 1,843,982,695 975,837,107 2,146,497,703 9,221,593,785

Investment income:

Net appreciation (depreciation) in fair value of investments (156) — (7,849) 9,688,428 (29) (690,294) (167,607,023) (3,095) (37,727,048) 3,328,478 2,432,656 (32,213,203) (23,086) (20,975) (67,295) (222,910,491)

Interest 4,288 119 12,882 2,796,491 794 4,386,655 434,578,261 15,406 548,086,658 36,281,421 6,637 538,363,291 209,428 391,077 872,151 1,566,005,559

Dividends — — — 7,545,870 — 1,273,929 105,876,587 — 125,621,507 9,401,158 3,502,131 138,815,331 — — — 392,036,513

4,132 119 5,033 20,030,789 765 4,970,290 372,847,825 12,311 635,981,117 49,011,057 5,941,424 644,965,419 186,342 370,102 804,856 1,735,131,581

Less: investment expense — — 4,823 196,104 — 16,076 1,351,653 2,366 7,407,519 95,312 — 3,983,130 — — — 13,056,983

Net investment income 4,132 119 210 19,834,685 765 4,954,214 371,496,172 9,945 628,573,598 48,915,745 5,941,424 640,982,289 186,342 370,102 804,856 1,722,074,598

Total additions 3,327,297 190,274 3,427,978 198,078,409 488,324 13,492,372 1,588,269,194 1,004,312 2,420,004,560 85,727,280 12,288,247 1,649,691,331 1,844,169,037 976,207,209 2,147,302,559 10,943,668,383

Deductions:

Benefits 3,323,165 189,481 5,046,645 118,211,742 85,280 45,955,546 1,862,401,613 1,950,804 2,900,539,904 163,065,369 17,890,338 3,538,617,490 1,957,384,329 979,913,607 2,328,944,099 13,923,519,412

Refunds of contributions — 793 — — — 45,641 7,551,462 — 108,618,263 143,320 — 40,911,455 — — — 157,270,934

Administrative and miscellaneous expenses — — 14,152 465,127 — 159,888 3,919,438 6,922 21,841,723 298,961 — 11,523,397 3,100,752 1,513,167 3,654,752 46,498,279

Total deductions 3,323,165 190,274 5,060,797 118,676,869 85,280 46,161,075 1,873,872,513 1,957,726 3,030,999,890 163,507,650 17,890,338 3,591,052,342 1,960,485,081 981,426,774 2,332,598,851 14,127,288,625

Net increase (decrease) 4,123 — (1,632,819) 79,401,540 403,044 (32,668,703) (285,603,319) (953,414) (610,995,330) (77,780,370) (5,602,091) (1,941,361,011) (116,316,044) (5,219,565) (185,296,292) (3,183,620,242)

Net assets held in trust for pension and health benefits:

Beginning of year 1,551,933 — 6,491,679 2,506,642,343 289,593 264,704,368 21,292,687,884 9,997,650 26,994,433,328 1,807,628,195 158,478,459 27,486,197,261 16,172,569 153,146,733 369,188,287 81,067,610,282

End of year $ 1,556,065 — 4,858,860 2,586,043,883 692,637 232,035,665 21,007,084,565 9,044,236 26,383,437,998 1,729,847,825 152,876,368 25,544,836,250 (100,143,475) 147,927,168 183,891,995 77,883,990,040




Notes to Financial StatementsJune 30, 2012

(1) DESCRIPTION OF THE FUNDS

The State of New Jersey sponsors and administers the following benefit funds which have been includedin the basic financial statements of the State of New Jersey Division of Pensions and Benefits (theDivision), collectively referred to as the Funds, Systems, and Trust:

Fiduciary Funds

PENSION TRUST AND STATE HEALTH BENEFIT PROGRAM FUNDS

Judicial Retirement System (JRS)Consolidated Police and Firemen’s Pension Fund (CPFPF)Police and Firemen’s Retirement System (PFRS)Prison Officers’ Pension Fund (POPF)Public Employees’ Retirement System (PERS)State Police Retirement System (SPRS)Teachers’ Pension and Annuity Fund (TPAF)Supplemental Annuity Collective Trust (SACT)Central Pension Fund (CPF)New Jersey State Employees Deferred Compensation Plan (NJSEDCP)Defined Contribution Retirement Program (DCRP)Alternate Benefit Long-Term Disability Fund (ABPLTD)State Health Benefit Program Fund (SHBP) - StateState Health Benefit Program Fund (SHBP) - LocalState Health Benefit Program Fund (SHBP) - Education

AGENCY FUNDS

Pension Adjustment Fund (PAF)Alternate Benefit Program Fund (ABP)Dental Expense Program Fund (DEP)

Stand alone financial reports, which include the above funds except for ABPLTD, CPF, and DCRP have beenprepared. These financial reports, which can be obtained from the Division of Pensions and Benefits, pro-vide a description of the nature and purpose of each individual fund. A description of the contributionrequirements and benefit provisions for each fund is provided in notes 5 and 6.

The pension trust funds are single-employer defined benefit pension plans, except for PERS and PFRS, which arecost-sharing multiple-employer defined benefit plans, TPAF and CPFPF, which are cost-sharing defined benefitplans with a special funding situation, and SACT, NJSEDCP, DCRP, and ABPLTD which are single-employer definedcontribution plans.

The Prescription Drug Program (PDP) of each respective SHBP are combined and reported as a trust fundwith the respective SHBP – State, SHBP – Local and SHBP – Education plans. The SHBP – State is classi-fied as a single-employer plan. The SHBP – Local and SHBP – Education are classified as cost-sharing mul-tiple-employer plans.


STATE OF NEW JERSEYDIVISION OF PENSIONS AND BENEFITSNotes to Financial Statements, Continued

June 30, 2012

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Division have been prepared in conformity with accounting principlesgenerally accepted in the United States of America as applied to governmental entities. GovernmentalAccounting Standards Board (GASB) is the accepted standard-setting body for establishing governmentalaccounting and financial reporting principles.

Reporting Entity

The financial statements include all funds which are administered by the Division over which operatingcontrols are with the individual funds, systems, or trust governing Boards and/or the State of New Jersey.The financial statements of the Funds, Systems, and Trust are included in the financial statements of theState of New Jersey; however, the accompanying financial statements are intended to present solely thefunds listed above which are administered by the Division and not the State of New Jersey as a whole.

Fund Accounting

The accounts of the Division are maintained in accordance with the principles of fund accounting to ensureobservance of limitations and restrictions on the resources available. The principles of fund accounting requirethat the resources be classified for accounting and reporting purposes into funds in accordance with activitiesor objectives specified for the resources. Each fund is a separate accounting entity with a self-balancing setof accounts.

Fiduciary Funds

Pension trust and health benefit program funds – Account for monies received for, expenses incurred byand the net assets available for plan benefits of the various public employee retirement systems andhealth benefit programs.

Agency funds – Agency funds are used to account for the assets that the Division holds on behalf of oth-ers as their agent. Agency funds are custodial in nature and do not involve measurement of results ofoperations.

Measurement Focus and Basis of Accounting

The accounting and financial reporting treatment applied to a fund is determined by its measurementfocus. All funds are accounted for using an economic resources measurement focus.

The accrual basis of accounting is used for measuring financial position and changes in net assets of thepension trust and health benefit program funds. Under this method, revenues are recorded in the account-ing period in which they are earned, and deductions are recorded at the time the liabilities are incurred.The financial statements of the pension trust funds conform to the provisions of GASB Statement No. 25,Financial Reporting for Defined Benefit Plans and Note Disclosures for Defined Contributions Plans. Thefinancial statements of the health benefit program funds conform to the provisions of the GASB StatementNo. 43, Other Post-Employment Benefits (OPEB). Employer contributions are recognized when payable tothe Funds. Benefits and refunds are recognized when due and payable in accordance with the terms ofthe Funds.



June 30, 2012

Capital Assets

Capital assets utilized by the Division include equipment which is owned by the State of New Jersey.

Significant Legislation

Chapter 78, P.L. 2011, effective June 28, 2011, made various changes to the manner in which theTeachers’ Pension and Annuity Fund (TPAF), the Public Employees’ Retirement System (PERS), the Policeand Firemen’s Retirement System (PFRS), the State Police Retirement System (SPRS) and the JudicialRetirement System (JRS) operate and to the benefit provisions of those systems.

Chapter 78’s provisions impacting employee pension and health benefits include:

• For new members of TPAF and PERS hired on or after June 28, 2011 (Tier 5 members), the years of cred-itable service needed for early retirement benefits increased from 25 to 30 years, and the early retirementage increased from 55 to 65.

• The eligibility age to qualify for a service retirement in the TPAF and PERS is increased from age 62 to 65for Tier 5 members.

• The annual benefit under special retirement for new PFRS members enrolled after June 28, 2011 (Tier 3members), decreased from 65% of final compensation to 60% of final compensation after 25 years ofservice and from 70% of final compensation to 65% of final compensation after 30 or more years of serv-ice.

• This legislation increased active member contribution rates as follows: TPAF and PERS active member ratesincreased from 5.5% of annual compensation to 6.5% plus an additional 1% phased in over 7 years; PFRSand PERS Prosecutors Part active member rates increased from 8.5% to 10%; SPRS active member ratesincreased from 7.5% to 9%; and JRS active member rates increase from 3% to 12% phased-in over sevenyears for members hired or reappointed on or after June 28, 2011. For fiscal year 2012, the member con-tribution rates increased in October 2011. The phase-in of the additional incremental member contribu-tion rates for TPAF, PERS and JRS members takes place in July of each subsequent fiscal year.

• The payment of automatic cost-of-living adjustment (COLA) additional increases to current and futureretirees and beneficiaries was suspended. COLA increases may be reactivated at a future date as permit-ted by this law.

• This legislation set new employee contribution requirements towards the cost of employer-providedhealth benefit coverage. Employees are required to contribute a certain percentage of the cost of cover-age. The rate of contribution is determined based on the employee’s annual salary and the selected levelof coverage. The increased employee contributions will be phased in over a 4-year period for thoseemployed prior to this legislation’s effective date with a minimum contribution required to be at least1.5% of salary.

• In addition, this legislation changed the method for amortizing the pension systems’ unfunded accruedliability from a level percent of pay method to a level dollar of pay method.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued



June 30, 2012

Membership and Contributing Employers

Membership and contributing employers of the pension trust funds consisted of the following at July 1,2011, the date of the most recent actuarial valuations. Membership of the health benefit program fundsfor OPEB is based on the valuation dated July 1, 2011, and its participating employer count is from theDivision’s data base as of June 30, 2012. Member counts of SACT, CPF, NJSEDCP, and ABPLTD are basedon the Division’s data base as of June 30, 2012:

JRS CPFPF PFRS POPF PERS SPRS

Retiree members:Retirees and beneficiaries

receiving benefits currently 522 310 38,036 142 148,085 2,818Terminated employees

entitled to benefits but not yet receiving them 3 — 55 — 1,133 —

Total retiree members 525 310 38,091 142 149,218 2,818

Active members:Vested 194 — 28,817 — 149,719 1,825Non-vested 212 — 13,182 — 142,107 1,019

Total active members 406 — 41,999 — 291,826 2,844

Total 931 310 80,090 142 441,044 5,662

Contributing Employers 1 69 586 1 1,706 1

TPAF SACT CPF NJSEDCP ABPLTD SHBP

Retiree members:Retirees and beneficiaries

receiving benefits currently 85,912 454 9 4,903 — 205,487Terminated employees

entitled to benefits but not yet receiving them 420 — — — — —

Total retiree members 86,332 454 9 4,903 — 205,487

Active members:Vested 83,178 3,104 — 40,232 153 389,609Non-vested 67,937 — — — — —

Total active members 151,115 3,104 — 40,232 153 389,609

Total 237,447 3,558 9 45,135 153 595,096

Contributing Employers 29 — 1 — 1 567




June 30, 2012

Membership in the agency funds administered by the Division consisted of the following as of June 30, 2012:

STATE LOCAL TOTAL

Dental Expense Program Fund* 116,691 53,326 170,017Alternate Benefit Program Fund** 19,204 3,021 22,225Pension Adjustment Fund 120,315 113,236 233,551

* Active and retired participants** Including those receiving long-term disability benefits

Investments

The Division of Investment, Department of the Treasury, State of New Jersey (Division of Investment)manages and invests certain assets of seven of the defined benefit plans (PERS, TPAF, JRS, PFRS, CPFPF,SPRS and POPF) and two defined contribution plans (SACT and NJSEDCP). The Division of Investment sep-arately reports the assets, liabilities and net assets of the underlying investment portfolio of the sevendefined benefit plans in its Pension Fund report and a SACT report. The Division of Investment accountsincluded in the Pension Fund report are: Common Fund A, Common Fund B, Common Fund D, CommonFund E, Police and Firemen’s Mortgage Program accounts and other investments owned directly by theseven defined benefit pension plans. Common Fund A invests primarily in domestic equity securities.Common Fund B invests primarily in domestic fixed income securities. Common Fund D invests primarilyin international equity and fixed income securities. Common Fund E invests primarily in alternativeinvestments which includes private equity, real estate, real assets, and absolute return strategy invest-ments. The Police and Firemen’s Retirement System includes a mortgage loan program administered bythe New Jersey Housing and Mortgage Finance Agency that provides participants with mortgages from theprogram at rates which are fixed by formula. The law establishing the program provides that the Fundmay not sell the mortgages, and no independent market exists for them.

Prudential Retirement is the third-party administrator for the NJSEDCP. Prudential Retirement providesrecordkeeping, administration services and access to 23 investments through a combination of their sep-arate account product offerings and retail branded mutual funds. The four state-managed investmentsoptions (DCP Bond Fund, DCP Equity Fund, DCP Small Cap Equity Fund and DCP Money Market Fund) areclosed to new investments. The Division of Investment is the fiduciary for the investments of the Plan.The Division of Pensions and Benefits maintains its administrative oversight functions for the Plan.

Investments are reported at fair value as follows:

• U.S. Government and Agency, Sovereign and Corporate obligations – prices quoted by a major dealerin such securities.

• Police and Firemen’s mortgages – estimated market prices obtained from independent brokers.

• Domestic and Foreign Equity Securities, Exchanged Traded Funds, Forward Foreign Exchange Contracts– closing prices as reported on the primary market or exchange on which they trade.

• Money Market Instruments – amortized cost which approximates fair value.

• Cash Management Fund – closing bid price on the last day of trading during the period as determinedby the Transfer Agent.




June 30, 2012

• Alternative investments (private equity, real estate, real asset, and absolute return strategy funds) –Fair values for the individual funds are based upon the net asset values for the funds at the closestavailable reporting date, adjusted for subsequent contributions, distributions, management fees andreserves. The valuation techniques vary based upon investment type and involve a certain degree ofexpert judgment. The most significant input into the net asset value of an entity is the value of itsinvestment holdings. The net asset value is provided by the general partner and/or investment man-ager and reviewed by management. The net asset values are audited annually. The strategy of privateequity and real estate funds are long term and illiquid in nature which can prevent the investmentfrom being readily marketable. Hedge funds may be subject to redemption restrictions which can limitdistributions and restrict the ability of a limited partner to exit a partnership. For alternative invest-ments, the realized value received upon the sale of these investments in the open market might bedifferent than the fair value reported in the accompanying financial statements.

Investment transactions are accounted for on a trade or investment date basis. Gains and losses frominvestment transactions are determined by the average cost method. Interest and dividend income isrecorded on the accrual basis, with dividends accruing on the ex-dividend date.

Securities Lending

The State Investment Council policies permit Common Funds A, B, D and E and several of the direct pen-sion plan portfolios to participate in securities lending programs, whereby securities are loaned to bro-kers or other borrowers and, in return, the pension funds have rights to the collateral received. All of thepublic traded securities held in Common Funds A, B, D and E, and certain securities held directly by thepension plans, are eligible for the securities lending program. Collateral received may consist of cash, let-ters of credit, or government securities having a market value equal to or exceeding 102% (U.S. dollardenominated) or 105% (non-U.S. dollar denominated) of the value of the loaned securities at the timethe loan is made. Collateral is marked to market daily and adjusted as needed to maintain the requiredminimum level.

Effective December 2010, for loans of U.S. government securities or sovereign debt issued by non-U.S.governments, in the event that the market value of the collateral falls below 100% of the market valueof the outstanding loaned securities to an individual borrower, or the market value of the collateral of allloans of such securities falls below the collateral requirement, additional collateral shall be transferred bythe borrower to the respective funds no later than the close of the next business day so that the marketvalue of such additional collateral together with collateral previously delivered meets the collateralrequirements.

For loans of all other types of securities, in the event that the market value of the collateral falls belowthe collateral requirement of either 102% or 105% (depending on whether the securities are denominat-ed in U.S. dollars or a foreign currency, respectively) of the market value of the outstanding loaned secu-rities to an individual borrower, additional collateral shall be transferred in an amount that will increasethe aggregate of the borrower’s collateral to meet the collateral requirements. As of June 30, 2012, theCommon Funds have no aggregate credit risk exposure to borrowers because the collateral amount heldby the Common Funds exceeded the market value of the securities on loan.

The contracts with the Common Funds’ securities lending agent require them to indemnify the CommonFunds if the brokers or other borrowers fail to return the securities and provides that collateral securitiesmay be sold in the event of a borrower default. The Common Funds are also indemnified for any loss of




June 30, 2012

principal or interest on collateral invested in repurchase agreements. The Common Funds cannot partici-pate in any dividend reinvestment program or vote with respect to any securities that are on loan on theapplicable record date. The securities loans can be terminated by notification by either the borrower orthe Common Funds. The term to maturity of the securities loans is generally matched with the term tomaturity of the investment of the cash collateral.

Derivatives

The Division of Investment, from time to time, utilizes forward foreign currency contracts, a derivativesecurity, as a means to hedge against currency risks in the Common Funds’ foreign equity and fixedincome portfolios.

Forward foreign currency contracts are agreements to buy or sell a specific amount of a foreign currencyat a specified delivery or maturity date for an agreed upon price.

The fair value of foreign forward currency contracts held directly by the Common Funds as of June 30,2012 was as follows:

Forward currency receivable $ 423,267,019Forward currency payable 420,869,210

Net unrealized gain $ 2,397,809

The Common Funds utilize covered call and put options in an effort to add value to or reduce the risklevel in the portfolio. Options are agreements that give the owner of the option the right, but not obli-gation, to buy (in the case of a call option) or to sell (in the case of a put option) a specific amount ofan asset for a specific price (called the strike price) on or before a specified expiration date. The CommonFunds enter into covered calls when its writes (or sells) call options on underlying stocks held by theCommon Funds or stock indices. The Common Funds enter into covered put options when it purchases putoptions on underlying stocks held by the Common Funds or stock indices. The Common Fund enters intoput spreads when it purchases put options while simultaneously writing put options on the same under-lying securities of indices at a lower strike price. The purchaser of put options pays a premium at the out-set of the agreement and stands to gain from an unfavorable change (i.e., a decrease) in the price of theinstrument underlying the option. The writer of call options receives a premium at the outset of theagreement and may bear the risk of an unfavorable change (i.e., an increase) in the price of the instru-ment underlying the option.

The Fund had written call options on 7,000,000 shares, and these options had a fair value of $5,570,000at June 30, 2012. The Fund owned 12,100 put option contracts with a fair value of $696,600 at June 30,2012.

Certain of the alternative investment funds and partnerships may use derivative instruments to hedgeagainst market risk and to enhance investment returns. At any point during the year, the Common Fundsmay have additional exposure to derivatives primarily through limited liability vehicles such as limitedpartnerships and commingled investment funds.

Members’ Loans

Members of JRS, PFRS, SPRS, PERS and TPAF who have at least three years of service in these Funds mayborrow up to 50% of their accumulated member contributions. Repayment of loan balances is deductedfrom payroll checks and bears a commercially reasonable interest rate as set by the State Treasurer. For




June 30, 2012

2012 the interest rate is 5.25%, and there is an $8 processing fee per loan. Members who retire with anoutstanding loan have the option of paying the loan in full prior to receiving any benefits or continuingtheir monthly loan payment schedule into retirement.

Administrative Expenses

Administrative expenses are paid by the Funds and the Systems to the State of New Jersey, Departmentof the Treasury and are included in the accompanying financial statements.

In certain funds (PFRS, PERS, SPRS and TPAF) miscellaneous expenses and reimbursements from the fundthat comprise various adjustments to member and employer accounts are incorporated into the adminis-trative expense amounts included in the accompanying financial statements. These miscellaneous itemsare not part of the supplementary information included in the Schedule of Administrative Expenses(Schedule 3). Additionally, State Health Benefit Program Fund – State, Local and Education administra-tive expenses are included in administrative expenses in the accompanying financial statements but arenot included in the supplementary information in Schedule 3.

Income Tax Status

Based on Internal Revenue Service (IRS) determination letters received in January 2012 for TPAF, PERS,POPF, JRS, and SPRS and in June 2012 for PFRS and CPFPF, the seven pension funds comply with the qual-ification requirements of the Internal Revenue Code (IRC). The ABP received a determination letter thatit complies with the qualification requirements of the IRC in September 2012.

The NJSEDCP is an eligible plan as described in Section 457 of the IRC.

Commitments

The Common Funds are obligated, under certain private equity, real estate and absolute return strategyalternative investment agreements to make additional capital contributions up to contractual levels overthe investment period specified for each investment. As of June 30, 2012, the Common Funds had unfund-ed commitments totaling approximately $7.6 billion.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principlesrequires management to make estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts of income and expense dur-ing the reporting period. Actual results could differ from those estimates.

Funded Status and Funding Progress

The required supplementary information regarding the funded status and funding progress is based onactuarial valuations which involve estimates of the value of reported amounts and assumptions about theprobability of events far into the future. These amounts are subject to continual revision as actual resultsare compared to past expectations and new estimates are made about the probability of future events.

The required schedule of funding progress presents multi-year trend information about whether the actu-arial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilityfor benefits.

Actuarial calculations reflect a long-term perspective and are based on the benefits provided under Statestatutes in effect at the time of each valuation and also consider the pattern of the sharing of costs



between the employer and members at that point in time. The projection of benefits for financial report-ing purposes does not explicitly incorporate the potential effects of legal or contractual funding limita-tions on the pattern of cost sharing between the employer and members in the future.

Actuarial Methods and Assumptions

In the revised July 1, 2011 actuarial valuations, the projected unit credit was used as actuarial costmethod, and the five year average of market value was used as asset valuation method for pension trustfunds. The actuarial assumptions included (a) 7.95% for investment rate of return for all the retirementsystems except POPF (5.00%) and CPFPF (2.00%) and (b) changes to projected salary increases, whichvary by fund and are presented on the following pages.

OPEB used the projected unit credit as actuarial cost method. The actuarial assumptions for OPEB includ-ed 4.50% for investment rate of return.


June 30, 2012




June 30, 2012

A summary of the significant actuarial methods and assumptions used by the Funds and Systems as of themost recent actuarial date of July 1, 2011 are as follows:

JRS CPFPF PFRS - State PFRS - Local POPF

Actuarial valuation date July 1, 2011 July 1, 2011 July 1, 2011 July 1, 2011 July 1, 2011

Actuarial value of assets $305,245,844 $8,126,894 $2,143,492,414 $21,027,839,958 $9,997,650

Actuarial accrued liability 585,700,787 9,179,981 3,926,525,679 26,978,632,188 5,096,792

Unfunded (overfunded)actuarial accrued liability 280,454,943 1,053,087 1,783,033,265 5,950,792,230 (4,900,858)

Funded ratio 52.1% 88.5% 54.6% 77.9% 196.2%

Covered payroll $67,437,125 N/A $526,058,270 3,123,358,027 N/A

Unfunded (overfunded)actuarial accrued liability as a percentage of covered payroll 415.9% N/A 338.9% 190.5% N/A

Actuarial cost methodProjected unit

creditProjected unit




credit

Asset valuation method5 year average of

market value5 year average of



market value Market value

Amortization method Level dollar, open Level dollar, closed Level dollar, open Level dollar, open Level dollar, closed

Remaining amortizationperiod 30 years 1 year 30 years 30 years 1 year

Actuarial assumptions:Interest rate 7.95% 2.00% 7.95% 7.95% 5.00%

Salary range 2.50% N/A 6.32% 6.32% N/A

Cost-of-livingadjustments 0.00% N/A 0.00% 0.00% N/A



SHBP - State SHBP - Local SHBP - Education

Actuarial valuation date July 1, 2011 July 1, 2011 July 1, 2011

Actuarial value of assets $ — $ — $ —

Actuarial accrued liability 18,077,800,000 11,127,000,000 30,871,900,000

Unfunded (overfunded) actuarial accrued liability 18,077,800,000 11,127,000,000 30,871,900,000

Funded ratio — — —

Covered payroll $7,491,835,889 $2,831,000,000 $12,794,864,111

Unfunded (overfunded) actuarial accrued liabilityas a percentage of covered payroll 241.3% 393.0% 241.3%

Actuarial cost method Projected unit credit Projected unit credit Projected unit credit

Amortization method Level dollar, open Level dollar, open Level dollar, open

Remaining amortization period 30 years 30 years 30 years

Actuarial assumptions:Interest rate

4.50% (assuming no prefunding)



Salary range N/A N/A N/A

Cost-of-living adjustments N/A N/A N/A

For medical benefits, the healthcare cost trend rate assumption initially is at 8.0% or 9.0% (depending on the medical plan)and decreases to a 5.0% long-term trend rate for all medical benefits after 6 or 8 years. For prescription drug benefits, the ini-tial healthcare cost trend rate assumption is 9.0% or 9.5% (depending on the retirement status), decreasing to a 5.0% long-term trend rate after 8 or 9 years. For Medicare Part B reimbursement, the healthcare cost trend rate assumption is 5.0%throughout 11 years.

PERS - State PERS - Local SPRS TPAF

Actuarial valuation date July 1, 2011 July 1, 2011 July 1, 2011 July 1, 2011

Actuarial value of assets $9,938,069,705 $18,996,299,489 $2,002,813,881 $32,289,888,420

Actuarial accrued liability 18,290,829,021 24,679,095,575 2,581,950,846 51,406,540,290

Unfunded (overfunded) actuarial accrued liability 8,352,759,316 5,682,796,086 579,136,965 19,116,651,870

Funded ratio 54.3% 77.0% 77.6% 62.8%

Covered payroll $4,608,926,826 $7,000,115,900 $275,219,752 $9,682,318,739

Unfunded (overfunded) actuarial accrued liability as a percentage of covered payroll 181.2% 81.2% 210.4% 197.4%

Actuarial cost method Projected unit credit Projected unit credit Projected unit credit Projected unit credit

Asset valuation method5 year average of




market value

Amortization method Level dollar, open Level dollar, open Level dollar, open Level dollar, open

Remaining amortization period 30 years 30 years 30 years 30 years

Actuarial assumptions:Interest rate 7.95% 7.95% 7.95% 7.95%

Salary range 4.52% 4.52% 3.45% 3.90%

Cost-of-living adjustments 0.00% 0.00% 0.00% 0.00%



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June 30, 2012

(3) INVESTMENTS

The pension funds’ investments as of June 30, 2012 are as follows:

Cash management funds $ 1,819,213,177Domestic equities 19,635,932,288International equities 13,943,748,903Domestic fixed income 15,012,944,491International fixed income* 2,877,198,257Bank loan funds 1,364,990,293Police and Firemen’s mortgages 963,899,029Private equity funds 5,488,969,238Real estate funds 3,106,708,016Absolute return strategy funds 5,547,000,728Real assets 1,448,241,708Put options 696,600U.S. government and agency obligations 371,746,092Other fixed income securities 779,384,678Other 1,697,125,885

$ 74,057,799,383* US dollar denominated securities

New Jersey state statute provides for a State Investment Council (Council) and a Director. Investmentauthority is vested in the Director of the Division of Investment and the role of the Council is to formu-late investment policies. The Council issues regulations which establish guidelines for permissible invest-ments which include domestic and international equities and exchange traded funds, covered call options,put options, equity futures contracts, obligations of the U.S. Treasury, government agencies, corporations,international governments and agencies, bank loans, interest rate swap transactions, credit default swaps,fixed income exchange traded funds, U.S. Treasury futures contracts, state and municipal general obliga-tions, public authority revenue obligations, collateralized notes and mortgages, commercial paper, cer-tificates of deposit, repurchase agreements, bankers acceptances, guaranteed income contracts, fundingagreements, money market funds, private equity funds, real estate funds, other real assets, absolutereturn strategy funds, and the State of New Jersey Cash Management Fund (CMF). The CMF is a short-termcash fund and is open to state and certain non-state participants.

The pension funds’ investment in the CMF is not evidenced by securities that exist in physical or bookentry form held by the pension funds.

Custodial credit risk, as it relates to investments, is the risk that in the event of the failure of the cus-todian, the pension funds will not be able to recover the value of investments or collateral securities thatare in the possession of the third-party. The pension funds’ investment securities are not exposed to cus-todial credit risk as they are held in segregated trust accounts in the name of the pension funds with thecustodians.

The Division’s investments are subject to various risks. Among these risks are credit risk, concentrationof credit risk, interest rate risk, and foreign currency risk. Each one of these risks is discussed in moredetail below.


Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.The credit risk of issuers and debt instruments is evaluated by nationally recognized statistical ratingagencies such as Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Corporation (S&P), andFitch Ratings (Fitch). Concentration of credit risk is the risk of loss attributed to the magnitude of aninvestment in a single issuer. There are no restrictions in the amount that can be invested in UnitedStates treasury and government agency obligations. Council regulations require minimum credit ratingsfor certain categories of fixed income obligations held directly by the pension funds and limit the amountthat can be invested in any one issuer or issue.


June 30, 2012

(3) INVESTMENTS, Continued

Category

Minimum Rating (1)

Limitation ofIssuer’s

Outstanding Debt/Stock

Limitation of Issue Other LimitationsMoody’s S&P Fitch

Bank loans Baa3 BBB- BBB- 10% — Not more than 10% of fundassets can be invested inthis category

Certificates of deposit andBanker’s acceptances:

DomesticInternational

A3/P-1Aa3/P-1

A-/A-1AA-/A-1

A-1/F1AA-/F1

——

——

Certificates of deposit andbanker’s acceptances can-not exceed 10% of issuer’sprimary capital

Collateralized notes and mort-gages

Baa3 BBB- BBB- — 25% Not more than 5% of fundassets can be invested inany one issue; not morethan 10% of fund assets(or 20% of Common FundB assets) can be investedin this category

Commercial paper P-1 A-1 F1 — — —

Corporate obligations Baa3 BBB- BBB- 10% 25% Not more than 5% of fundassets can be invested indebt and non-convertiblepreferred stock of oneissuer

Credit default swap transactions

A1 A+ A+ — — Nominal value of net expo-sure to any one counter-party shall not exceed 10%of fund assets

Guaranteed income contractsand funding agreements

A3 A- A- — — —

Interest rate swap transactions

A1 A+ A+ — — Notinal value of net exposureto any one counterpartyshall not exceed 10% offund assets

International corporate obligations

Baa3 BBB- BBB- 10% 25% Not more than 5% of fundassets can be invested indebt and non-convertiblepreferred stock of any oneissuer; not more than 10%of fund assets can beinvested in this category

International government andagency obligations

Baa3 BBB- BBB- 25% greater of 25%or $10 million

—



June 30, 2012

These credit ratings and limits are as follows:



(1) Short term ratings (e.g. P-1, A-1, F-1) are used for commercial paper and certificates of deposit.

Up to 5% of the market value of the combined assets of the pension and annuity funds may be investedin corporate obligations, international corporate obligations, collateralized notes and mortgages, bankloans, non-convertible preferred stock, and mortgage backed pass-through securities that do not meetthe minimum credit rating requirements set forth above.

Category

Minimum Rating (1)

Limitation ofIssuer’s

Outstanding Debt/Stock

Limitation of Issue Other LimitationsMoody’s S&P Fitch

Money market funds — — — — — Not more than 10% of fundassets can be invested inmoney market funds; lim-ited to 5% of shares orunits outstanding

Mortgage backed pass-through securities

A3 A- A- — — Not more than 5% of fundassets can be invested inany one issue

Mortgage backed senior debt securities

— — — — 25% Not more than 5% of fundassets can be invested inany one issue

Non-convertible preferredstocks of US corporations

Baa3 BBB- BBB- 10% 25% Not more than 5% of fundassets can be invested indebt and non-convertiblestock of any one corpora-tion

Public authority revenue obligations

A3 A- A- — 10% Not more than 2% of fundassets can be invested inany one public authority

Repurchase agreements Aa3 AA- AA- — — —

State & municipal obligations A3 A- A- 10% 10% Not more than 2% of fundassets can be invested indebt of any one politicalentity maturing more than12 months from purchase



June 30, 2012


The above tables do not include certain domestic and international corporate obligations including cer-tain exchange traded funds (ETFs) totaling $100,854,257 which invest in an underlying portfolio of fixedincome securities and do not have a Moody’s, Standard & Poor’s or Fitch rating. The above tables also donot include other fixed income securities totaling $137,755,123, Police and Firemen’s mortgages totaling$963,899,029 and the Cash Management Fund totaling $1,819,213,177, which are not rated.

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an invest-ment. Commercial paper must mature within 270 days. Certificates of deposits and bankers acceptancesare limited to a term of one year or less. Repurchase agreement must mature within 30 days. The invest-ment in guaranteed income contracts and funding agreements is limited to a term of 10 years or less.

(In thousands)

Moody’s Rating (1)

Aaa Aa A Baa Ba B Ca Caa P-1 Unrated Totals

Corporate obligations $857,119 957,096 3,388,551 3,818,700 351,083 487,079 835 171,336 — 7,915 $10,039,714

United States treasury tips 1,821,469 — — — — — — — — — 1,821,469

United States treasury bonds 1,000,470 — — — — — — — — — 1,000,470

Foreign government obligations 618,145 1,431,403 54,136 — — — — — — — 2,103,684

International corporate obligations 10,468 — 370,672 275,231 39,035 36,056 — 12,450 — — 743,912

Mortgages (FHLMC/FNMA/GNMA) 359,681 — — — — — — — — — 359,681

United States governmentstrips 583,671 — — — — — — — — — 583,671

Federal agency obligations 289,076 5,350 4,839 — — — — — — 13 299,278

SBA pass through certificates 158,841 — — — — — — — — — 158,841

Asset backed obligations 16,628 — — — — — — — — — 16,628

Other 94,370 813,743 244,900 20,097 1,238 — — — 43 130,137 1,304,528

$5,809,938 3,207,592 4,063,098 4,114,028 391,356 523,135 835 183,786 43 138,065 $18,431,876

Standard & Poor’s

(In thousands) A AA AAA B BB BBB CCC Totals

Corporate obligations $164,813 86,598 — 12,749 200 92,569 5,165 $362,094

International corporate obligations — 18,091 — 360 — — — 18,451

Other 17,653 53,759 56,587 — — — — 127,999

$182,466 158,448 56,587 13,109 200 92,569 5,165 $508,544


June 30, 2012

For securities in the fixed income portfolio, the following tables disclose aggregate market value, bymajor credit quality rating category as of June 30, 2012. The first table includes fixed income securitiesrated by Moody’s. The second table discloses S&P and Fitch ratings for fixed income securities not ratedby Moody’s.


(1) Subsequent to the June 30, 2011, Standard & Poor’s downgraded the United States credit rating to AA+ from its top rank of AAA, forthe first time in history.



The following table summarizes the maturities (or, in the case of Remics, Police and Firemen’s Mortgagesand mortgage-backed securities, the expected average life) of the fixed income portfolio as of June 30,2012:

(In thousands)Fixed Income Investment Type

Maturities in YearsTotal

Fair ValueLess

than 1 1-5 6-10More

than 10 UnknownCorporate obligations $31,984 937,849 3,889,721 5,580,517 — $10,440,071United States treasury inflation

index notes — 56,123 249,061 1,516,285 — 1,821,469United States treasury bonds 10,334 175,763 93,492 720,881 — 1,000,470Foreign government obligations — 156,880 1,136,294 828,601 — 2,121,775Police and firemen’s mortgage

program 43 1,962 6,556 955,338 — 963,899International corporate obligations — 44,736 265,402 445,286 — 755,424Mortgages (FHLMC/FNMA/GNMA) 9 2,505 — 357,167 — 359,681United States government strips — — — 583,671 — 583,671Federal agency obligations 389 12,896 190,266 95,728 — 299,279Asset backed obligations — — 16,628 51,441 — 68,069SBA pass through certificates — 5,461 153,380 — — 158,841Other (5,116) 28,262 26,433 1,249,270 133,677 1,432,526

$37,643 1,422,437 6,027,233 12,384,185 133,677 $20,005,175

The pension funds invest in global markets. Foreign currency risk is the risk that changes in exchange rates willadversely affect the fair value of an investment. The market value of international preferred and common stocksand issues convertible into common stocks, when combined with the market value of international government,agency and corporate obligations, cannot exceed 30% of the market value of the pension funds. The market valueof emerging market securities cannot exceed more than 1.5 times the percentage derived by dividing the totalmarket capitalization of companies included in the Morgan Stanley Capital International (MSCI) Emerging MarketIndex by the total market capitalization of the companies included in the MSCI All-Country World Ex-United StatesIndex of the total market value of the assets held by Common Fund D. Not more than 10% of the market valueof the emerging market securities can be invested in the common and preferred stock of any one corporation.The total amount of stock purchased of any one corporation cannot exceed 5% of its stock classes eligible tovote. Council regulations permit the pension funds to enter into foreign exchange contracts for the purpose ofhedging the international portfolio. The pension funds held forward contract receivables totaling approximately$423.3 million and payables totaling approximately $420.9 million (with a $2.4 million net gain) as of June 30,2012. At June 30, 2012, the credit ratings of the counterparties to the forward currency contracts had Moody’scredit ratings of no less than A3.


June 30, 2012


The pension funds had the following foreign currency exposure as of June 30, 2012 (expressed in U.S.dollars):

The pension funds’ interests in alternative investments may contain elements of credit, currencyand market risk. Such risks include, but are not limited to, limited liquidity, absence of regulatoryoversight, dependence upon key individuals, speculative investments (both derivatives and nonmar-ketable investments), and nondisclosure of portfolio composition. Effective April 18, 2011, Councilregulations provide that not more than 38% of the market value of the pension funds can be invest-ed in alternative investments, with limits on the individual investment categories of real estate(9%), real assets (7%), private equity (12%) and absolute return strategy (15%). Prior to that, theoverall limitation was 28% with a 7% limit on each of the individual categories. Not more than 5%of the market value of Common Fund E, plus outstanding commitments, may be committed to any


Currency EquitiesAlternativeInvestments

TotalFair Value

Australian dollar $404,954,100 — $404,954,100Brazilian real 172,762,675 — 172,762,675Canadian dollar 991,983,602 — 991,983,602Czech koruna 2,569,245 — 2,569,245Danish krone 98,951,145 — 98,951,145Egyptian pound 20,429,588 — 20,429,588Euro 1,683,268,961 360,483,508 2,043,752,469Hong Kong dollar 539,735,532 — 539,735,532Hungarian forint 18,229,565 — 18,229,565Indonesian rupiah 78,369,584 — 78,369,584Israeli shekel 7,460,574 — 7,460,574Japanese yen 1,987,321,673 — 1,987,321,673Malaysian ringgit 37,963,637 — 37,963,637Mexican peso 43,985,670 — 43,985,670New Russian ruble 9,029 — 9,029New Taiwan dollar 13,881,976 — 13,881,976Norwegian krone 107,943,230 — 107,943,230Pakistan rupee 7,436,961 — 7,436,961Philippine peso 29,410,532 — 29,410,532Polish zloty 19,937,010 — 19,937,010Pound sterling (U.K.) 1,281,290,826 12,365,673 1,293,656,499Singapore dollar 219,170,282 — 219,170,282South African rand 148,253,090 — 148,253,090South Korean won 303,591,860 — 303,591,860Swedish krona 358,068,695 — 358,068,695Swiss franc 716,172,117 — 716,172,117Thailand baht 66,034,370 — 66,034,370Turkish lira 78,725,503 — 78,725,503US dollar 235,152,888 — 235,152,888Unknown 1,481,257 — 1,481,257

$9,674,545,177 372,849,181 $10,047,394,358


June 30, 2012



June 30, 2012

one partnership or investment, without the prior written approval of the Council. The investments inCommon Fund E cannot comprise more than 20% of any one investment manager’s total assets.

At June 30, 2012, Other Receivables included $299 million related to the secondary sale of certain privateequity funds which is due from the purchasers in December 2013.

(4) SECURITIES LENDING COLLATERAL

The securities lending collateral is subject to various risks. Among these risks are custodial credit risk, cred-it risk, concentration of credit risk, and interest rate risk. The pension funds did not lend securities fromJuly through December 2010. As of December 2010, securities lending collateral is invested in repurchaseagreements, the maturities of which cannot exceed 30 days. The collateral for repurchase agreements is lim-ited to obligations of the U.S. Government or certain U.S. Government agencies, collateralized notes andmortgages and corporate obligations meeting certain minimum rating criteria. Total exposure to any indi-vidual issuer is limited consistent with internal policies for funds managed by the Division of Investment.

For securities exposed to credit risk in the collateral portfolio, the following table discloses aggregate fairvalue, by major credit quality rating category as of June 30, 2012.

Custodial credit risk for investments is the risk that in the failure of the counterparty to the transaction,the pension funds will not recover the value of the investments that are in the possession of an outsideparty. The repurchase agreement’s underlying securities are held in the pension funds’ name.

As of June 30, 2012, the pension funds had outstanding loaned investment securities with an aggregatemarket value of $1,202,238,220 and did not hold any non-cash collateral. There were no borrowers orlending agent default losses, and no recoveries or prior period losses during the year.


(In thousands)Rating

Aaa/AAA Not Rated TotalsRepurchase agreements $1,203,274 — $1,203,274Cash — 3,889 3,889

$1,203,274 3,889 $1,207,163



June 30, 2012

(5) CONTRIBUTIONS

Contribution Requirements – JRS

The contribution policy is set by N.J.S.A. 43:6A and requires contributions by active members andthe State of New Jersey. Plan member and employer contributions may be amended by State of NewJersey legislation. Members enrolled on January 1, 1996 or after, contribute at 3% on their entirebase salary. Contributions by active members enrolled prior to January 1, 1996 are based on 3% ofthe difference between their current salary and the salary of the position on January 18, 1982.Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate will beincreased from 3% to 12%, phased-in over seven years for members hired or reappointed after June28, 2011. For fiscal year 2012, the member contribution rate for new members increased in October2011. The phase-in of the additional incremental member contribution rate will take place in July ofeach subsequent fiscal year. The State of New Jersey contribution amount is based on an actuarial-ly determined rate. The annual employer contributions include funding for basic retirementallowances, cost-of-living adjustments and non-contributory death benefits.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribu-tion, defined as 1/7th of the required amount, beginning in fiscal year 2012. The State made a con-tribution of $5.5 million, excluding the State’s contribution of non-contributory group life insurance(NCGI) of $0.5 million, for fiscal year 2012. The amount contributed for fiscal year 2012 is equal to12.9% of the actuarially determined statutory amount of Annual Required Contribution (ARC) andequal to 14.3% if the budgetary recommended contribution amount.

Contribution Requirements – CPFPF

There are no active members in the CPFPF.

The State made a contribution of $0.2 million. Local employers contributed $19.2 thousand repre-senting administrative fees billed to various locations in fiscal year 2012.

Contribution Requirements – PFRS

The contribution policy is set by N.J.S.A. 43:16A and requires contributions by active members andcontributing employers. Plan member and employer contributions may be amended by State of NewJersey legislation. Employers’ contribution amounts are based on an actuarially determined rate. Theannual employer contributions include funding for basic retirement allowances, cost-of-living adjust-ments, and non-contributory death benefits. Members contribute at a uniform rate of 8.5% of basesalary. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rateincreased from 8.5% to 10% in October 2011.

Chapter 19, P.L. 2009, effective March 17, 2009, provided an option for local employers to contribute50% of the normal and accrued liability contribution amounts certified by PFRS for payments due inState fiscal year 2009. This law also provided that a local employer may pay 100% of the requiredcontribution. Such an employer will be credited with the full payment and any such amounts will notbe included in their unfunded liability. The actuaries for PFRS will determine the unfunded liabilityof those retirement systems, by employer, for the reduced normal and accrued liability contributions



June 30, 2012

provided under this law. This unfunded liability will be paid by the employer in level annual paymentsover a period of 15 years beginning with the payments due in the State fiscal year ending June 30, 2012and will be adjusted by the rate of return on the actuarial value of assets.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribution,defined as 1/7th of the required amount, beginning in fiscal year 2012. The State made this contribu-tion of $53.6 million which is equal to 12.9% of the actuarially determined amount of the ARC and 14.3%if the budgetary recommended amount. Also, the State contributed $5.6 million for NCGI and $0.3 mil-lion for miscellaneous items due to the system.

The local employers’ contribution amounts include the billing for their pension, NCGI, Early RetirementIncentive (ERI) contributions for those who participate in the various ERI programs, and other miscella-neous items that are due to the system. For fiscal year 2012, the amount accrued for the annual appro-priation billings due April 1, 2013 is $781.2 million.

Contribution Requirements – POPF

There are no active members in the POPF. Accordingly, based on actuarial valuation, there is no normalcost or accrued liability contribution required by employers for fiscal year 2012.

Contribution Requirements – PERS

The contribution policy is set by N.J.S.A. 43:15A and requires contributions by active members and con-tributing employers. Plan member and employer contributions may be amended by State of New Jerseylegislation. Members contribute at a uniform rate. The full normal employee contribution rate became5.5% of annual compensation, effective July 1, 2007 for most PERS state employees and effective July1, 2008 for PERS local employees, based on Chapter 103, P.L. 2007. The rate for members who are eligi-ble for the Prosecutors Part of PERS (Chapter 366, P.L. 2001) is 8.5% of base salary effective July 1, 2008.Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate increased from5.5% of annual compensation to 6.5% plus an additional 1% phased-in over 7 years beginning in fiscalyear 2013. The rate for members who are eligible for the Prosecutors Part of PERS (Chapter 366, P.L. 2001)increased from 8.5% of base salary to 10%. For fiscal year 2012, the member contribution rate increasedin October 2011. The phase-in of the additional incremental member contribution rate will take place inJuly of each subsequent fiscal year. Employers’ contribution amounts are based on an actuarially deter-mined rate. The annual employer contributions include funding for basic retirement allowances, cost-of-living adjustments, and non-contributory death benefits.

Chapter 19, P.L. 2009, effective March 17, 2009, provided an option for local employers to contribute50% of the normal and accrued liability contribution amounts certified by PERS for payments due in Statefiscal year 2009. This law also provided that a local employer may pay 100% of the required contribu-tion. Such an employer will be credited with the full payment and any such amounts will not be includ-ed in their unfunded liability. The actuaries for PERS will determine the unfunded liability of thoseretirement systems, by employer, for the reduced normal and accrued liability contributions providedunder this law. This unfunded liability will be paid by the employer in level annual payments over a peri-

(5) CONTRIBUTIONS, Continued


od of 15 years beginning with the payments due in the State fiscal year ending June 30, 2012 and willbe adjusted by the rate of return on the actuarial value of assets.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribution,defined as 1/7th of the required amount, beginning in fiscal year 2012. The State made this contribu-tion of $124.9 million which is equal to 12.8% of the actuarially determined amount of the ARC and14.3% of the budgetary recommended amount. Also, the State contributed $29.8 million for NCGI, $1.8million for miscellaneous items due to the system, and $53.0 million for the current year present valueof the State’s ERI liability.

The local employers’ contribution amounts include the billing for their pension, NCGI, Early RetirementIncentive (ERI) contributions for those who participate in the various ERI programs, and other miscella-neous items that are due to the system. For fiscal year 2012, the amount accrued for the annual appro-priation billings due April 1, 2013 is $784.7 million.

Contribution Requirements – SPRS

The contribution policy is set by N.J.S.A. 53:5A and requires contributions by active members and theState of New Jersey. Plan member and employer contributions may be amended by State of New Jerseylegislation. Members contribute at a uniform rate of 7.5% of base salary. Pursuant to the provisions ofChapter 78, P.L. 2011, the active member contribution rate increased from 7.5% to 9% in October 2011.The State of New Jersey contribution amount is based on an actuarially determined rate. The annualemployer contributions include funding for basic retirement allowances, cost-of-living adjustments andnon-contributory death benefits.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribution,defined as 1/7th of the required amount, beginning in fiscal year 2012. The State made a contributionof $12.8 million, excluding the State’s contribution of NCGI of $0.7 million, for fiscal year 2012. Theamount contributed for fiscal year 2012 is equal to 13.0% of the actuarially determined statutory amountof ARC and equal to 14.3% of the budgetary recommended contribution amount.

Contribution Requirements – TPAF

The contribution policy is set by N.J.S.A. 18A:66 and requires contributions by active members and con-tributing employers. Plan member and employer contributions may be amended by State of New Jerseylegislation. The full normal employee contribution rate became 5.5% of annual compensation, effectiveJuly 1, 2007 based on Chapter 103, P.L. 2007. Pursuant to the provisions of Chapter 78, P.L. 2011, theactive member contribution rate increased from 5.5% of annual compensation to 6.5% plus an addition-al 1% phased-in over 7 years beginning in fiscal year 2013. For fiscal year 2012, the member contribu-tion rate increased in October 2011. The phase-in of the additional incremental member contribution ratewill take place in July of each subsequent fiscal year. The State of New Jersey contribution amount isbased on an actuarially determined rate. The annual employer contributions include funding for basicretirement allowances, cost-of-living adjustments, and non-contributory death benefits.

Chapter 1, P.L. 2010, effective May 21, 2010, required the State to make its full pension contribution,defined as 1/7th of the required amount, beginning in fiscal year 2012. The State made this contribu-tion of $287.5 million which is equal to 12.7% of the actuarially determined amount of the ARC and


June 30, 2012




June 30, 2012

14.3% of the budgetary recommended amount. Also, the State contributed $30.8 million for NCGI, $2.8million for miscellaneous items due to the system, and $2.0 million for the current year present value ofthe State’s ERI liability.

Contribution Requirements – SACT

Participants contribute through payroll deductions and may contribute from 1% to 100% of their basesalary, as defined. Contributions are voluntary and may be suspended at the beginning of any quarter.Contributions under the Tax Sheltered Supplemental Annuity Plan are subject to Federal law limitationsand qualify for tax-sheltered treatment permitted under Section 403(b) of the Internal Revenue Code.Participants are always fully vested for the accumulated units in their accounts.

Contribution Requirements – CPF

The State of New Jersey makes an annual appropriation payment to the CPF to pay current year benefits.The contribution requirements were established by the aforementioned statutes and are not actuariallydetermined.

The contribution amount required and paid by the State of New Jersey for the fiscal year ended June 30,2012 was $168.0 thousand.

Contribution Requirements – SHBP – State (including PDP – State)

Contributions to pay for the health premiums of participating employees in the SHBP – State are collect-ed from the State of New Jersey, active and retired members, and former active and retired members whohave elected to participate under the rules of COBRA. The State of New Jersey provides contributions forState employees through State appropriations. These appropriations are generally distributed to the SHBPon a monthly basis. Active and retired member contributions are generally received on a monthly basis.Certain State employees share in the cost of their premiums, as provided by Chapter 8, P.L. 1996.

Under the provisions of Chapter 8, P.L. 1996, the SHBP implemented premium sharing for employees cov-ered under the State component of the program. Chapter 8 authorizes the State to negotiate premiumsharing in the collective bargaining agreements governing employment of State employees. Premiumsharing also applies to retired group coverage for employees who attain 25 years of creditable pensionservice after July 1, 1997 or who retire on a disability retirement after that same date. Those employeesnot represented by any bargaining unit premium share in accordance with rules established by the StateHealth Benefits Commission.

Contributions to pay for the premiums of participating employees in the PDP are collected from the Stateof New Jersey, and former active and retired members who have elected to participate under the rules ofCOBRA. The State of New Jersey provides contributions for State employees through State appropriations.These appropriations are distributed to the PDP on a monthly basis.

The State of New Jersey’s contribution also includes funding for the cost of medical premiums after retire-ment for qualified retirees. In accordance with Chapter 62, P.L. 1994, post-retirement medical (PRM) ben-efits have been funded on a pay-as-you-go basis since 1994. Prior to 1994, medical benefits were fundedon an actuarial basis.




June 30, 2012

The State made a contribution of $1.7 billion, including administrative revenue of $3.8 million, for fis-cal year 2012.

Chapter 103, P.L. 2007 implemented changes to SHBP and established an employee contribution of 1.5%of the employee’s base salary for State employees, effective July 1, 2007.

Chapter 2, P.L. 2010, effective May 21, 2010, requires a minimum contribution of 1.5% of base salarytoward the cost of health care benefits coverage by all active public employees. Employees of the State,local governments, and boards of education who become a member of a State or locally-administeredretirement system on or after the law’s effective date would be required to pay in retirement 1.5% of theirpension benefit toward the cost of health care coverage under the SHBP.

Chapter 78, P.L. 2011, effective June 28, 2011, established new employee contribution requirementstowards the cost of employer provided health benefit coverage. Employees are required to contribute acertain percentage of the cost of coverage. The rate of contribution is determined based on the employ-ee’s annual salary and the selected level of coverage. The increased employee contributions will be phasedin over a 4-year period for those employed prior to Chapter 78’s effective date with a minimum contri-bution required to be at least 1.5% of salary. For those employed on or after June 28, 2011, the 4-yearphase-in does not apply, and contributions based on the full percentage rate of contribution are required.Under Chapter 78, certain future retirees eligible for employer-paid health care coverage at retirement arealso required to pay a percentage of the cost of their medical coverage determined on the basis of theirannual retirement benefit.

Contribution Requirements – SHBP – Local (including PDP – Local)

Contributions to pay for the health premiums of participating employees in the SHBP – Local are collect-ed from the State of New Jersey, participating local employers, active members and retired members.Local employer payments and active and retired member contributions are generally received on a month-ly basis.

Local group employees are not affected by the premium sharing provisions of Chapter 8, P.L. 1996.

Contributions to pay for the premiums of participating employees in the PDP are collected from partici-pating local employers, and former active and retired members who have elected to participate under therules of COBRA. Local employer payments as well as COBRA contributions are also received on a monthlybasis.

Local employers participating in the SHBP – Local made a contribution of $932.7 million, includingadministrative revenue of $2.0 million, for fiscal year 2012.

State of New Jersey contribution to the SHBP – Local is to fund the cost of medical premiums after retire-ment for qualified retirees in the PFRS. In accordance with Chapter 62, P.L. 1994, post-retirement med-ical (PRM) benefits have been funded on a pay-as-you-go basis since 1994. Prior to 1994, medicalbenefits were funded on an actuarial basis.

Chapter 2, P.L. 2010, effective May 21, 2010, requires a minimum contribution of 1.5% of base salarytoward the cost of health care benefits coverage by all active public employees. Employees of the State,local governments, and boards of education who become a member of a State or locally-administered




June 30, 2012


retirement system on or after the law’s effective date would be required to pay in retirement 1.5% of theirpension benefit toward the cost of health care coverage under the SHBP.

Chapter 78, P.L. 2011, effective June 28, 2011, established new employee contribution requirementstowards the cost of employer provided health benefit coverage. Employees are required to contribute acertain percentage of the cost of coverage. The rate of contribution is determined based on the employ-ee’s annual salary and the selected level of coverage. The increased employee contributions will be phasedin over a 4-year period for those employed prior to Chapter 78’s effective date with a minimum contri-bution required to be at least 1.5% of salary. For those employed on or after June 28, 2011, the 4-yearphase-in does not apply, and contributions based on the full percentage rate of contribution are required.Under Chapter 78, certain future retirees eligible for employer-paid health care coverage at retirement arealso required to pay a percentage of the cost of their medical coverage determined on the basis of theirannual retirement benefit.

Contribution Requirements – SHBP – Education (including PDP – Education)

Contributions to pay for the health premiums of participating employees in the SHBP – Education are col-lected from the State of New Jersey, participating local employers, active members and retired members.Local employer payments and active and retired member contributions are generally received on a month-ly basis.

Local group employees are not affected by the premium sharing provisions of Chapter 8, P.L. 1996.

Contributions to pay for the premiums of participating employees in the PDP are collected from partici-pating local employers, and former active and retired members who have elected to participate under therules of COBRA. Local employer payments as well as COBRA contributions are also received on a monthlybasis.

Local employers participating in the SHBP – Education made a contribution of $2.1 billion, includingadministrative revenue of $4.8 million, for fiscal year 2012.

State of New Jersey contribution to the SHBP – Education is to fund the cost of medical premiums afterretirement for qualified retirees in the PERS, TPAF and ABP. In accordance with Chapter 62, P.L. 1994,post-retirement medical (PRM) benefits have been funded on a pay-as-you-go basis since 1994. Prior to1994, medical benefits were funded on an actuarial basis.

Chapter 2, P.L. 2010, effective May 21, 2010, requires a minimum contribution of 1.5% of base salarytoward the cost of health care benefits coverage by all active public employees. Employees of the State,local governments, and boards of education who become a member of a State or locally-administeredretirement system on or after the law’s effective date would be required to pay in retirement 1.5% of theirpension benefit toward the cost of health care coverage under the SHBP.

Chapter 78, P.L. 2011, effective June 28, 2011, established new employee contribution requirementstowards the cost of employer provided health benefit coverage. Employees are required to contribute acertain percentage of the cost of coverage. The rate of contribution is determined based on the employ-ee’s annual salary and the selected level of coverage. The increased employee contributions will be phasedin over a 4-year period for those employed prior to Chapter 78’s effective date with a minimum contri-


bution required to be at least 1.5% of salary. For those employed on or after June 28, 2011, the 4-yearphase-in does not apply, and contributions based on the full percentage rate of contribution are required.Under Chapter 78, certain future retirees eligible for employer-paid health care coverage at retirement arealso required to pay a percentage of the cost of their medical coverage determined on the basis of theirannual retirement benefit.

Contribution Requirements – NJSEDCP

Participants may defer between 1% and 100% of their salary and less any 414(h) reductions or $17.0thousand annually. Under the limited “catch-up” provision, a participant may be eligible to defer up toa maximum of twice the annual maximum in the three years immediately preceding the retirement age atwhich no reduction in benefits would be applicable. The employer does not make contributions to thePlan.

Contribution Requirements – DCRP

The DCRP was established for elected and certain appointed officials by Chapter 92, P.L. 2007, effectiveJuly 1, 2007. State and local government employers contribute 3% of the employees’ base salary. Activemembers contribute 5.5% of base salary.

Chapter 103, P.L. 2007, effective July 1, 2007, imposed an annual maximum wage contribution base(equivalent to the annual maximum wage base for Social Security deductions) to new employees (Tier 2)of the TPAF and the PERS. This provision was extended by Chapter 1, P.L. 2010, effective May 21, 2010,to new employees (Tier 2) of the PFRS and the SPRS. Based on Chapter 89, P.L. 2008, effective November2, 2008, new employees with a base salary between $5,000 and the current minimum TPAF and PERS Tier3 salary are eligible for participation in the DCRP. Also, based on Chapter 1, P.L. 2010, effective May 21,2010, new employees who would otherwise be eligible to participate in TPAF and PERS (Tier 4 and Tier5) and do not work the minimum required hours but earn a base salary of at least $5,000 are eligible forparticipation in the DCRP.

Contribution Requirements – ABPLTD

The State of New Jersey makes an annual contribution to the ABPLTD, as required, toward the cost oflong-term disability benefits which extend beyond the calendar year following the year in which the dis-ability benefits commence for those with a benefit commencement date on or after October 1, 1986.

The State made a contribution of $3.3 million for fiscal year 2012.

Contribution Requirements – ABP

Members contribute a mandatory 5% of base or contractual salary that is tax deferred under the 414(h)provisions of the Internal Revenue Code. Members are also permitted to make voluntary federal tax-deferred contributions under Internal Revenue Code Section 403(b). The State of New Jersey pays theemployer contribution for all State and county employees participating in the plan. The employer contri-bution is based on 8% of base or contractual salary. The State of New Jersey is also responsible for thecost of non-contributory life insurance coverage and disability coverage for its plan members.


June 30, 2012



The State made a contribution of $153.0 million, excluding NCGI of $16.3 million and short-term disabil-ity of $1.2 million, for fiscal year 2012.

Contribution Requirements – PAF

The contribution requirements were established by N.J.S.A. 43:3B-4. The State of New Jersey is requiredto make an annual appropriation payment to fund the cost-of-living increases payable to retirees and ben-eficiaries of retired members in the CPFPF, POPF and CPF. Funding is on a pay-as-you-go basis.

The State made a contribution of $1.2 million for fiscal year 2012.

Contribution Requirements – DEP – State and Local

Contributions to pay for the premiums of participating employees in the Dental Expense Program Fundare collected from the State of New Jersey, local governmental and educational employers, active employ-ees, and former and retired members who have elected to participate under the rules of COBRA. The costof the premiums is shared by the State of New Jersey and active State employees. Former and retiredemployees who have chosen to participate under the rules of COBRA pay the full cost of the premium.The employers are billed for the full cost of coverage. The State of New Jersey provides contributionsthrough State appropriations. These appropriations are distributed to the DEP on a biweekly and month-ly basis. The active member share of the cost of premiums, which is included in the billing to the employ-ers, is paid to the State on a biweekly and monthly basis. Members participating under COBRA remit theirpayments on a monthly basis. Retirees pay 100% of the overall dental cost.

The State made a contribution of $37.9 million, excluding administrative revenue of $5.4 thousand, forfiscal year 2012. The local contribution was $2.7 million for fiscal year 2012.

(6) VESTING AND BENEFITS

Vesting and Benefit Provisions - JRS

The vesting and benefit provisions are set by N.J.S.A. 43:6A and amended and supplemented by Chapter 470,P.L. 1981. The JRS provides retirement benefits as well as death and disability benefits. Retirement benefitsfor age and years of service are as follows:


June 30, 2012


AgeYears of

judicial service

Benefit as a percentage of final salary

70 10 75%

65 15 75%

60 20 75%

AgeYears of

judicial serviceYears of public and

judicial service

Benefit as a percentage of final salary

65 5 15 50%

60 5 20 50%



June 30, 2012

Retirement benefits are also available at age 60 with five years of judicial service plus 15 years in theaggregate of public service, or at age 60 while serving as a judge with the benefit determined to be 2%of final salary, as defined, for each year of public service up to 25 years plus 1% of final salary for eachyear in excess of 25 years. Deferred and early retirement benefits are also available.

Eligible retirees receiving monthly benefits are entitled to cost-of-living adjustment (COLA) increasesequal to 60% of the change in the average consumer price index for the calendar year in which the pen-sioner retired, as compared to the average consumer price index for a 12-month period ending with eachAugust 31st immediately preceding the year in which the adjustment becomes payable. The regular retire-ment allowance is multiplied by the 60% factor as developed and results in the dollar amount of theadjustment payable. Retired members become eligible for pension adjustment benefits after 24 monthsof retirement. Pursuant to the provisions of Chapter 78, P.L. 2011, COLA increases are suspended for allcurrent and future retirees of all retirement systems. No further COLA increases will be granted. The lawdoes not reduce any COLA increases that have already been added to retiree benefits.

Vesting and Benefit Provisions – CPFPF

The vesting and benefit provisions are set by N.J.S.A. 43:16. The CPFPF provides retirement as well asdeath and disability benefits to any active member after 25 years of service. A member may retire at age60 after 25 years of service. Retirement is mandatory at age 65, except for chiefs of police, who may retireat age 70. Benefits are generally determined to be 60% of final salary, as defined, plus 1% for each cred-itable year of service, as defined, in excess of 25 years, but not to exceed 30 years.

Chapter 4, P.L. 2001 provided increased benefits to certain members who retired prior to December 29,1989 with at least 25 years of creditable service. The maximum amount of the increase was 5% of theretiree’s final compensation. For those with 30 or more years of service, the total pension benefit wouldincrease from 65% to 70% of final compensation.

Vesting and Benefit Provisions – PFRS

The vesting and benefit provisions are set by N.J.S.A. 43:16A and 43:3B. The PFRS provides retirement aswell as death and disability benefits. All benefits vest after ten years of service, except disability bene-fits which vest after four years of service. Retirement benefits for age and service are available at age 55and are generally determined to be 2% of final compensation for each year of creditable service, asdefined, up to 30 years plus 1% for each year of service in excess of 30 years. Final compensation equalsthe compensation for the final year of service prior to retirement. Members may seek special retirementafter achieving 25 years of creditable service or they may elect deferred retirement after achieving tenyears of service, in which case benefits would begin at age 55 equal to 2% of final compensation for eachyear of service. The annual benefit under special retirement is 65% of the member’s final compensationplus 1% for each year of creditable service over 25 years but not to exceed 30 years. The maximumallowance is therefore 70% of final compensation. Pursuant to the provisions of Chapter 78, P.L. 2011,the annual benefit under special retirement for members enrolled after June 28, 2011 (Tier 3 members),is 60% of the member’s final compensation plus 1% for each year of creditable service over 25 years butnot to exceed 30 years. The maximum allowance is therefore 65% of final compensation.

Widow/widowers of members retired since December 18, 1967 receive 50% of the retiree’s final compen-

(6) VESTING AND BENEFITS, Continued


sation. The minimum annual widow/widower’s benefits of an accidental disability retiree prior toDecember 18, 1967 and of all retirees since December 18, 1967 is $4,500.

Members are always fully vested for their own contributions. In the case of death before retirement, mem-bers’ beneficiaries are entitled to full payment of members’ contributions providing no survivor death ben-efits are payable.

Eligible retirees receiving monthly benefits are entitled to cost-of-living adjustment (COLA) increasesequal to 60% of the change in the average consumer price index for the calendar year in which the pen-sioner retired, as compared to the average consumer price index for a 12-month period ending with eachAugust 31st immediately preceding the year in which the adjustment becomes payable. The regular retire-ment allowance is multiplied by the 60% factor as developed and results in the dollar amount of theadjustment payable. Retired members become eligible for pension adjustment benefits after 24 monthsof retirement. The COLA increases are funded by the retirement system and are included in the annualactuarial calculations of the required state and state-related employer contributions. Pursuant to the pro-visions of Chapter 78, P.L. 2011, COLA increases are suspended for all current and future retirees of allretirement systems. No further COLA increases will be granted. The law does not reduce any COLA increas-es that have already been added to retiree benefits.

Pursuant to Chapter 1, P.L. 2010, for new members of PFRS hired after May 21, 2010 (Tier 2 members),this law capped the maximum compensation that can be used to calculate a pension from these plans atthe annual wage contribution base for Social Security, and required the pension to be calculated using athree year average annual compensation instead of the last year’s salary.

Vesting and Benefit Provisions – POPF

The vesting and benefit provisions are set by N.J.S.A. 43:7. The POPF provides retirement, as well as deathand disability benefits. Retirement benefits are available after 25 years of service or at age 55 with 20years of service. The benefit is in the form of a life annuity equal to the greater of (a) 2% of averagefinal compensation up to the 30 years of service, plus 1% of average final compensation for each year ofservice above 30 and prior to age 65; (b) 50% of final pay; or (c) for members with 25 or more years ofservice, 2% of average final compensation for each year of service up to 30 years, plus 1% for each yearin excess of 30 years. Average final compensation equals the average salary for the final three years ofservice prior to retirement (or highest three years’ compensation if other than the final three years).

Vesting and Benefit Provisions – PERS

The vesting and benefit provisions are set by N.J.S.A. 43:15A and 43:3B. The PERS provides retirement,death and disability benefits. All benefits vest after eight to ten years of service, except for medical ben-efits, which vest after 25 years of service or under the disability provisions of the PERS.

For Tier 1 members, retirement benefits for age and service are available at age 60 and are generally deter-mined to be 1/55 of final average salary for each year of service credit, as defined. Final average salaryequals the average salary for the final three years of service prior to retirement (or highest three years’compensation if other than the final three years). Members may seek early retirement after achieving 25years service credit, as defined, or they may elect deferred retirement after achieving eight to ten years


June 30, 2012




June 30, 2012

of service credit, in which case benefits would begin the first day of the month after the member attainsnormal retirement age.

Members are always fully vested for their own contributions and, after three years of service credit,become vested for earnings on their contributions at 2% per annum. In the case of death before retire-ment, members’ beneficiaries are entitled to full interest credited to the members’ accounts.

Eligible retirees receiving monthly benefits are entitled to cost-of-living adjustment (COLA) increasesequal to 60% of the change in the average consumer price index for the calendar year in which the pen-sioner retired, as compared to the average consumer price index for a 12-month period ending with eachAugust 31st immediately preceding the year in which the adjustment becomes payable. The regular retire-ment allowance is multiplied by the 60% factor as developed and results in the dollar amount of theadjustment payable. Retired members become eligible for pension adjustment benefits after 24 monthsof retirement. The COLA increases are funded by the retirement system and are included in the annualactuarial calculations of the required state and state-related employer contributions. Pursuant to the pro-visions of Chapter 78, P.L. 2011, COLA increases are suspended for all current and future retirees of allretirement systems. No further COLA increases will be granted. The law does not reduce any COLA increas-es that have already been added to retiree benefits.

Chapter 103, P.L. 2007 amended the early retirement reduction formula for members hired on or after July1, 2007 and prior to November 2, 2008 (Tier 2 members) and retiring with 25 years of service to bereduced by 1% for every year between age 55 and 60, plus 3% for every year under age 55. Also, this lawprovided that the amount of compensation for Tier 2 members used for employer and member contribu-tions and benefits under the PERS cannot exceed the annual maximum wage contribution base for SocialSecurity, pursuant to the Federal Insurance Contributions Act.

Chapter 89, P.L. 2008 increased the PERS eligibility age for unreduced benefits from age 60 to age 62 formembers hired on or after November 1, 2008 and on or before May 21, 2010 (Tier 3 members). It alsoincreased the minimum annual compensation required for membership eligibility for new Tier 3 membersfrom $1,500 to $7,500 in addition to amending the early retirement reduction formula for Tier 3 mem-bers retiring with 25 years of service to 1% for every year between age 55 and 62, plus 3% for every yearunder age 55.

Chapter 1, P.L. 2010, effective May 21, 2010, changed the membership eligibility criteria for new mem-bers of PERS hired after May 21, 2010 (Tier 4 and Tier 5 members) from the amount of annual compen-sation to the number of hours worked weekly. Also, it returned the benefit multiplier for these membersof PERS to 1/60 from 1/55, and it provided that the retirement allowance for these members be calcu-lated using the average annual compensation for the last five years of service instead of the last threeyears of service. Tier 4 and Tier 5 members of PERS no longer receive pension service credit from morethan one employer. Pension service credit is earned for the highest paid position only. This law also closedthe Prosecutors Part of the PERS to new members.

Chapter 3, P.L. 2010, effective May 21, 2010, replaced the accidental and ordinary disability retirementfor Tier 4 and Tier 5 members of the PERS with disability insurance coverage similar to that provided bythe State to individuals enrolled in the State’s Defined Contribution Retirement Program.




June 30, 2012

Chapter 78, P.L. 2011, provides that new members of PERS hired on or after June 28, 2011 (Tier 5 mem-bers) need 30 years of creditable service and age 65 for receipt of the early retirement benefit without areduction of ¼ of 1% for each month that the member is under age 65. Tier 5 members are eligible for aservice retirement benefit at age 65.

Vesting and Benefit Provisions – SPRS

The vesting and benefit provisions are set by N.J.S.A. 53:5A. The SPRS provides retirement as well asdeath and disability benefits. All benefits vest after ten years of service, as defined. Retirement benefitsare available after 20 years of service as defined at any age with mandatory retirement at age 55. Theretirement benefit is based upon final compensation, which for Tier 1 members is defined as salary plusmaintenance allowance during the last 12 months prior to retirement, and is a life annuity equal to thegreater of the following: (a) 50% of final compensation; (b) for members retiring due to mandatory retire-ment, 50% of final compensation, plus 2% for each year of service in excess of 20 years to a maximumof 60% of final compensation; or (c) for members retiring with 25 or more years of service, 65% of finalcompensation, plus 1% for each year of service in excess of 25 years, to a maximum of 70% of final com-pensation. Members may elect deferred retirement after ten years of service in which case benefits in theform of life annuity would begin at age 55 equal to 2% of final compensation for each year of service upto 20 years.

Members are always fully vested for their own contributions.

Eligible retirees receiving monthly benefits are entitled to cost-of-living adjustment (COLA) increasesequal to 60% of the change in the average consumer price index for the calendar year in which the pen-sioner retired, as compared to the average consumer price index for a 12-month period ending with eachAugust 31st immediately preceding the year in which the adjustment becomes payable. The regular retire-ment allowance is multiplied by the 60% factor as developed and results in the dollar amount of theadjustment payable. Retired members become eligible for pension adjustment benefits after 24 months ofretirement. Pursuant to the provisions of Chapter 78, P.L. 2011, COLA increases are suspended for all cur-rent and future retirees of all retirement systems. No further COLA increases will be granted. The law doesnot reduce any COLA increases that have already been added to retiree benefits.

Pursuant to Chapter 1, P.L. 2010 for new members of SPRS hired after May 21, 2010 (Tier 2 members),this law capped the maximum compensation that can be used to calculate a pension from these plans atthe annual wage contribution base for Social Security, and requires the pension to be calculated using athree year average annual compensation instead of the last year’s salary.

Vesting and Benefit Provisions – TPAF

The vesting and benefit provisions are set by N.J.S.A. 18A:66. The TPAF provides retirement, death anddisability benefits. All benefits vest after ten years of service, except for medical benefits, which vestafter 25 years of service or under the disability provisions of the TPAF.

For Tier 1 members, retirement benefits for age and service are available at age 60 and are generally deter-mined to be 1/55 of final average salary for each year of service credit, as defined. Final average salaryequals the average salary for the final three years of service prior to retirement (or highest three years’compensation if other than the final three years). Members may seek early retirement after achieving 25




June 30, 2012

years service credit, as defined, or they may elect deferred retirement after achieving ten years of serv-ice credit, in which case benefits would begin the first day of the month after the member attains nor-mal retirement age.

Members are always fully vested for their own contributions and, after three years of service credit,become vested for 2% of related interest earned on the contributions. In the case of death before retire-ment, members’ beneficiaries are entitled to full interest credited to the members’ accounts.

Eligible retirees receiving monthly benefits are entitled to cost-of-living adjustment (COLA) increasesequal to 60% of the change in the average consumer price index for the calendar year in which the pen-sioner retired, as compared to the average consumer price index for a 12-month period ending with eachAugust 31st immediately preceding the year in which the adjustment becomes payable. The regular retire-ment allowance is multiplied by the 60% factor as developed and results in a dollar amount of the adjust-ment payable. Retired members become eligible for pension adjustment benefits after 24 months ofretirement. Pursuant to the provisions of Chapter 78, P.L. 2011, COLA increases are suspended for all cur-rent and future retirees of all retirement systems. No further COLA increases will be granted. The law doesnot reduce any COLA increases that have already been added to retiree benefits.

Chapter 103, P.L. 2007 amended the early retirement reduction formula for members hired on or after July1, 2007 and retiring with 25 years of service to be reduced by 1% for every year between age 55 and 60,plus 3% for every year under age 55. Also, this law provided that for members hired on or after July 1,2007, the amount of compensation used for employer and member contributions and benefits under theTPAF cannot exceed the annual maximum wage contribution base for Social Security, pursuant to theFederal Insurance Contributions Act.

Chapter 89, P.L. 2008 increased the TPAF eligibility age for unreduced benefits from age 60 to age 62 formembers hired on or after November 1, 2008 and increased the minimum annual compensation requiredfor membership eligibility for new members. Also, it amended the early retirement reduction formula formembers hired on or after November 1, 2008 and retiring with 25 years of service to 1% for every yearbetween age 55 and 62 plus 3% for every year under age 55.

Chapter 1, P.L. 2010, effective May 21, 2010, changed the membership eligibility criteria for new membersof TPAF from the amount of annual compensation to the number of hours worked weekly. Also, it returnedthe benefit multiplier for new members of TPAF to 1/60 from 1/55, and it provided that new members ofTPAF have the retirement allowance calculated using the average annual compensation for the last five yearsof service instead of the last three years of service. New members of TPAF no longer receive pension serv-ice credit from more than one employer. Pension service credit is earned for the highest paid position only.

Chapter 3, P.L. 2010, effective May 21, 2010, replaced the accidental and ordinary disability retirementfor new members of the TPAF with disability insurance coverage similar to that provided by the State toindividuals enrolled in the State’s Defined Contribution Retirement Program.

Chapter 78, P.L. 2011, provides that new members of TPAF hired on or after June 28, 2011 (Tier 5 mem-bers) need 30 years of creditable service and age 65 for receipt of the early retirement benefit without areduction of ¼ of 1% for each month that the member is under age 65. Tier 5 members are eligible fora service retirement benefit at age 65.




June 30, 2012

Vesting and Benefit Provisions – SACT

Upon retirement, a participant receives a life annuity benefit or may elect to receive a benefit paid as asingle cash payment or various forms of monthly annuity payments with a beneficiary provision based onthe value of the participant’s account in the month of retirement. Upon the death of a participant, thedesignated beneficiary may elect to receive a lump sum equal to the account value or an annuity underany of the settlement options which a retiree could elect under the Trust. Upon termination of employ-ment and withdrawal from the basic retirement systems, a participant must also withdraw his accountunder the Trust as a lump-sum settlement.

Benefit Provisions – CPF

Benefits are payable under various State of New Jersey acts in an amount equal to one-half of the com-pensation received by the participant for his/her service. In the case of Disabled Veterans’ Pensions andSurviving Spouses, the amount is $62.50 per month.

Vesting and Benefit Provisions – NJSEDCP

Assets in the Plan are held in trust for the exclusive benefit of Plan members and their beneficiaries inaccordance with GASB Statement No. 32, Accounting and Financial Reporting for Internal Revenue CodeSection 457 Deferred Compensation Plans. Plan members are fully vested for the current valuation of theiraccount from the date of enrollment in the Plan. Benefits are payable upon separation from service withthe State of New Jersey.

Vesting and Benefit Provisions – DCRP

Eligible members are provided with a defined contribution retirement plan intended to qualify for favor-able Federal income tax treatment under Internal Revenue Code (IRC) § 401(a), a non-contributory grouplife insurance plan and a non-contributory group disability benefit plan. A participant‘s interest in thatportion of his or her defined contribution retirement plan account attributable to employee contributionsshall immediately become and shall at all times remain fully vested and nonforfeitable. A participant‘sinterest in that portion of his or her defined contribution retirement plan account attributable to employ-er contributions shall be vested and nonforfeitable on the date the participant commences the secondyear of employment or upon his or her attainment, while employed by an employer, of age 65, whichev-er occurs first.

Benefit Provisions – ABPLTD

Members who are totally disabled due to an occupational or non-occupational condition are eligible toreceive a regular monthly benefit equal to 60% of the base salary earned over the 12 month period pre-ceding the onset of the disability. The long-term disability benefits continue until such time as the mem-ber retires or attains the age of 70, whichever comes first.

Vesting and Benefit Provisions – SHBP – State (including PDP – State)

The Program provides medical coverage to qualified active and retired participants. Under Chapter 136,P.L. 1977, the State of New Jersey pays for the health insurance coverage of all enrolled retired Stateemployees (regardless of age) whose pensions are based upon 25 years or more of credited service or adisability retirement regardless of years of service. Retirees who are not eligible for employer paid health




June 30, 2012


coverage at retirement can continue in the program by paying the cost of the insurance for themselvesand their covered dependents. The Prescription Drug Program Fund (PDP) was established in December1974, under N.J.S.A. 52:14-17.29 to provide coverage to employees and their eligible dependents fordrugs which under federal or State law may be dispensed only upon a prescription written by a physician.State employees are eligible for PDP coverage after 60 days of employment.

Vesting and Benefit Provisions – SHBP – Local (including PDP – Local)

The Program provides medical coverage to qualified local active and retired participants. Partially fundedbenefits are also provided to local police officers and firefighters who retire with 25 years of service (oron disability) from an employer who does not provide coverage under the provisions of Chapter 330, P.L.1997. Also, local employees are eligible for the PDP coverage after 60 days of employment.

Vesting and Benefit Provisions – SHBP – Education (including PDP – Education)

The program provides medical coverage to qualified local education active and retired participants.Members of the TPAF who retire from a board of education or county college with 25 years of service oron a disability retirement receive free post-retirement medical coverage. Under the provisions of Chapter126, P.L. 1992, the program also provides free coverage to members of the PERS and Alternate BenefitsProgram (ABP) who retire from a board of education or county college with 25 years of service or on adisability retirement if the member’s employer does not provide this coverage. Certain local participatingemployers also provide post-retirement medical coverage to their employees. Retirees who are not eligi-ble for employer paid health coverage at retirement can continue in the program if their employer par-ticipates in this program or if they are participating in the health benefits plan of their former employerand are enrolled in Medicare Parts A and B by paying the cost of the insurance for themselves and theircovered dependents. Also, education employees are eligible for the PDP coverage after 60 days of employ-ment.

Vesting and Benefit Provisions – ABP

ABP provides retirement benefits, disability benefits, and group life insurance benefits to eligible partic-ipants. Retirement benefits are payable upon separation from service with no age or service requirements.However, distributions under age 55 are limited to employee contributions and accumulations. Theremaining employer’s contributions and earnings are available for distribution upon attaining age 55.Participants are immediately vested if the participant has an existing retirement account containingemployer and employee contributions based on employment in public education, or is an active or vest-ed member of a federal or state retirement system.

Benefit Provisions – PAF

The Pension Adjustment Fund covers eligible retirees and survivors of CPFPF, POPF and CPF. Eligibleretirees and/or survivors are those who have been retired at least 24 months.

Those eligible for benefits are entitled to cost-of-living adjustment (COLA) increases equal to 60% of thechange in the average consumer price index for the calendar year in which the pensioner retired, as com-pared to the average consumer price index for a 12-month period ending with each August 31st immedi-ately preceding the year in which the adjustment becomes payable. The regular retirement allowance ismultiplied by the 60% factor as developed and results in a dollar amount of the adjustment payable.Retired members become eligible for pension adjustment benefits after 24 months of retirement.



June 30, 2012

Chapter 4, P.L. 2001 provided increased benefits to certain members of the Consolidated Police andFiremen’s Pension Fund who retired prior to December 29, 1989 with at least 25 years of creditable serv-ice. The benefit increase is effective November 1, 2001. The maximum amount of the increase was 5% ofthe retiree’s final compensation. For those with 30 or more years of service, the total pension benefitwould increase from 65% to 70% of final compensation.

As a result of this legislation, cost-of-living benefits payable to eligible retirees also increased. The State,not the local municipalities, is responsible for these costs.

Pursuant to the provisions of Chapter 78, P.L. 2011, COLA increases are suspended for all current andfuture retirees of all retirement systems. No further COLA increases will be granted. The law does notreduce any COLA increases that have already been added to retiree benefits.

Benefit Provisions – DEP – State and Local

The Program provides coverage to employees and their eligible dependents for dental services performedby a qualified dentist. Employees are eligible for coverage after 60 days of employment.

(7) FUNDS

The Funds maintain the following legally required funds as follows (amounts indicated in parenthesis repre-sent net assets held in trust for the respective fund as indicated):

Members’ Annuity Savings Fund and Accumulative Interest Fund – JRS ($44,485,288); TPAF ($9,493,983,997); PERS ($11,396,096,703); PFRS ($3,189,883,103); SPRS ($190,825,488)

The Members’ Annuity Savings Fund (ASF) is credited with all contributions made by active members of theFunds. Interest earned on member contributions is credited to the Accumulative Interest Fund, which isapplied to TPAF, PERS, and JRS. Member withdrawals are paid out of these Funds.

Contingent Reserve Fund – JRS ($-13,060,769); TPAF ($-16,057,130,412); PERS ($-9,821,698,828);SPRS ($854,608,900)

The Contingent Reserve Fund is credited with the contributions of contributing employers. Interest earnings,after crediting the Accumulative Interest Fund, Retirement Reserve Fund, and Special Reserve Fund, asrequired, are credited to this account. Additionally, payments for administrative and miscellaneous expensesare made from this Fund.

Retirement Reserve Fund – JRS ($200,611,146); TPAF ($31,971,786,906); PERS ($24,058,812,437);PFRS ($19,435,010,181); SPRS ($684,413,437)

The Retirement Reserve Fund is the account from which retirement benefits including cost-of-living adjust-ments are paid. Upon retirement of a member, accumulated contributions together with accumulated interestare transferred to the Retirement Reserve Fund from the Members’ ASF and Accumulative Interest Fund. Anyadditional reserves needed to fund the balance of the retirement benefit are transferred from the ContingentReserve Fund or Pension Accumulation Fund. Annually, interest as determined by the State Treasurer (8.25%for fiscal year 2012) is credited to the Retirement Reserve Fund.




June 30, 2012

(7) FUNDS, Continued

Retirement Reserve Fund – POPF ($9,044,236)

The Retirement Reserve Fund is credited with State of New Jersey contributions and investment income. Inaddition, all benefits are paid from this account.

Contributory Group Insurance Premium Fund – TPAF ($136,195,759); PERS ($371,240,923)

The Contributory Group Insurance Premium Fund represents the accumulation of member group life insurancecontributions in excess of premiums disbursed to the insurance carrier since the inception of the contributo-ry death benefit program plus reserves held by the insurance carriers. Members are required by statute to par-ticipate in the contributory group life insurance plan in the first year of membership and may cancel thecontributory coverage thereafter. The current contribution rate for active members is 0.4 of 1% of salary forTPAF and 0.5 of 1% of salary for PERS, as defined.

Non-Contributory Group Insurance Premium Fund – PERS – Local ($71,400,763); PFRS – Local ($7,982,316)

The Non-Contributory Group Insurance Premium Fund represents the accumulation of employer group lifeinsurance contributions in excess of premiums disbursed to the insurance carrier since the inception of thenon-contributory death benefit program plus reserves held by the insurance carrier. Members are eligible bystatute for the non-contributory group life insurance plan in the first year of membership. TPAF, PERS-State,and PFRS-State show a zero balance as these premium expenses are funded on a monthly basis.

Pension Accumulation Fund – PFRS ($-1,625,791,035)

The Pension Accumulation Fund is credited with the contributions of the State of New Jersey and otheremployers. Interest earnings, after crediting the Retirement Reserve Fund and the Special Reserve Fund, asrequired, are credited to this account. Additionally, payments for administrative and miscellaneous expensesare made from this Fund.

Pension Reserve Fund – CPFPF ($4,858,860)

The Pension Reserve Fund is credited with State of New Jersey contributions and investment income.

Reserve Fund – Alternate Benefit – Long Term Disability ($1,556,065)

The fund balance of the ABPLTD is available for future payments to participants.

Benefit Enhancement Reserve Fund – PERS – Local ($307,586,000)

The Benefit Enhancement Reserve Fund is a special reserve fund from which the required normal contribu-tions to provide benefit increases under Chapter 353, P.L. 2001 and Chapter 133, P.L. 2001 will be charged.The fund was established in 2002 and credited with excess assets equivalent to member contributions for fis-cal years 2000 and 2001 by transferring reserves in the Contingent Reserve Fund to the Benefit EnhancementFund. Additional transfers will be made, as required, to maintain a fund balance equal to the present valueof expected additional normal contributions due to the increased benefits.


Reserve Fund – SHBP – State (including PDP – State) ($-100,143,475)

The State used available reserves to cover claims payments this fiscal year, resulting in a negative fund bal-ance at year end.

Reserve Fund – SHBP – Local (including PDP – Local) ($147,927,168)

The net assets of the SHBP – Local are available to pay claims of future periods. These reserves are main-tained by the fund to stabilize rates and to meet unexpected increase in claims.

Reserve Fund – SHBP – Education (including PDP – Education) ($183,891,995)

The net assets of the SHBP – Education are available to pay claims of future periods. These reserves are main-tained by the fund to stabilize rates and to meet unexpected increase in claims.

Various reserve fund net asset balances as of June 30, 2012 as described previously are as follows:

(8) CONTINGENCIES

The Division is a party to various legal actions arising in the ordinary course of its operations. While itis not feasible to predict the ultimate outcome of these actions, it is the opinion of management that the resolution of these matters will not have a material adverse effect on the Division’s financialstatements.


June 30, 2012

(7) FUNDS, Continued

Pension Trust Funds

Health Benefit Program Funds

Members’ Annuity Savings Fund and Accumulative Interest Fund $24,315,274,579 —Contingent Reserve Fund (25,037,281,109) —Retirement Reserve Fund 76,359,678,343 —Contributory Group Insurance Premium Fund 507,436,682 —Non-Contributory Group Insurance Premium Fund 79,383,079 —Pension Accumulation Fund (1,625,791,035) —Pension Reserve Fund 4,858,860 —Reserve Fund 1,556,065 231,675,688Benefit Enhancement Reserve Fund 307,586,000 —Variable Accumulation Reserve Accounts (SACT/DCP/DCRP) 2,713,666,080 —Variable Benefits Reserve Account (SACT) 25,946,808 —

Total $77,652,314,352 231,675,688



Required Supplementary Information Schedule of Funding Progress

(Unaudited — See accompanying independent auditor’s report)

UNFUNDED(OVERFUNDED)

ACTUARIALUNFUNDED ACCRUED

(OVERFUNDED) LIABILITY AS AACTUARIAL ACTUARIAL ACTUARIAL PERCENTAGE

ACTUARIAL VALUE OF ACCRUED ACCRUED FUNDED COVERED OF COVEREDVALUATION ASSETS LIABILITY LIABILITY RATIO PAYROLL PAYROLL

DATE (a) (b) (b - a) (a / b) (c) ((b - a) / c)

JUDICIAL RETIREMENT SYSTEM (JRS)July 1, 2006 $369,493,799 493,778,007 124,284,208 74.8% $62,492,250 198.9%July 1, 2007 379,364,939 524,970,330 145,605,391 72.3 63,144,685 230.6July 1, 2008 380,964,713 553,284,647 172,319,934 68.9 67,159,516 256.6July 1, 2009 354,399,646 594,043,375 239,643,729 59.7 70,133,372 341.7July 1, 2010 329,030,387 554,540,403 225,510,016 59.3 71,746,413 314.3July 1, 2011 305,245,844 585,700,787 280,454,943 52.1 67,437,125 415.9

CONSOLIDATED POLICE AND FIREMEN’S PENSION FUND (CPFPF)July 1, 2006 $22,453,828 24,749,667 2,295,839 90.7% N/A N/AJuly 1, 2007 19,336,247 21,090,186 1,753,939 91.7 N/A N/AJuly 1, 2008 15,705,984 17,319,488 1,613,504 90.7 N/A N/AJuly 1, 2009 13,515,949 14,024,132 508,183 96.4 N/A N/AJuly 1, 2010 10,632,228 11,824,904 1,192,676 89.9 N/A N/AJuly 1, 2011 8,126,894 9,179,981 1,053,087 88.5 N/A N/A

POLICE AND FIREMEN’S RETIREMENT SYSTEM (PFRS)StateJuly 1, 2006 $2,082,930,162 3,082,176,677 999,246,515 67.6% $506,084,434 197.4%July 1, 2007 2,215,697,407 3,426,631,813 1,210,934,406 64.7 527,556,519 229.5July 1, 2008 2,316,017,361 3,749,118,910 1,433,101,549 61.8 527,495,741 271.7July 1, 2009 2,254,766,935 3,993,259,480 1,738,492,545 56.5 525,862,047 330.6July 1, 2010 2,190,654,958 3,672,361,258 1,481,706,300 59.7 530,747,536 279.2July 1, 2011 2,143,492,414 3,926,525,679 1,783,033,265 54.6 526,058,270 338.9LocalJuly 1, 2006 $18,281,315,556 22,907,522,660 4,626,207,104 79.8% $2,772,915,465 166.8%July 1, 2007 19,500,229,156 24,562,195,443 5,061,966,287 79.4 2,932,283,180 172.6July 1, 2008 20,437,541,909 26,871,106,532 6,433,564,623 76.1 3,068,758,436 209.6July 1, 2009 20,724,453,343 28,448,841,765 7,724,388,422 72.8 3,147,812,476 245.4July 1, 2010 20,367,865,987 25,601,998,126 5,234,132,139 79.6 3,189,786,833 164.1July 1, 2011 21,027,839,958 26,978,632,188 5,950,792,230 77.9 3,123,358,027 190.5

PRISON OFFICERS’ PENSION FUND (POPF)July 1, 2006 $14,014,718 8,236,295 (5,778,423) 170.2% N/A N/AJuly 1, 2007 13,499,361 7,378,386 (6,120,975) 183.0 N/A N/AJuly 1, 2008 12,890,441 6,789,017 (6,101,424) 189.9 N/A N/AJuly 1, 2009 11,986,919 6,136,441 (5,850,478) 195.3 N/A N/AJuly 1, 2010 11,018,367 5,635,024 (5,383,343) 195.5 N/A N/AJuly 1, 2011 9,997,650 5,096,792 (4,900,858) 196.2 N/A N/A

Schedule 1




(Unaudited — See accompanying independent auditor’s report) UNFUNDED

(OVERFUNDED)ACTUARIAL

UNFUNDED ACCRUED(OVERFUNDED) LIABILITY AS A

ACTUARIAL ACTUARIAL ACTUARIAL PERCENTAGEACTUARIAL VALUE OF ACCRUED ACCRUED FUNDED COVERED OF COVEREDVALUATION ASSETS LIABILITY LIABILITY RATIO PAYROLL PAYROLL

DATE (a) (b) (b - a) (a / b) (c) ((b - a) / c)

PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (PERS)StateJuly 1, 2006 $10,668,645,162 14,797,684,446 4,129,039,284 72.1% $4,253,564,219 97.1%July 1, 2007 11,024,255,608 16,028,875,601 5,004,619,993 68.8 4,434,933,181 112.8July 1, 2008 11,200,668,671 17,072,702,680 5,872,034,009 65.6 4,609,019,779 127.4July 1, 2009 10,692,585,100 18,947,194,579 8,254,609,479 56.4 4,627,092,235 178.4July 1, 2010 10,252,640,127 17,429,178,021 7,176,537,894 58.8 4,564,850,886 157.2July 1, 2011 9,938,069,705 18,290,829,021 8,352,759,316 54.3 4,608,926,826 181.2

LocalJuly 1, 2006 $16,699,827,172 20,273,979,840 3,574,152,668 82.4% $6,730,309,209 53.1%July 1, 2007 17,690,520,507 21,764,214,593 4,073,694,086 81.3 6,983,534,635 58.3July 1, 2008 18,217,749,414 23,173,183,973 4,955,434,559 78.6 7,206,781,046 68.8July 1, 2009 18,165,648,669 25,523,208,576 7,357,559,907 71.2 7,368,354,906 99.9July 1, 2010 18,481,952,370 23,918,658,044 5,436,705,674 77.3 7,416,503,897 73.3July 1, 2011 18,996,299,489 24,679,095,575 5,682,796,086 77.0 7,000,115,900 81.2

STATE POLICE RETIREMENT SYSTEM (SPRS)July 1, 2006 $1,970,398,511 2,319,656,532 349,258,021 84.9% $263,220,592 132.7%July 1, 2007 2,066,754,160 2,485,649,230 418,895,070 83.1 275,301,995 152.2July 1, 2008 2,127,263,509 2,609,164,869 481,901,360 81.5 281,087,566 171.4July 1, 2009 2,063,962,877 2,825,455,568 761,492,691 73.0 287,267,502 265.1July 1, 2010 2,019,350,048 2,497,094,137 477,744,089 80.9 289,980,657 164.8July 1, 2011 2,002,813,881 2,581,950,846 579,136,965 77.6 275,219,752 210.4

TEACHERS’ PENSION AND ANNUITY FUND (TPAF)July 1, 2006 $35,531,294,790 46,539,868,653 11,008,573,863 76.3% $8,748,623,186 125.8%July 1, 2007 36,714,578,745 49,161,247,363 12,446,668,618 74.7 9,077,628,813 137.1July 1, 2008 36,664,627,629 51,754,814,521 15,090,186,892 70.8 9,419,083,203 160.2July 1, 2009 34,838,211,259 54,576,061,024 19,737,849,765 63.8 9,747,020,060 202.5July 1, 2010 33,265,326,627 49,543,347,849 16,278,021,222 67.1 10,025,401,658 162.4July 1, 2011 32,289,888,420 51,406,540,290 19,116,651,870 62.8 9,682,318,739 197.4

Schedule 1, Continued





Schedule 1, continued

* Required disclosure at adoption of standard. Covered payroll not available for the initial analysis.

UNFUNDED(OVERFUNDED)

ACTUARIALUNFUNDED ACCRUED

(OVERFUNDED) LIABILITY AS AACTUARIAL ACTUARIAL ACTUARIAL PERCENTAGE

ACTUARIAL VALUE OF ACCRUED ACCRUED FUNDED COVERED OF COVEREDVALUATION ASSETS LIABILITY LIABILITY RATIO PAYROLL* PAYROLL*

DATE (a) (b) (b - a) (a / b) (c) ((b - a) / c)

STATE HEALTH BENEFIT PROGRAM — STATEJuly 1, 2007 $ — 18,417,000,000 18,417,000,000 —% N/A N/AJuly 1, 2008 — 19,850,900,000 19,850,900,000 — $7,163,803,681 277.1%July 1, 2009 — 20,461,400,000 20,461,400,000 — 7,493,198,538 273.1July 1, 2010 — 21,090,400,000 21,090,400,000 — 7,424,794,315 284.1July 1, 2011 — 18,077,800,000 18,077,800,000 — 7,491,835,889 241.3

STATE HEALTH BENEFIT PROGRAM — LOCALJuly 1, 2007 $ — 9,096,600,000 9,096,600,000 —% N/A N/AJuly 1, 2008 — 8,840,500,000 8,840,500,000 — $2,411,700,000 366.6%July 1, 2009 — 10,010,400,000 10,010,400,000 — 2,607,200,000 384.0July 1, 2010 — 12,089,800,000 12,089,800,000 — 2,844,100,000 425.1July 1, 2011 — 11,127,000,000 11,127,000,000 — 2,831,000,000 393.0

STATE HEALTH BENEFIT PROGRAM — EDUCATION

July 1, 2007 $ — 32,232,500,000 32,232,500,000 —% N/A N/AJuly 1, 2008 — 36,062,600,000 36,062,600,000 — $13,016,396,319 277.1%July 1, 2009 — 36,321,100,000 36,321,100,000 — 13,301,201,462 273.1July 1, 2010 — 38,191,500,000 38,191,500,000 — 13,445,205,685 284.1July 1, 2011 — 30,871,900,000 30,871,900,000 — 12,794,864,111 241.3

STATE HEALTH BENEFIT PROGRAM FUNDS

Actuarial cost method Projected unit credit

Amortization method Level dollar, open

Remaining amortization period 30 years

Actuarial assumptions:

Interest rate 4.50% (assuming no prefunding)

Salary Range N/A

Cost-of-living adjustments N/A

Valuation date July 1, 2011

For medical benefits, the healthcare cost trend rate assumption initially is at 8.0% or 9.0% (depending on the medical plan) and decreases to a 5.0% long-term trend rate for all medical benefits after 6 or 8 years. For prescription drug benefits, the initial healthcarecost trend rate assumption is 9.0% or 9.5% (depending on the retirement status), decreasing to a 5.0% long-term trend rate after 8 or9 years. For Medicare Part B reimbursement, the healthcare cost trend rate assumption is 5.0% throughout 11 years.

Significant actuarial methods and assumptions used in the most recent 2011 actuarial valuation include thefollowing:



Required Supplementary Information Schedule of Funding Progress — Additional Actuarial Information(Unaudited — See accompanying independent auditor’s report)




Required Supplementary InformationSchedule of Funding Progress — Additional Actuarial Information(Unaudited — See accompanying independent auditor’s report)


Significant actuarial methods and assumptions used in the most recent 2011 actuarial valuations include thefollowing:

JRS CPFPF

Actuarial cost method Projected unit credit Projected unit creditAsset valuation method 5 year average of market value 5 year average of market valueAmortization method Level dollar, open Level dollar, closedRemaining amortization period 30 years 1 yearActuarial assumptions:

Interest rate 7.95% 2.00%Salary range 2.50% N/ACost-of-living adjustments —% N/A

Valuation date July 1, 2011 July 1, 2011

PFRS POPF

Actuarial cost method Projected unit credit Projected unit creditAsset valuation method 5 year average of market value Market valueAmortization method Level dollar, open Level dollar, closedRemaining amortization period 30 years 1 yearActuarial assumptions:

Interest rate 7.95% 5.00%Salary range 6.32% N/ACost-of-living adjustments —% N/A


PERS SPRS

Actuarial cost method Projected unit credit Projected unit creditAsset valuation method 5 year average of market value 5 year average of market valueAmortization method Level dollar, open Level dollar, openRemaining amortization period 30 years 30 yearsActuarial assumptions:

Interest rate 7.95% 7.95%Salary range 4.52% 3.45%Cost-of-living adjustments —% —%


TPAF

Actuarial cost method Projected unit creditAsset valuation method 5 year average of market valueAmortization method Level dollar, openRemaining amortization period 30 yearsActuarial assumptions:

Interest rate 7.95%Salary range 3.90%Cost-of-living adjustments —%

Valuation date July 1, 2011


YEAR ANNUALENDED REQUIRED EMPLOYER PERCENTAGE

JUNE 30, CONTRIBUTION CONTRIBUTIONS(1) (4) CONTRIBUTED


2007 $25,174,191 12,741,898(5) 50.6%2008 27,171,100 12,913,890(5) 47.52009 29,809,782(5) 1,696,843(5) 5.72010 32,540,704 1,032,857(5) 3.22011 38,450,553 651,718 1.72012 42,475,660 6,437,938 15.2


2007 $8,474,210 1,784,000 21.1%2008 2,388,591 523,000 21.92009 1,824,798 1,256,000 68.82010 1,678,690 —(5) —2011 528,714 — —2012 1,240,860 173,790 14.0


State2007 $216,570,332 128,167,965(5) 59.2%2008 252,836,330 133,510,475(5) 52.82009 275,205,347 20,014,342(5) 7.32010 343,091,276 7,326,383(5) 2.12011 377,153,530 7,629,519 2.02012 414,290,236 61,707,967 14.9

Local2007 $584,645,679 422,743,218 72.3%2008 708,019,933 647,288,920(6) 91.42009 773,029,316 696,476,702 90.12010 818,672,171 751,395,802 91.82011 960,271,326 882,095,029 91.92012 823,842,166 763,182,795 92.6

PRISON OFFICERS’ PENSION FUND2007 $— — N/A2008 — — N/A2009 — — N/A2010 — — N/A2011 — — N/A2012 — — N/A


Required Supplementary Information Schedule of Employer Contributions


Schedule 2



Required Supplementary Information Schedule of Employer Contributions


YEAR ANNUALENDED REQUIRED EMPLOYER PERCENTAGE

JUNE 30, CONTRIBUTION CONTRIBUTIONS(1)(4) CONTRIBUTED

PUBLIC EMPLOYEES’ RETIREMENT SYSTEM(2)

State 2007 $379,946,338 215,629,964 56.8%2008 557,237,789(5) 234,560,830(5) 42.12009 622,123,112 49,408,878(5) 7.92010 684,036,322 27,910,317(5) 4.12011 871,820,619 31,079,384 3.62012 979,368,523 157,964,207 16.1

Local2007 $382,344,230 242,230,174 63.4%2008 588,326,347(6) 412,129,536(6) 70.12009 663,668,287 578,581,071(6) 87.22010 738,439,441 612,372,679(6) 82.92011 952,570,462 800,936,802 84.12012 915,789,890 825,980,958 90.2

STATE POLICE RETIREMENT SYSTEM2007 $56,502,006 29,268,194 51.8%2008 78,761,279(5) 36,443,502(5) 46.32009 86,385,254 5,574,860(5) 6.52010 91,411,237 1,018,200(5) 1.12011 114,120,061 2,201,604 1.92012 98,869,662 14,610,249 14.8


2007 $1,407,249,580 690,794,259 49.1%2008 1,550,503,835 695,275,811 44.82009 1,601,478,508 95,863,972 6.02010 1,796,358,016 33,199,655(5) 1.82011 2,123,175,950 30,655,332 1.42012 2,269,823,968 317,927,358 14.0

Schedule 2, Continued



Required Supplementary InformationSchedule of Employer Contributions


Notes to schedule:(1) In accordance with Chapter 115, P.L. 1997, available excess valuation assets were used to cover, in full or in part, the employer pension

contributions. In fiscal year 2004, only PFRS – State and SPRS were able to utilize excess assets to cover, in full or in part, the employ-er contributions. In fiscal year 2005, only SPRS had excess assets available to utilize. In fiscal year 2006, no excess assets were avail-able to be utilized toward State contributions. On the local side, excess assets were utilized to cover, in full or in part, the employercontributions for PERS through fiscal year 2004 and for PFRS through fiscal year 2003.

(2) The local employer pension contributions to PERS from 1999 to 2004 represent the required contributions under the early retirement incen-tive programs.

(3) The annual required contribution reflects a 30-year, 4.0% annual increasing amortization of the unfunded actuarial accrued liability.Based on expected benefit payments plus retiree drug subsidy for the applicable fiscal year end.

(4) Differences between the amounts in the employer contribution column in this schedule and the amounts recorded in the financial state-ments and footnotes are attributed to timing differences between the 2011 actuarial valuations and the actual amounts received in fis-cal year 2012. Employer contributions per this schedule represent anticipated contribution amounts determined at the time the actuarialvaluations were prepared and finalized prior to the end of fiscal year 2012. The financial statements and footnotes reflect the actualamounts received in 2012.

(5) For State, the fiscal year 2008 annual required contribution and the fiscal year 2007, 2008, 2009, and 2010 contributions have beenreduced in accordance with the provisions of the Appropriation Act for fiscal year 2007, 2008, 2009, and 2010, respectively.

(6) For local, the fiscal year 2008 annual required contribution and the fiscal year 2008 through 2010 contributions have been reduced inaccordance with Chapter 108, P.L. 2003.


YEAR ENDEDJUNE 30,

ANNUAL REQUIREDCONTRIBUTION (3)

EMPLOYERCONTRIBUTIONS

PERCENTAGECONTRIBUTED

State Health Benefit Program Fund — State

2008 $ 1,554,300,000 391,448,000 25.2%

2009 1,651,900,000 424,341,000 25.7

2010 1,676,000,000 476,394,000 28.4

2011 1,714,500,000 511,846,000 29.9

2012 1,802,200,000 505,481,000 28.0

State Health Benefit Program Fund — Local

2008 $ 748,100,000 179,900,000 24.0%

2009 713,900,000 169,600,000 23.8

2010 802,100,000 209,100,000 26.1

2011 976,900,000 251,100,000 25.7

2012 1,098,200,000 274,800,000 25.0

State Health Benefit Program Fund — Education

2008 $ 2,692,700,000 678,152,000 25.2%

2009 2,969,700,000 762,859,000 25.7

2010 2,992,500,000 850,606,000 28.4

2011 3,125,400,000 933,054,000 29.9

2012 3,115,800,000 873,919,000 28.0


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Schedule of Fiduciary Net AssetsFiduciary Funds

June 30, 2012

PENSION STATE HEALTH TRUST BENEFIT PROGRAMFUNDS FUNDS TOTAL

Assets:Cash and cash equivalents $ 710,701,930 11,188,569 721,890,499Securities lending collateral 1,209,086,214 — 1,209,086,214Investments, at fair value:

Cash Management Fund 1,120,324,394 670,653,045 1,790,977,439Common Pension Fund A 17,810,813,505 — 17,810,813,505Common Pension Fund B 19,869,132,559 — 19,869,132,559Common Pension Fund D 14,106,117,246 — 14,106,117,246Common Pension Fund E 16,810,102,421 — 16,810,102,421Common stocks 152,251,163 — 152,251,163Mortgages 963,899,029 — 963,899,029U.S. government obligations 371,746,092 — 371,746,092Domestic equities 1,117,461,645 — 1,117,461,645International equities 257,677,868 — 257,677,868Other fixed income securities 779,384,678 — 779,384,678

Total investments 73,358,910,600 670,653,045 74,029,563,645


Members 176,436,919 (6,453,061) 169,983,858Employers 3,042,500,527 112,838,037 3,155,338,564

Accrued interest and dividends 5,406,223 — 5,406,223Members’ loans 1,169,454,489 — 1,169,454,489Securities sold in transit 16,105,017 — 16,105,017Other 17,316,324 3,447,665 20,763,989

Total receivables 4,427,219,499 109,832,641 4,537,052,140

Total assets $ 79,705,918,243 791,674,255 80,497,592,498

Liabilities:Accounts payable and accrued expenses $ 126,008,322 559,998,567 686,006,889Retirement benefits payable 706,265,336 — 706,265,336Non-contributory group insurance premiums payable 14,094,987 — 14,094,987Securities lending collateral and rebates payable 1,207,235,246 — 1,207,235,246

Total liabilities 2,053,603,891 559,998,567 2,613,602,458

Net assets held in trust for pensionand health benefits $ 77,652,314,352 231,675,688 77,883,990,040

Schedule 6


Schedule 7


Schedule of Changes in Fiduciary Net AssetsFiduciary Funds


PENSION STATE HEALTHTRUST BENEFIT PROGRAMFUNDS FUNDS TOTAL


Members $ 2,064,589,561 244,680,394 2,309,269,955Employers 2,186,435,612 4,721,637,111 6,908,072,723Other 4,251,107 — 4,251,107

Total contributions 4,255,276,280 4,966,317,505 9,221,593,785

Investment income:Net depreciation in fair value

of investments (222,799,135) (111,356) (222,910,491)Interest 1,564,532,903 1,472,656 1,566,005,559Dividends 392,036,513 — 392,036,513

1,733,770,281 1,361,300 1,735,131,581Less: investment expense 13,056,983 — 13,056,983

Net investment income 1,720,713,298 1,361,300 1,722,074,598

Total additions 5,975,989,578 4,967,678,805 10,943,668,383

Deductions:Benefits 8,657,277,377 5,266,242,035 13,923,519,412Refunds of contributions 157,270,934 — 157,270,934Administrative and miscellaneous expenses 38,229,608 8,268,671 46,498,279

Total deductions 8,852,777,919 5,274,510,706 14,127,288,625

Net decrease (2,876,788,341) (306,831,901) (3,183,620,242)

Net assets held in trust for pension and health benefits:

Beginning of year 80,529,102,693 538,507,589 81,067,610,282

End of year $ 77,652,314,352 231,675,688 77,883,990,040


Schedule 8


Combining Schedule of Balance Sheet InformationFiduciary Funds — Agency Funds

June 30, 2012

ALTERNATE PENSION DENTAL TOTAL BENEFIT ADJUSTMENT EXPENSE AGENCY

PROGRAM FUND FUND PROGRAM FUND FUNDS

Assets:Cash and cash equivalents $ 752,115 610,514 1,048,014 2,410,643Investments, at fair value:

Cash Management Fund 558,756 1,420,116 26,256,866 28,235,738

Total investments 558,756 1,420,116 26,256,866 28,235,738

Receivables:State related employer contributions — 852,147 — 852,147Other contributions 30,816,885 9,435 (2,286,141) 28,540,179

Total receivables 30,816,885 861,582 (2,286,141) 29,392,326

Total assets $ 32,127,756 2,892,212 25,018,739 60,038,707

Liabilities:Accounts payable and accrued expenses $ 32,028,529 — 25,018,739 57,047,268Assets held for local contributing employers — 2,412,989 — 2,412,989Pension adjustment payroll payable — 237,510 — 237,510Due to State of New Jersey 99,227 64,128 — 163,355Due to other funds — 177,585 — 177,585

Total liabilities $ 32,127,756 2,892,212 25,018,739 60,038,707


Schedule 9


Combining Schedule of Changes in Fiduciary Net Assets InformationFiduciary Funds — Agency Funds


ALTERNATE PENSION DENTAL TOTALBENEFIT ADJUSTMENT EXPENSE AGENCY

PROGRAM FUND FUND PROGRAM FUND FUNDS


Members $ 959,024 — 85,622,543 86,581,567Employers 175,266,446 3,772,893 40,608,023 219,647,362

Total contributions 176,225,470 3,772,893 126,230,566 306,228,929

Investment income:Net depreciation in fair value

of investments (48) (42) (2,277) (2,367)Interest 1,829 6,845 35,825 44,499

Total investment income 1,781 6,803 33,548 42,132

Total additions 176,227,251 3,779,696 126,264,114 306,271,061

Deductions:Benefits 176,143,473 4,246,843 123,803,658 304,193,974Refunds of contributions and to the general fund 83,778 (467,147) 2,460,456 2,077,087

Total deductions 176,227,251 3,779,696 126,264,114 306,271,061

Change in net assets — — — —

Net assets — beginning of year — — — —

Net assets — end of year $ — — — —


Schedule 10


Combining Schedule of Fiduciary Net Assets InformationState Health Benefit Program Fund — State

June 30, 2012

TOTALHEALTH PRESCRIPTION STATE HEALTHBENEFIT DRUG BENEFIT

PROGRAM FUND PROGRAM FUND PROGRAM FUNDSTATE STATE STATE

Assets:Cash $ 327,920 54,983 382,903Investments, at fair value:

Cash Management Fund 64,589,340 29,477,767 94,067,107

Total investments 64,589,340 29,477,767 94,067,107


Members (1,127,090) (883,940) (2,011,030)Employers 8,248,932 24,450 8,273,382

Other 25,310 944,319 969,629

Total receivables 7,147,152 84,829 7,231,981

Total assets $ 72,064,412 29,617,579 101,681,991

Liabilities:Accounts payable and accrued expenses $ 183,336,274 18,489,192 201,825,466

Total liabilities 183,336,274 18,489,192 201,825,466

Net assets held in trust for health benefits $ (111,271,862) 11,128,387 (100,143,475)


Schedule 11


Combining Schedule of Changes in Fiduciary Net Assets InformationState Health Benefit Program Fund — State



PROGRAM FUND PROGRAM FUND PROGRAM FUNDSTATE STATE STATE


Members $ 132,598,898 19,452,732 152,051,630Employers 1,218,544,073 473,386,992 1,691,931,065

Total contributions 1,351,142,971 492,839,724 1,843,982,695

Investment income:Net depreciation in fair value of investments (11,300) (11,786) (23,086)Interest 143,011 66,417 209,428

Net investment income 131,711 54,631 186,342

Total additions 1,351,274,682 492,894,355 1,844,169,037

Deductions:Benefits 1,466,873,576 490,510,753 1,957,384,329Administrative expenses 3,100,752 — 3,100,752

Total deductions 1,469,974,328 490,510,753 1,960,485,081

Net increase (decrease) (118,699,646) 2,383,602 (116,316,044)

Net assets held in trust for health benefits:Beginning of year 7,427,784 8,744,785 16,172,569

End of year $ (111,271,862) 11,128,387 (100,143,475)


Schedule 12


Combining Schedule of Fiduciary Net Assets InformationState Health Benefit Program Fund — Local

June 30, 2012


PROGRAM FUND PROGRAM FUND PROGRAM FUNDLOCAL LOCAL LOCAL

Assets:Cash $ 2,825,535 345,214 3,170,749Investments, at fair value:




Members (1,649,730) (852,140) (2,501,870)Employers 55,011,526 10,770,509 65,782,035

Other 48,141 1,068,001 1,116,142

Total receivables 53,409,937 10,986,370 64,396,307

Total assets $ 189,768,444 69,505,207 259,273,651



Net assets held in trust for health benefits $ 86,210,961 61,716,207 147,927,168


Schedule 13


Combining Schedule of Changes in Fiduciary Net Assets InformationState Health Benefit Program Fund — Local



PROGRAM FUND PROGRAM FUND PROGRAM FUNDLOCAL LOCAL LOCAL


Members $ 27,847,395 15,261,996 43,109,391Employers 740,601,399 192,126,317 932,727,716

Total contributions 768,448,794 207,388,313 975,837,107



Total additions 768,757,550 207,449,659 976,207,209

Deductions:Benefits 789,855,345 190,058,262 979,913,607Administrative expenses 1,513,167 — 1,513,167

Total deductions 791,368,512 190,058,262 981,426,774



End of year $ 86,210,961 61,716,207 147,927,168


Schedule 14


Combining Schedule of Fiduciary Net Assets InformationState Health Benefit Program Fund — Education

June 30, 2012


PROGRAM FUND PROGRAM FUND PROGRAM FUNDEDUCATION EDUCATION EDUCATION

Assets:Cash $ 7,172,204 462,713 7,634,917Investments, at fair value:




Members (977,838) (962,323) (1,940,161)Employers 34,588,276 4,194,344 38,782,620

Other 41,101 1,320,793 1,361,894

Total receivables 33,651,539 4,552,814 38,204,353

Total assets $ 339,761,959 90,956,654 430,718,613



Net assets held in trust for health benefits $ 111,958,341 71,933,654 183,891,995


Schedule 15


Combining Schedule of Changes in Fiduciary Net Assets InformationState Health Benefit Program Fund — Education



PROGRAM FUND PROGRAM FUND PROGRAM FUNDEDUCATION EDUCATION EDUCATION


Members $ 29,082,922 20,436,451 49,519,373Employers 1,650,158,391 446,819,939 2,096,978,330

Total contributions 1,679,241,313 467,256,390 2,146,497,703



Total additions 1,679,929,444 467,373,115 2,147,302,559

Deductions:Benefits 1,875,991,351 452,952,748 2,328,944,099Administrative expenses 3,654,752 — 3,654,752

Total deductions 1,879,646,103 452,952,748 2,332,598,851



End of year $ 111,958,341 71,933,654 183,891,995


Schedule 16


Combining Schedule of Balance Sheet InformationAgency Fund — Dental Expense Program

June 30, 2012

TOTAL AGENCYFUND — DENTAL

EXPENSESTATE LOCAL PROGRAM

Assets:Cash and cash equivalents $ 651,305 396,709 1,048,014Investments, at fair value:



Receivables:Contributions 572,165 (2,858,306) (2,286,141)

Total receivables 572,165 (2,858,306) (2,286,141)

Total assets $ 17,179,858 7,838,881 25,018,739


Total liabilities $ 17,179,858 7,838,881 25,018,739


Schedule 17


Combining Schedule of Changes in Fiduciary Net Assets InformationAgency Fund — Dental Expense Program


TOTAL AGENCYFUND — DENTAL

EXPENSESTATE LOCAL PROGRAM


Members $ 51,468,095 34,154,448 85,622,543Employers 37,927,718 2,680,305 40,608,023

Total contributions 89,395,813 36,834,753 126,230,566

Investment income:Net depreciation in fair value of investments (2,163) (114) (2,277)Interest 26,055 9,770 35,825

Total investment income 23,892 9,656 33,548

Total additions 89,419,705 36,844,409 126,264,114

Deductions:Benefits 86,614,797 37,188,861 123,803,658Refunds of contributions and to the general fund 2,804,908 (344,452) 2,460,456

Total deductions 89,419,705 36,844,409 126,264,114

Change in net assets — — —

Net assets — beginning of year — — —

Net assets —end of year $ — — —


Schedule 18


Schedule of Changes in Assets and LiabilitiesInformation — Agency Fund — Alternate Benefit Program Fund

June 30, 2012

BALANCE BALANCEJUNE 30, 2011 ADDITIONS DEDUCTIONS JUNE 30, 2012

Assets:Cash and cash equivalents $ 63,944 153,994,782 153,306,611 752,115

Investments, at fair value:Cash management Fund 385,247 175,007,751 174,834,242 558,756

Receivables:Other contributions 25,457,163 30,816,885 25,457,163 30,816,885

Total assets $ 25,906,354 359,819,418 353,598,016 32,127,756

Liabilities:Accounts payable and accrued expenses $ 25,715,563 32,797,605 26,484,639 32,028,529

Due to State of New Jersey 190,791 99,227 190,791 99,227



Schedule 19


Schedule of Changes in Assets and LiabilitiesInformation — Agency Fund — Pension Adjustment Fund

June 30, 2012


Assets:Cash and cash equivalents $ 1,878,696 3,105,846 4,374,028 610,514

Investments, at fair value:Cash management Fund 476,192 5,552,470 4,608,546 1,420,116

Receivables:State related employer contributions 1,274,762 3,861,184 4,283,799 852,147Other contributions 68,491 22,394 81,450 9,435

Total assets $ 3,698,141 12,541,894 13,347,823 2,892,212

Liabilities:Assets held for local contributing employers $ 2,944,265 1,842 533,118 2,412,989Pension adjustment payroll payable 392,250 4,287,545 4,442,285 237,510Due to State of New Jersey 24,953 64,128 24,953 64,128Due to other funds 336,673 3,315,740 3,474,828 177,585



Schedule 20


Schedule of Changes in Assets and LiabilitiesInformation — Agency Fund — Dental Expense Program — Total

June 30, 2012


Assets:Cash and cash equivalents $ 564,590 36,897,969 36,414,545 1,048,014Investments, at fair value:

Cash management Fund 18,275,013 197,598,272 189,616,419 26,256,866

Receivables:Other contributions (355,080) 133,016,450 134,947,511 (2,286,141)

Total assets $ 18,484,523 367,512,691 360,978,475 25,018,739

Liabilities:Accounts payable and accrued expenses $ 18,378,249 68,853,814 62,213,324 25,018,739Cash overdraft 106,274 — 106,274 —



Schedule 21


Schedule of Changes in Assets and LiabilitiesInformation — Agency Fund — Dental Expense Program — State

June 30, 2012


Assets:Cash and cash equivalents $ 564,590 32,371,195 32,284,480 651,305Investments, at fair value:


Receivables:Other contributions (330,791) 93,171,500 92,268,544 572,165

Total assets $ 11,901,742 281,378,631 276,100,515 17,179,858

Liabilities:Accounts payable and accrued expenses $ 11,901,742 55,734,173 50,456,057 17,179,858



Schedule 22


Schedule of Changes in Assets and LiabilitiesInformation — Agency Fund — Dental Expense Program — Local

June 30, 2012


Assets:Cash and cash equivalents $ — 4,526,774 4,130,065 396,709Investments, at fair value:


Receivables:Other contributions (24,289) 39,844,950 42,678,967 (2,858,306)

Total assets $ 6,582,781 86,134,060 84,877,960 7,838,881

Liabilities:Accounts payable and accrued expenses $ 6,476,507 13,119,641 11,757,267 7,838,881Cash overdraft 106,274 — 106,274 —


INVESTMENT SECTION


State of New JerseyDEPARTMENT OF THE TREASURY

DIVISION OF PENSIONS AND BENEFITS(609) 292-7524 TDD (609) 292-7718www.state.nj.us/treasury/pensions

Mailing Address:PO Box 295

Trenton, NJ 08625-0295Location:

50 West State StreetTrenton, New Jersey

ANDREW P. SIDAMON-ERISTOFF

State Treasurer

FLORENCE J. SHEPPARD

Acting Director

CHRIS CHRISTIEGovernor

KIM GUADAGNOLt. Governor

June 30, 2012

REVIEWS OF MAJOR POLICY ISSUES

The Division of Investment ("Division"), under the jurisdiction of the State Investment Council (the"Council"), is responsible for the investment management of the assets of seven public pension systems:The Consolidated Police & Firemen's Pension Fund, the Judicial Retirement System, the Police & Firemen'sRetirement System, the Prison Officers Pension Fund, the Public Employees' Retirement System, the StatePolice Retirement System, and the Teachers' Pension and Annuity Fund (collectively referred to as the"Pension Fund").

The Division was created in 1950 by the New Jersey Legislature (P.O. 1950, c.270) to centralize all func-tions relating to the purchase, sale or exchange of securities for the State's diverse finds under experi-enced and professional management. The statute also established the Council to formulate investmentprocedures and policies to be followed by the Director. The statute vests investment authority in theDirector, who is appointed by the State Treasurer from candidates nominated by the Council. New andamended regulations adopted by the Council after public comments are filed with the Office ofAdministrative Law and reported in the New Jersey Register.

The Council is comprised of 16 members, appointed to fixed terms. Nine members are appointed by theGovernor for staggered five-year terms, and are drawn traditionally from the corporate investment com-munity. Eight of these nine hold appointments subject to the advice and consent of the Senate, and oneappointee is selected by the Governor from nominees submitted jointly by the President of the Senateand Speaker of the Assembly. Two members are appointed by the Governor for five-year terms from nom-inees submitted by the New Jersey State AFL-CIO, with at least one appointed member being a memberof a union representing police officers or firefighters. Two members are appointed by the Governor forthree year terms from nominees submitted by the New Jersey Education Association and the StateTroopers Fraternal Organization. Three members are designated to the Council for three-year terms by therespective pension system's board of trustees for the Public Employees' Retirement System, the Police &Firemen's Retirement System Board, and the Teachers' Pension and Annuity Fund. State law requires thatno Council member shall hold any office, position or employment with any political party, and none canbenefit from the transactions of the Division.

All investments by the Director must conform to the heightened "prudent person" standard set by theNew Jersey Legislature (P.L. 1997, c.26). This standard requires the Director "to manage and invest theportfolio solely in the interests of the beneficiaries of the portfolio and for the exclusive purpose of pro-viding financial benefits to the beneficiaries of the portfolio."

To the best of our knowledge, performance is calculated using the time-weighted return based on themodified Dietz method.

Timothy M. WalshDirector, Division of Investment


INVESTMENTS


STATE INVESTMENT COUNCILKEY REGULATIONS PERTAINING TO PENSION FUND ASSETS

• Public equity investments are limited to no more than 70 percent of the portfolio, including both domesticand international equities.

• Investments in international securities are limited to 30 percent of the portfolio, including both internation-al equities and fixed income obligations.

• The market value of securities of companies in emerging markets is limited to 1.5 times the percentagederived by (1) dividing the total market capitalization of companies included in the MSCI Emerging MarketIndex by (2) the total market capitalization of the companies included in the MSCI All-Country World Ex-United States Index of the total market value of the assets held by Common Pension Fund D.

• The currency exposure on international investments may be hedged through currency transactions.

• Unlimited investment is permitted in securities issued by the U.S. Government and designated agencies.

• Investment in domestic and international corporate obligations, and collateralized mortgage obligations aresubject to a minimum rating requirement of Baa3 by Moody’s, BBB- by Standard & Poor’s, and BBB- by FitchRatings. Investment in mortgage backed senior debt securities are subject to a minimum rating requirementof A3 by Moody’s, A- by Standard & Poor’s, and A- by Fitch Ratings. Up to five percent of the pension assetsmay be invested in these securities not meeting the minimum rating requirements.

• Up to 3 percent of the domestic equity portfolio may consist of debt in lieu of common stock, regardless ofthe credit rating of the issuing company.

• Investments in international government and agency obligations are limited to direct debt obligations of asovereign government or its political subdivisions, debt obligations of agencies of a sovereign governmentwhich are unconditionally guaranteed as to principal and interest by the sovereign government’s full faith andcredit, and debt obligations of international agencies that are directly backed by the collective credit of mul-tiple sovereign governments.

• Investments in municipal bonds, commercial paper, repurchase agreements, certificates of deposit, bankersacceptances, etc. are all permitted by specific regulations which specify high credit standards and conserva-tive investment limits.

• Subject to limitations established by the State Investment Council, futures contracts, certain options con-tracts and exchange-traded funds may be utilized in the management of the portfolios.

• The Council regulations contain limits on (1) the percentage of the portfolio that can be invested in any one secu-rity and (2) the percentage of the outstanding amount of any one security that can be owned by the portfolio. Theselimits help to insure that the portfolio is adequately diversified and that competitive market pricing is obtained.

• Investments in alternative investments are limited to no more than 38% of the portfolio in the aggregate,with individual category limitations for private equity (12%), real estate (9%), real assets (7%), and hedgefunds (15%).

PROXY VOTING

• Proxy voting policy addresses key issues.

• The Division seeks to vote all proxies received, unless shares are out on loan. Under certain circumstances,the Division may restrict shares from being loaned, or recall loaned shares in order to preserve the right tovote on proxy issues.


INVESTMENT RETURNS


INVESTMENTS

ANNUALIZED2012 3-YEAR 5-YEAR

TOTAL PORTFOLIOS(1)

2.52% 11.11% 2.46%

Equity SegmentCommon Pension Fund A (Domestic Equities) 3.58 16.68 1.79

S&P 1500 Index 4.63 16.76 0.46

Common Pension Fund D (International Equities) (16.53) 3.80 (5.08)MSCI All World Country Index (ex US)-net (14.57) 6.97 (4.62)

Fixed Income Segment Common Pension Fund B (Domestic Fixed Income) 15.89 12.76 10.77

Barclays Long Government/Credit 24.58 14.41 11.00

Alternative Investments Segment Common Pension Fund E 1.63 9.39 0.15

Hedge Funds (1.33) 6.25 (0.74)HFRI Fund of Funds Composite 5.40 2.42 (1.84)

Private Equity 4.85 14.42 3.74Cambridge Private Equity Index (2) 10.83 18.22 6.97

Real Estate 8.30 6.36 (5.50)NCREIF Property Index 12.04 8.82 2.51

Real Assets/Commodities (9.54) 4.40 N/ADJUBS TR Index (14.32) 3.49 N/A

N/A — Not Available

Note: Performance is calculated using the time-weighted return based on the modified Dietz method. (1)

Excludes performance on Police and Fire Mortgages.(2) Cambridge Private Equity Index is reported on one quarter lag.


INVESTMENTS


ACTUAL ALLOCATION VS FY 2012 INVESTMENT PLAN TARGET JUNE 30, 2012

Actual Allocation % Target % Difference % Allocations $

Absolute Return Hedge Funds 2.12 2.00 0.12 1,483.32

Total Capital Preservation 2.12 2.00 0.12 1,483.32

Cash Equivalents(1) 1.71 2.00 (0.29) 1,201.62

US Treasuries 1.80 2.50 (0.70) 1,259.85

Total Liquidity 3.51 4.50 (0.99) 2,461.47

Investment Grade Credit 20.03 20.00 0.03 14,042.13

High Yield Fixed Income 3.56 2.50 1.06 2,496.33

Credit Orient Hedge Funds 2.61 3.00 (0.39) 1,828.42

Debt Related Private Equity 1.05 1.50 (0.45) 737.93

Total Income 27.25 27.00 0.25 19,104.81

Commodities and Other Real Assets 2.82 4.00 (1.18) 1,977.94

TIPS 2.63 3.50 (0.87) 1,841.71

Real Estate 4.67 5.00 (0.33) 3,272.24

Total Real Return 10.12 12.50 (2.38) 7,091.89

US Equity 25.38 23.50 1.88 17,792.29

Non-US Developed Markets Equity 13.80 15.00 (1.20) 9,678.19

Emerging Markets Equity 6.05 5.00 1.05 4,239.35

Equity Oriented Hedge Funds 3.10 5.00 (1.90) 2,172.85

Buyouts/Venture Capital 6.78 5.50 1.28 4,751.04

Total Global Growth 55.11 54.00 1.11 38,633.73

Police and Fire Mortgage Program(2) 1.38 0.00 1.38 967.84

Other Cash and Recievables 0.52 0.00 0.52 366.13

Total Pension Fund 100.00 100.00 0.00 70,109.19

(1) The cash aggregate comprises the four common fund cash accounts, in addition to the seven plan cash accounts.(2) Police & Fire Mortgage Program is not included in target asset allocation; assets are private mortgages that cannot be sold.Totals may not equal sum of components due to rounding.


INVESTMENTS


STATE OF NEW JERSEY COMPOSITEASSET ALLOCATION HISTORY

*Alternative Investment Program started9/05


INVESTMENTS


U.S. EQUITIESPortfolio Sector Weightings

June 30, 2012

INTERNATIONAL EQUITIES MARKETSPortfolio Sector Weightings

June 30, 2012


INVESTMENTS


LIST OF THE LARGEST ASSETS HELDLARGEST DOMESTIC STOCK HOLDINGS (BY FAIR VALUE)

JUNE 30, 2012

SHARES STOCKFAIR VALUE

(USD)1) 1,812,000 Apple Inc. $1,058,208,000

2) 5,716,834 Exxon Mobile Corp. 489,189,485

3) 21,155,000 General Electric Co. 440,870,200

4) 12,150,000 Microsoft Corp. 371,668,500

5) 7,045,909 Merck & Co. Inc. 294,166,701

6) 8,404,890 Wells Fargo Co. 281,059,522

7) 7,350,000 J.P. Morgan Chase & Co. 262,615,500

8) 11,346,425 Pfizer Inc. 260,967,775

9) 3,744,945 Proctor & Gamble 229,377,881

10) 2,601,000 Philip Morris International 226,963,260

PAR BONDS COUPON DUEFAIR VALUE

(USD)1) 372,139,846 US Treasury Tips 2.000% 1/15/2026 $474,914,4512) 320,417,750 US Treasury Tips 2.125 2/15/2041 457,296,3683) 310,000,000 US Treasury Bonds 6.000 2/15/2026 454,440,7804) 294,676,250 US Treasury Tips 2.500 1/15/2029 408,932,2515) 215,598,500 US Treasury Tips 1.125 1/15/2021 248,106,6576) 295,000,000 US Treasury Strips 0.000 2/15/2025 222,196,6557) 300,000,000 US Treasury Strips 0.000 8/15/2025 221,477,4008) 130,000,000 Verizon Communications 8.950 3/1/2039 214,121,0509) 175,000,000 Providence of British Columbia 2.650 9/22/2021 185,392,200

10) 105,000,000 General Electric Capital Corp. 6.750 3/15/2032 130,009,215

LARGEST DOMESTIC BOND HOLDINGS (BY FAIR VALUE)JUNE 30, 2012

A complete listing of the portfolio is available on the Division of Investment’sWeb site at www.state.nj.us/treasury/doinvest.


INVESTMENTS


LARGEST INTERNATIONAL STOCK HOLDINGS (BY FAIR VALUE)JUNE 30, 2012

SHARES STOCKFAIR VALUE

(USD)1) 44,852,700 Vanguard MSCI Emerging Markets $1,791,865,365

2) 25,900,000 IShares MSCI EAFE Index Fund 1,293,964,000

3) 12,200,000 IShares MSCI Emerging Markets 478,118,000

4) 8,210,338 Glaxosmithkline PLC 186,337,529

5) 11,000,000 IShares S+P/TSX 60 Index Fund 179,224,091

6) 877,642 Roche Holding AG Genusschein 151,698,078

7) 4,912,290 Diageo PLC 126,510,891

8) 1,236,208 Anheuser Busch Inbev NV 96,168,041

9) 795,425 L Oreal Prime De Fidelite 93,330,046

10) 4,261,475 BG Group PLC 86,890,853



INVESTMENTS


DOMESTIC EQUITY TRADINGFISCAL YEAR 2012

DOMESTIC EQUITY BROKERS SHARES(1)

TOTALCOMMISSIONS(1)

COMMISSIONS PER SHARE

Instinet LLC 34,742,708 $1,236,511 $0.036JP Morgan Securities LLC 30,304,195 1,211,999 0.040Citigroup Global Markets Inc 22,218,000 885,000 0.040CAPIS 17,202,000 860,100 0.050Sanford C. Bernstein & Co., LLC 45,140,039 720,999 0.016Morgan Stanley & Co. LLC 18,849,335 682,001 0.036UBS Securities LLC 20,923,336 629,000 0.030Credit Suisse Securities LLC 41,016,610 626,205 0.015Deutsche Bank Securities 17,506,452 574,800 0.033Barclays Capital Inc. 12,918,888 515,996 0.040

(1) Excludes options written on approximately 41.3 million shares with total commissions of $1,694,691.

INTERNATIONAL EQUITY TRADINGFISCAL YEAR 2012

INTERNATIONAL EQUITY BROKERS SHARESTOTAL

COMMISSIONSCOMMISSIONS

PER SHARECredit Suisse AG 107,023,317 $1,230,249 $0.011Credit Agricole Securities Inc. 58,870,547 453,747 0.008Deutsche Bank Securities Inc. 87,201,439 435,218 0.005Morgan Stanley & Co. LLC 247,919,086 388,521 0.002Instinet LLC 70,813,899 376,423 0.005Goldman, Sachs & Co. 43,222,811 369,010 0.009WallachBeth Capital, LLC 28,350,000 274,124 0.010Citigroup Global Markets Inc. 9,711,733 260,392 0.027CAPIS 57,032,120 256,729 0.005G-Trade Services LLC 78,369,997 245,672 0.003


ACTUARIAL SECTION


September 14, 2012

Board of TrusteesPublic Employees' Retirement System

of New Jersey

Re: Actuary’s Certification Letter

Members of the Board:

An actuarial valuation of the Public Employees’ Retirement System of New Jersey (“PERS”) is performedannually to measure the ongoing costs of the System (with required contributions determined separately forthe State and Local employers) and the progress towards the funding goals of the System over time. In gen-eral, the financial goals of the PERS are a pattern of contributions, which is sufficient to cover the normalcost of the System plus the contribution towards the unfunded accrued liability.

In accordance with the New Jersey statutes, employers are required to make two contributions to theSystem, a normal contribution and an accrued liability contribution. The normal contribution for basicallowances and cost of living adjustments (COLA’s) is defined under the Projected Unit Credit fundingmethod as the present value of the benefits accruing during the current year. Prior to the July 1, 2010 val-uation, the unfunded accrued liability contribution for basic allowances and COLA’s was determined as alevel percentage of pay required to amortize the unfunded accrued liability over 30 years in annual pay-ments increasing by 4% per year. The funding reform provisions of Chapter 78, P.L. 2011 changed themethodology used to amortize the unfunded accrued liability. Beginning with the July 1, 2010 actuarial val-uation, the accrued liability contribution shall be computed so that if the contribution is paid annually inlevel dollars, it will amortize the unfunded accrued liability over an open 30 year period. Beginning withthe July 1, 2019 actuarial valuation, the accrued liability contribution shall be computed so that if the con-tribution is paid annually in level dollars it will amortize the unfunded accrued liability over a closed 30year period (i.e., for each subsequent actuarial valuation, the amortization period shall decrease by oneyear). Beginning with the July 1, 2029 actuarial valuation when the remaining amortization period reach-es 20 years, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gainsfor subsequent valuation years shall serve to increase or decrease, respectively, the amortization period forthe unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 20 years.If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 20years, the accrued liability contribution shall be computed for the valuation year using a 20 year amortiza-tion period.

The valuation reflects the final provisions of the Appropriation Act for fiscal year 2011. The State fiscal year2011 recommended pension contribution amount of $754,168,635 was reduced to $0.

The valuation reflects the funding reform provisions of Chapter 1, P.L. 2010. Chapter 1, P.L. 2010 allows theState Treasurer to phase in to the full recommended pension contribution. The State would be in compli-ance with its funding requirement provided the State makes a payment of at least 1/7th of the full contri-bution, as computed by the actuaries, in the State fiscal year commencing July 1, 2011 and makes apayment in each subsequent fiscal year that increases by at least an additional 1/7th until payment of thefull contribution is made in the seventh fiscal year and thereafter. Therefore, the fiscal year 2012 recom-


mended State pension contribution of $874,346,428 has been reduced to $124,906,634 and has been rec-ognized as a receivable contribution for purposes of this valuation. This amount may be subject to changeper the requirements of the State’s fiscal year 2012 spending plan.

The valuation again reflects the provisions of Chapter 42, P.L. 2002, which allowed Local employers to issuerefunding bonds to retire the unfunded accrued liability due to certain early retirement incentive programs.

The valuation reflects Chapter 19, P.L. 2009, which allowed the State Treasurer to reduce Local employers’normal and accrued liability contributions to 50% of the amount certified for the State fiscal year 2009. Inaddition, certain Local employers who were eligible under Chapter 19, P.L. 2009 to defer 50% of their Statefiscal year 2009 pension contribution but did not were permitted to defer 50% of their State fiscal year2010 recommended pension contribution. This unfunded liability will be paid by the Local employers in levelannual payments over a period of 15 years with the first payment due in the fiscal year ending June 30,2012. The unfunded liability will be adjusted by the rate of return on the actuarial value of assets. The leg-islation also provides that a Local employer may pay 100% of the recommended contributions for State fis-cal years 2009 and 2010. Such an employer will be credited with the full payments and any such amountswill not be included in their unfunded liability.

The underlying demographic data is maintained and provided by the New Jersey Division of Pensions andBenefits. The data is analyzed by Buck Consultants, for internal completeness and consistency and comparedwith the prior valuation data to again ensure consistency.

As stipulated in the statutes, an actuarial investigation of the demographic experience of the members andbeneficiaries of PERS is made once in every three-year period. The contributions for the fiscal year begin-ning July 1, 2012 were based on the actuarial assumptions that were determined from the July 1, 2005 toJune 30, 2008 Experience Study and approved by the Board of Trustees. As mandated by the Statutes, theseassumptions will remain in effect for valuation purposes until such time the Board adopts revised demo-graphic assumptions.

The Treasurer, upon recommendation from the Directors of the Division of Pensions and Benefits and theDivision of Investments, has recommended a change in the economic assumptions used for the valuation.The rate of investment return has been revised from 8.25% per annum to 7.95% per annum, and theassumed salary increases have been reduced by 2.00% per annum for fiscal year ending 2012 through fis-cal year ending 2016 and reduced by 0.75% per annum for fiscal years ending 2017 and thereafter. Theseeconomic assumptions will remain in effect for valuation purposes until such time as the Treasurer recom-mends revised economic assumptions.

The valuation cost method used is the projected unit credit method. This method essentially funds theSystem’s benefits accrued to the valuation date. Experience gains and losses are recognized in futureaccrued liability contributions. The asset valuation method used was a five-year average of market valueswith write-up. This method takes into account appreciation (depreciation) in investments in order to smoothasset values by averaging the excess of the actual over the expected income, on a market value basis, overa five-year period.

The valuation does not take into account any changes in U.S. equity prices and bond yields that haveoccurred after the valuation date. Taking these into account may significantly change the market and actu-arial value of assets shown. The effect of these events on any funded ratios shown, and on RetirementSystem calculations, is not known. Retirement System funding and financial accounting rules generally pro-hibit reflection of changes in assets and underlying economic conditions that occur after the valuation date.

The assumptions used to prepare the information required by Statements No. 25, No. 27 and No. 50 of theGovernmental Accounting Standards Board (GASB) were the same as those used for funding purposes.


In our opinion, the attached schedules of valuation results fairly represent the status of the PERS and pres-ent an accurate view of historical data. The underlying assumptions and methods used for both funding andGASB disclosure purposes are consistent with the statutory specifications and represent a best estimate ofthe aggregate future experience of the System.

The following supporting schedules in the Actuarial Section were prepared by Buck Consultants:

• Summary of Actuarial Assumptions and Methods

• Schedule of Retired Members and Beneficiaries Added To and Removed From Rolls

• Schedule of Active Member Valuation Data

• Solvency Test

• Analysis of Past Financial ExperienceReconciliation of Employer Contribution Rates

• Brief Summary of the Benefit and Contribution Provisions as Interpreted for Valuation Purposes

In addition, Buck Consultants prepared the “Schedule of Funding Progress” and the “Schedule of EmployerContributions” in the Financial Section.

To the best of our knowledge, this information is complete and accurate. The valuation was performed by,and under the supervision of, independent qualified actuaries who are members of the American Academyof Actuaries with experience in performing valuations for public retirement systems.

The valuation was prepared in accordance with the principles of practice prescribed by the ActuarialStandards Board and generally accepted actuarial procedures and methods. The calculations are based onthe current provisions of the Retirement System, and on actuarial assumptions that are individually and inthe aggregate internally consistent and reasonable based on the actual experience of the Retirement System.


Buck Consultants

Janet H. Cranna, M.A.A.A., F.S.A., E.A., F.C.A., M.S.P.P.A.

Principal, Consulting Actuary




SUMMARY OF ACTUARIAL ASSUMPTIONS AND METHODS

Section 19 of Chapter 15A of the New Jersey Statutes provides that once in every three-year period the actuaryshall examine in detail the demographic experience of the members and beneficiaries of the PERS to assure thatthe tables used for determining expected liabilities are consistent with recent experience.

The demographic assumptions used for the July 1, 2011 actuarial valuation of the PERS were based on the resultsof the experience study, which covered the period from July 1, 2005 to June 30, 2008, which were approved bythe Board of Trustees, and the revised economic assumptions, which were recommended by the Treasurer.

An outline of the actuarial assumptions and methods used for the July 1, 2011 valuation is as follows:

Valuation Interest Rate: 7.95% per annum, compounded annually.

Employee Contribution Rate: 7.95% per annum.

COLA: No future COLA is assumed.

Separations From Service and Salary Increases: Representative values of the assumed annual rates of separationand annual rates of salary increases are as follows:

Age

Annual Rates ofSelect Withdrawal Ultimate Withdrawal*

1st Year 2nd Year 3rd YearPrior to Eligibility

for BenefitAfter Eligibility

for BenefitState Local State Local State Local State Local State Local

25 28.90% 29.23% 13.53% 15.12% 9.52% 12.19% 5.86% 7.43% — —30 28.90 27.02 13.53 14.67 9.52 10.09 4.25 6.43 — 0.03%35 20.91 22.34 10.83 11.74 7.99 7.53 3.00 3.80 0.05% 0.0440 17.32 21.37 8.86 10.52 6.37 6.92 1.80 2.77 0.05 0.0645 16.33 20.68 8.26 10.08 5.79 6.49 1.22 2.46 0.19 0.1950 16.33 20.65 7.65 9.58 5.21 6.00 .90 1.85 0.70 0.6255 16.33 20.33 7.65 9.40 5.21 5.69 .90 1.52 0.70 0.62

*The rates of withdrawal prior to eligibility for a benefit assumes a refund of contributions. The rates assumedfor members withdrawing with a benefit is the sum of the rates of withdrawal after eligibility and those priorto eligibility.




SUMMARY OF ACTUARIAL ASSUMPTIONS AND METHODS, Continued

Annual Rates of

Age

Service Retirement

Salary Increases

State LocalFY2012 to

FY2016FY2017 andthereafter

25 4.40% 5.65%

30 4.15 5.40

35 3.90 5.15

40 3.65 4.90

45 3.40 4.65

50 3.15 4.40

55 15.40% 11.70% 2.90 4.15

60 8.80 7.80 2.65 3.90

65 23.10 22.05 2.15 3.40

69 15.00 11.55 2.15 3.40

** RP-2000 Employee Preretirement mortality table for male and female active participants. For State, bothmale and female mortality tables are set back 1 year. For employees of Local employers, the female mor-tality is set back 4 years.

Age

Annual Rates of

Ordinary Death** Accidental Death Ordinary Disability Accidental Disability

State Local

State Local State Local State LocalMale Female Male Female25 0.04% 0.02% 0.04% 0.02% 0.001% 0.001% 0.01% — 0.001% 0.002%

30 0.04 0.03 0.04 0.02 0.001 0.001 0.10 0.07% 0.003 0.004

35 0.07 0.04 0.08 0.03 0.001 0.001 0.24 0.22 0.009 0.004

40 0.10 0.07 0.11 0.05 0.001 0.001 0.34 0.39 0.015 0.008

45 0.14 0.10 0.15 0.08 0.001 0.001 0.51 0.39 0.019 0.010

50 0.20 0.16 0.21 0.12 0.001 0.001 0.58 0.51 0.023 0.014

55 0.28 0.23 0.30 0.18 0.001 0.001 0.82 0.77 0.032 0.018

60 0.44 0.36 0.49 0.28 0.001 0.001 1.59 0.99 0.041 0.023

65 0.70 0.54 0.76 0.43 0.001 0.001 1.65 1.22 0.050 0.025

69 0.91 0.70 0.95 0.58 0.001 0.001 1.97 1.45 0.052 0.025





Marriage: Husbands are assumed to be 3 years older than wives. Among the active population, 100% ofparticipants are assumed to be married

Valuation Method: Projected Unit Credit Method. This method essentially funds the System’s benefitsaccrued to the valuation date. Experience gains or losses are recognized in future accrued liability con-tributions. In accordance with Chapter 78, P.L. 2011, beginning with the July 1, 2010 actuarial valua-tion, the accrued liability contribution shall be computed so that if the contribution is paid annually inlevel dollars, it will amortize the unfunded accrued liability over an open 30 year period. Beginning withthe July 1, 2019 actuarial valuation, the accrued liability contribution shall be computed so that if thecontribution is paid annually in level dollars it will amortize the unfunded accrued liability over a closed30 year period (i.e., for each subsequent actuarial valuation, the amortization period shall decrease byone year). Beginning with the July 1, 2029 actuarial valuation when the remaining amortization periodreaches 20 years, any increase or decrease in the unfunded accrued liability as a result of actuarial loss-es or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amorti-

Service Retirements Disability RetirementsAge Men Women Age Men Women55 0.36% 0.24% 35 2.26% 0.75%60 0.68 0.44 40 2.26 0.7565 1.27 0.86 45 2.26 0.7570 2.22 1.49 50 2.51 1.0675 3.78 2.55 55 3.16 1.5580 6.44 4.15 60 3.80 2.0885 11.08 6.95 65 4.50 2.66

Prosecutors Part (Chapter 366, P.L. 2001): This legislation introduced special retirement eligibility forcertain benefits. The valuation used the following annual rates of service retirement:

Age

Annual Rate of RetirementLess Than 20 Years

20 Years 21 to 24 Years

25 or More Years

State Local State Local

40 0.00% 0.00% 2.50% 0.00% 23.10% 15.40%

45 0.00 0.00 2.50 0.00 23.10 15.40

50 0.00 0.00 3.75 0.00 23.10 15.40

55 2.59 3.06 5.00 0.00 26.22 17.48

60 2.63 3.06 5.00 0.00 34.17 22.78

65 2.63 3.06 37.50 0.00 100.00 100.00

69 2.63 3.06 37.50 0.00 100.00 100.00

Deaths After Retirement: The RP2000 Combined Healthy Male and Female Mortality Tables (set back 1year for females) for service retirement and beneficiaries of former members. The RP2000 DisabledMortality Tables (set back 3 years for males and set back 1 year for females) are used to value disabledretirees. No provision has been made for mortality improvement after the valuation date. Representativevalues of the assumed annual rates of mortality are as follows:





zation period for the unfunded accrued liability, unless an increase in the amortization period will cause itto exceed 20 years. If an increase in the amortization period as a result of actuarial losses for a valuationyear would exceed 20 years, the accrued liability contribution shall be computed for the valuation year usinga 20 year amortization period.

Chapter 78, P.L. 2011 increases the member contribution rate from 5.5% to 6.5% of compensation with theincrease effective October 2011. Further, beginning July 2012, the member contribution rate will increase by1/7th of 1% each year until a 7.5% member contribution rate is reached in July 2018. Based on discussionswith the Division of Pensions and Benefits, member contributions in excess of 5.5% of compensation shallnot reduce the employers’ normal cost contributions.

Expenses: Payable from excess investment return.

Asset Valuation Method: A five-year average of market values with write-up was used. This method takes intoaccount appreciation (depreciation) in investments in order to smooth asset values by averaging the excessof the actual over the expected income, on a market value basis, over a five-year period.




SCHEDULE OF RETIRED MEMBERS AND BENEFICIARIESADDED TO AND REMOVED FROM ROLLS

STATE

LOCAL EMPLOYERS

TOTAL SYSTEM

* These values include beneficiaries in receipt but exclude deferred vested terminations.

** The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.

ValuationDate

Added to Rolls Removed From Rolls Rolls at End of Year% Increasein AnnualAllowance

AverageAnnual

AllowanceNumberAnnual

Allowance NumberAnnual

Allowance*

NumberAnnual**Allowance

7/1/11 4,365 $135,383,063 1,782 $28,241,754 47,590 $1,133,192,150 11.40% $23,812

7/1/10 2,628 74,214,851 1,456 22,991,138 45,007 1,017,211,463 5.32 22,601

7/1/09 3,691 114,125,640 1,587 23,763,321 43,835 965,850,034 13.38 22,034

7/1/08 2,376 59,667,932 1,282 18,580,725 41,731 851,858,427 6.45 20,413

7/1/07 3,099 75,984,568 1,586 20,983,838 40,637 800,218,401 9.98 19,692

7/1/06 2,468 57,895,903 1,520 21,774,243 39,124 727,626,210 7.25 18,598

ValuationDate


AverageAnnual



Allowance*


7/1/11 9,296 $195,153,024 4,529 $48,064,677 100,495 1,541,951,837 11.54% $15,344

7/1/10 6,182 115,153,073 3,805 42,585,361 95,728 1,382,400,685 5.56 14,441

7/1/09 5,826 101,661,331 3,761 39,550,280 93,351 1,309,554,538 7.86 14,028

7/1/08 6,077 101,843,543 3,247 33,727,154 91,286 1,214,076,086 7.35 13,300

7/1/07 6,583 105,522,066 3,779 36,462,528 88,456 1,130,911,550 9.04 12,785

7/1/06 5,899 92,148,903 3,237 30,601,929 85,652 1,037,131,592 8.31 12,109

ValuationDate


AverageAnnual



Allowance*


7/1/11 13,661 $330,536,087 6,311 $76,306,431 148,085 $2,675,143,987 11.48% $18,065

7/1/10 8,810 189,367,924 5,261 65,576,499 140,735 2,399,612,148 5.46 17,051

7/1/09 9,517 215,786,971 5,348 63,313,601 137,186 2,275,404,572 10.14 16,586

7/1/08 8,453 161,511,475 4,529 52,307,879 133,017 2,065,934,513 6.98 15,531

7/1/07 9,682 181,506,634 5,365 57,446,366 129,093 1,931,129,951 9.43 14,959

7/1/06 8,367 150,044,806 4,757 52,376,172 124,776 1,764,757,802 7.87 14,143




SCHEDULE OF ACTIVE MEMBER VALUATION DATA

STATE

Valuation Date

Number of Active

ContributingMembers

AnnualCompensation

AverageCompensation

% Increase in Average

Compensation

7/1/11 77,109 $4,608,926,826 $59,772 6.44%7/1/10 81,288 4,564,850,886 56,157 0.867/1/09 83,102 4,627,092,235 55,680 2.917/1/08 85,182 4,609,019,779 54,108 4.177/1/07 85,382 4,434,933,181 51,942 5.597/1/06 86,468 4,253,564,219 49,192 3.36

LOCAL EMPLOYERS

Valuation Date

Number of Active

ContributingMembers

AnnualCompensation

AverageCompensation


Compensation

7/1/11 171,881 $7,000,115,900 $40,727 2.98%7/1/10 187,526 7,416,503,897 39,549 3.377/1/09 192,582 7,368,354,906 38,261 2.237/1/08 192,566 7,206,781,046 37,425 3.337/1/07 192,819 6,983,534,635 36,218 3.367/1/06 192,073 6,730,309,209 35,040 3.16

TOTAL SYSTEM

Valuation Date

Number of Active

ContributingMembers

AnnualCompensation

AverageCompensation


Compensation

7/1/11 248,990 $11,609,042,726 $46,625 4.61%7/1/10 268,814 11,981,354,783 44,571 2.437/1/09 275,684 11,995,447,141 43,512 2.287/1/08 277,748 11,815,800,825 42,541 3.657/1/07 278,201 11,418,467,816 41,044 4.087/1/06 278,541 10,983,873,428 39,434 3.28




SOLVENCY TEST

STATE

ValuationDate

Accrued Liabilities for

Net Assets Available for

Benefits*

Percentage of Accrued Liabilities Covered by Net Assets Available

(1)Aggregate Member

Contributions

(2)Current Retirees& Beneficiaries

(3)Active & Inactive

Members (1) (2) (3)7/1/11 $4,295,868,689 $10,055,639,293 $3,939,321,039 $10,062,648,618 100.00% 57.35% 0.00%7/1/10 4,218,496,038 8,891,761,902 4,318,920,081 10,253,254,901 100.00 67.87 0.007/1/09 3,917,520,867 9,576,933,235 5,452,740,477 10,713,340,747 100.00 70.96 0.007/1/08 3,772,347,015 8,123,305,516 5,177,050,149 11,252,321,606 100.00 92.08 0.007/1/07 3,460,228,558 7,660,455,350 4,908,191,693 11,228,946,178 100.00 100.00 2.217/1/06 3,240,528,331 6,944,311,434 4,612,844,681 10,884,275,126 100.00 100.00 15.16

ValuationDate



Benefits*


(1)Aggregate Member

Contributions



Members (1) (2) (3)7/1/11 $6,244,282,760 $13,077,334,135 $5,357,478,680 $18,997,383,783 100.00% 97.52% 0.00%7/1/10 6,130,352,551 11,541,556,714 6,246,748,779 18,481,952,370 100.00 100.00 12.977/1/09 5,692,517,632 12,298,679,145 7,532,011,799 18,165,835,669 100.00 100.00 2.327/1/08 5,242,130,640 11,030,079,191 6,900,974,142 18,251,200,411 100.00 100.00 28.687/1/07 4,847,097,344 10,290,632,227 6,626,485,022 17,704,248,133 100.00 100.00 38.737/1/06 4,506,087,883 9,415,236,202 6,352,655,755 16,928,660,300 100.00 100.00 47.34

LOCAL EMPLOYERS

ValuationDate



Benefits*


(1)Aggregate Member

Contributions



Members (1) (2) (3)7/1/11 $10,540,151,449 $23,132,973,428 $9,296,799,719 $29,060,032,401 100.00% 80.06% 0.00%7/1/10 10,348,848,589 20,433,318,616 10,565,668,860 28,735,207,271 100.00 89.98 0.007/1/09 9,610,038,499 21,875,612,380 12,984,752,276 28,879,176,416 100.00 88.09 0.007/1/08 9,014,477,655 19,153,384,707 12,078,024,291 29,503,522,017 100.00 100.00 11.067/1/07 8,307,325,902 17,951,087,577 11,534,676,715 28,933,194,311 100.00 100.00 23.197/1/06 7,746,616,214 16,359,547,636 10,965,500,436 27,812,935,426 100.00 100.00 33.80

TOTAL SYSTEM

* Actuarial Value including receivable amounts but excluding postretirement medical fund assets.




ANALYSIS OF PAST FINANCIAL EXPERIENCE RECONCILIATION OF EMPLOYER CONTRIBUTION RATES

STATEValuation Year

July 1,2011

July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1,2006

Prior Year Contribution Rate 19.15%ø 16.28%ø 12.59%ø 11.42%ø 10.81%ø 9.61%Net Change Due to:Current New Entrants 0.00 0.04 0.09 0.07 0.09 0.05Excess Salary Increases 0.24 (0.22) (0.05) 0.07 0.25 0.07Assumption/Method Changes (1.28) 0.00 1.40 0.00 0.00 1.00COLA Increases and Phase-In (0.13) (0.07) 0.17 0.01 0.12 0.05Active Experience 0.27 0.15 0.02 0.02 0.05 0.01Other Experience (0.16) 0.23 0.14 0.08 0.09 (0.05)Investment Loss/(Gain) 0.48 0.65 0.90 0.36 0.14 0.41Non-Contributory Group Insurance

Premium Fund Experience N/A N/A N/A N/A N/A (0.02)Chapter 133 Benefit Improvements** 0.00 0.00 0.00 0.00 0.00 0.06Net Effect of Chapter 133* 0.00 0.00 0.00 0.00 0.00 0.00Chapter 366 Benefit Improvement 0.00 0.01 0.00 (0.01) 0.00 0.00Net Effect of Chapter 366 0.01 0.03 0.00 0.00 0.02 0.00Effect of Chapter 23 0.00 0.00 0.00 0.00 0.00 0.00

Appropriation Actøø 1.48 1.03 0.78 0.60 0.35 0.20Chapter 21, P.L. 2008 N/A N/A 0.24 N/A N/A N/AChapter 103, P.L. 2007 N/A N/A N/A (0.03) (0.50) N/AChapter 78, P.L. 2011 N/A 1.02 N/A N/A N/A N/AActual Pension Contribution Rate:

• Prior to reflecting Chapter 1, P.L. 2010 20.06%ø 19.15%ø 16.30%ø 12.59%ø 11.42%ø 11.39%

• After reflecting Chapter 1, P.L. 2010 5.73%ø 2.74%ø N/A N/A N/A N/A




ANALYSIS OF PAST FINANCIAL EXPERIENCE RECONCILIATION OF EMPLOYER CONTRIBUTION RATES

* The additional annual employer normal contribution for the increase in benefits is funded by assets accumulatedin the Benefit Enhancement Fund.

** Includes the effect of additional cost due to Chapter 353, P.L. 2000.

ø Excludes contribution rates payable to the Non-Contributing Group Insurance Premium Fund. For State, the contri-bution rates are 0.74% for 2011, 0.71% for 2010, 0.64% for 2009, 0.62% for 2008, 0.76% for 2007 and 0.58%for 2006. For Local, the contribution rates are 0.63% for 2011, 0.67% for 2010, 0.78% for 2009, 1.09% for 2008,0.89% for 2007 and 0.61% for 2006.

øø Net change due to Appropriation Act for July 1, 2010 includes 0.03% change due to the Fiscal Year 2010Appropriation Act and 1.00% change due to the Fiscal Year 2011 Appropriation Act. Net change for July 1, 2011is due to the provisions of Chapter 1, P.L. 2010.

# to the reallocation of State paid Local obligations due to Chapter 133, P.L. 2001 and Chapter 366, P.L. 2001.

## After the reallocation of State paid Local obligations due to Chapter 133, P.L. 2001 and Chapter 366, P.L. 2001.

LOCAL EMPLOYERSValuation Year

July 1,2011

July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1,2006

Prior Year Contribution Rate# 11.32%ø 11.12%ø 8.67%ø 7.99%ø 7.94%ø 6.70%

Net Change Due to:

Current New Entrants 0.03 0.08 0.16 0.11 0.11 0.07

Excess Salary Increases (0.12) (0.08) (0.10) 0.05 0.07 0.04

Assumption/Method Changes (0.93) 0.00 1.21 0.00 0.00 0.88

COLA Increases and Phase-In (0.11) (0.05) 0.14 0.01 0.10 0.07

Active Experience 0.26 0.10 (0.05) (0.01) (0.03) 0.10

Other Experience 0.21 (0.04) 0.07 0.11 0.02 0.02

Investment Loss/(Gain) 0.77 0.77 0.98 0.45 0.20 0.46

Non-Contributory Group Insurance

Premium Fund Experience N/A N/A N/A N/A N/A 0.03

Chapter 133 Benefit Improvements** (0.13) 0.00 0.03 (0.01) 0.00 0.04

Net Effect of Chapter 133* (0.69) (0.81) (0.81) (0.78) (0.79) (0.79)

Chapter 366 Benefit Improvement (0.01) 0.00 0.01 (0.01) 0.00 0.00

Net Effect of Chapter 366 (0.02) (0.04) (0.04) (0.03) (0.04) (0.04)

Chapter 108, P.L. 2003 0.00 0.00 0.00 0.00 0.08 0.14

Chapter 103, P.L. 2007 0.00 0.00 0.00 (0.02) (0.50) N/A

Chapter 78, P.L. 2011 N/A (0.58) N/A N/A N/A N/A

Actual Contribution Rate## 10.58%ø 10.47%ø 10.27%ø 7.86%ø 7.16%ø 7.72%


1. DEFINITIONSFinal Compensation (FC): Average annual com-pensation for the three years of creditable serviceimmediately preceding retirement or the highestthree fiscal years of membership service. EffectiveJune 30, 1996, Chapter 113, P.L. 1997 providedthat the amount of compensation used for employ-er and member contributions and benefits underthe program cannot exceed the compensation lim-itation of Section 401(a)(17) of the InternalRevenue Code. Chapter 103, P.L. 2007 providesthat for Class D, Class E, Class F and Class G mem-bers, the amount of compensation used foremployer and member contributions and benefitsunder the System cannot exceed the annual maxi-mum wage contribution base for Social Security,pursuant to the Federal Insurance ContributionsAct. Chapter 1, P.L. 2010 provides that for Class Fand Class G members FC is the average annual com-pensation for the five years of creditable serviceimmediately preceding retirement or the highestfive fiscal years of membership service.

Accumulated Deductions: Sum of all requiredamounts deducted from the compensation of amember or contributed by him.

Class B Member: Any member who was hired priorto July 1, 2007.

Class D Member: Any member who was hired on orafter July 1, 2007 but prior to November 2, 2008.

Class E Member: Any member who was hired afterNovember 1, 2008 but prior to May 22, 2010.

Class F Member: Any member who was hired on orafter May 22, 2010 but prior to June 28, 2011.

Class G Member: Any member who was hired on orafter June 28, 2011.

2. BENEFITS*Service Retirement: Eligible at age 60. Benefitequals a member annuity plus an employer pen-sion, which together, equal 1/55th of FC for eachyear of service. Chapter 89, P.L. 2008 changed the

eligibility age to age 62 for Class E members,Chapter 1, P.L. 2010 changed the eligibility age toage 62 for Class F members and changed the basicaccrual rate from 1/55th to 1/60th of FC for eachyear of service for Class F and Class G members andChapter 78, P.L. 2011 changed the eligibility ageto age 65 for Class G members.

Ordinary Disability Retirement: Eligible after 10years of service. Benefit equals a member annuityplus an employer pension which, together, equal1.64% of FC for each year of service; minimumbenefit of 43.6% of FC. Class F and Class G mem-bers are not eligible for an Ordinary DisabilityRetirement benefit in accordance with Chapter 3,P.L. 2010.

Accidental Disability: Eligible upon total and per-manent disability prior to age 65 as a result of aduty injury. Benefit equals a member annuity plusan employer pension which, together, equal 72.7%of contributory compensation at the date of injury.Class F and Class G members are not eligible for anAccidental Disability Retirement benefit in accor-dance with Chapter 3, P.L. 2010.

Lump Sum Withdrawal: Eligible upon service ter-mination prior to age 60 (age 62 for Class E andClass F members and age 65 for Class G members)and prior to 10 years of service. Benefit equalsrefund of accumulated deductions plus, if themember has completed three years of service,interest allowed thereon.

Vested Retirement: Eligible after 10 years of serv-ice. Benefit equals the lump sum benefit describedabove or a deferred retirement benefit, commenc-ing at age 60 (age 62 for Class E and Class F mem-bers and age 65 for Class G members), equal to theservice retirement benefit based on service and FCat date of termination.

Early Retirement: Eligible after 25 years of service(30 years of service for Class G members). Benefitequals the lump sum benefit described above orthe vested benefit reduced by 1/4 percent for each



BRIEF SUMMARY OF THE BENEFIT AND CONTRIBUTION PROVISIONSAS INTERPRETED FOR VALUATION PURPOSES

* Special benefits for veterans, law enforcement officers, legislators, prosecutors, and workers’ compensation judges are summarized at theend of this section.


month the retirement date precedes age 55.Chapter 103, P.L. 2007 provides that for Class Dmembers, the reduction shall be 1/12 percent foreach month (up to 60 months) the retirement dateprecedes age 60 plus 1/4 percent for each monththe retirement date precedes age 55. Chapter 89,P.L. 2008 and Chapter 1, P.L. 2010 provides thatfor Class E and Class F members, the reductionshall be 1/12 percent for each month (up to 84months) the retirement date precedes age 62 plus1/4 percent for each month the retirement dateprecedes age 55. Chapter 78, P.L. 2011 providesthat for Class G members, the reduction shall be1/4 percent for each month the retirement dateprecedes age 65.

Ordinary Death (Insured):BEFORE RETIREMENT

Eligible if active. Benefit equals accumulated deduc-tions with interest plus an amount equal to 1-1/2times contributory compensation at date of death.

AFTER RETIREMENT

Before Age 60:Eligible if disabled or vested terminated. Benefitequals 1 1/2 times last contributory compensationif disabled, accumulated deductions only if vestedterminated.

After Age 60 or Early Retirement:Eligible after early retirement or after attainmentof age 60 for other types of retirement (if not dis-abled, 10 years of service credit required on mem-bers enrolling after July 1, 1971). Benefit equals3/16 of last contributory compensation.

Voluntary Death Benefit: An additional, employ-ee-paid, death benefit is also available throughthe purchase of group insurance with an outsidecarrier.

Accidental Death: Eligible upon death resulting dur-ing performance of duty. Benefit varies as follows:

Widow(er) - 50% of contributory compensationpaid as pension.

Child(ren) - No spouse - 20% (1 child), 35% (2children), 50% (3 or more children) of contributo-

ry compensation pension paid as pension to age18 or life if disabled.

Surviving dependent parent - No spouse or child -25% (1 parent) or 40% (2 parents) of contributo-ry compensation paid as pension.

No relation above - Accumulated deductions paidto other beneficiary or estate.

In addition, the employer-paid lump sum ordinarydeath benefit is paid.

Optional Benefits: Various forms of payment ofequivalent actuarial value are available toretirees.

Special Benefits:

VETERANS

Service Retirement:Eligible if member on January 2, 1955, attains age60, completes 20 years of service. Benefit equals54.5% of final contributory compensation (veteranmembers after January 2, 1955 must attain age 55with 25 years of service or age 60 with 20 years ofservice.

Chapter 220 Benefit:Eligible if age 55 and completes 35 years of serv-ice. Benefit equals 1/55th of the compensationfor the 12-month period of membership that pro-vides the largest possible benefit multiplied by themember’s total years of service.

LAW ENFORCEMENT

Service Retirement:Eligible at age 55 after 20 years of service. Benefitequals a member annuity plus an employer pensionwhich, together, equal 2% of final contributorycompensation for each of the first 25 years of serv-ice plus 1% of such compensation for non-contrib-utory service or service over 25 years plus 1-2/3%for non-law enforcement service.

Chapter 4, P.L. 2001 Special Retirement:After completion of 25 years of service, an addi-tional retirement benefit equal to 5% of finalcontributory pay is added to the above servicerelated retirement benefit. There is a maximumtotal benefit of 70% of final contributory pay.



BRIEF SUMMARY OF THE BENEFIT AND CONTRIBUTION PROVISIONS, Continued


Ordinary Disability:Eligible after 5 years of service. Benefit is thesame as for regular members.

Death After Retirement:Eligible upon death after an accidental disabilityretirement. Benefit is the same as for a regularmember with a $5,000 minimum.

LEGISLATORS

Service Retirement:Eligible at age 60 and termination of all public serv-ice. Benefit is equal to a member annuity plus anemployer pension which, together, equal 3% of finalcontributory compensation for each year of serviceto a maximum of 2/3 of final compensation.

Vested Retirement:Eligible after 8 years of legislative service. Benefitis a service retirement benefit deferred to age 60or, alternatively, a lump sum equal to his accumu-lated deductions.

PROSECUTORS PART (Chapter 366, P.L. 2001)

Service Retirement:Eligibility means age 55 or 20 years of creditedservice. Mandatory retirement at age 70. Benefitis an annual retirement allowance equal to a mem-ber annuity plus an employer pension, whichtogether equals the greater of:

(i) 1/60th of FC for each year service; or

(ii) 2% of FC multiplied by years of service up to30 plus 1% of FC multiplied by years of serviceover 30; or

(iii)50% of final contributory compensation if themember has 20 or more years of service.

Chapter 366 also requires that, in addition toto the 50% of final contributory compensationbenefit, any member as of January 7, 2002who will have 20 or more years of service andis required to retire upon attaining age 70,shall receive an additional benefit equal to 3%of final contributory compensation for each yearof service over 20 years but not over 25 years.

Special Retirement:After completion of 25 years of service. The annu-al retirement benefit is equal to a member annuity

plus an employer pension which together equal65% of final contributory compensation plus 1% offinal contributory compensation for each year ofservice over 25. There is a maximum benefit of70% of final contributory compensation.

Vested Termination:Eligible upon termination of service prior to age 55and after 10 years of Service (but less than 20years). The benefit is a deferred retirement bene-fit, commencing at age 55, equal to a memberannuity plus an employer pension which togetherprovide a retirement allowance equal to 2% of finalcontributory compensation multiplied of serviceup to 30 plus 1% of final contributory compensa-tion multiplied by years of service.

Death Benefits:Ordinary Death Benefit — Lump Sum

After retirement but prior to age 55, the benefit isas follows:

(i) For death while a Disabled Retiree the benefitis equal to 1-1/2 times compensation.

(ii) For death while a Deferred Retiree the benefitis equal to his Accumulated Deductions.

(iii) For death while a Retiree who has completed20 years of service, the benefit is equal to 1/2times final contributory compensation.

After retirement and after age 55, the benefitpayable is equal to ½ times final contributorycompensation.

Chapter 1, P.L. 2010 closes the Prosecutors Part ofthe System to new members enrolled on or afterMay 22, 2010.

WORKERS’ COMPENSATION JUDGES PART (Chapter 259, P.L. 2001)

Service Retirement:A. Mandatory retirement at age 70. Voluntary

retirement prior to age 70 as follows:

a. Age 70 and 10 years of service as a judge ofcompensation;

b. Age 65 and 15 years of service as a judge ofcompensation; or

c. Age 60 and 20 years of service as a judge of





compensation.

Benefit is an annual retirement allowanceequal to the greater of 75% of final salary orthe regular service retirement benefit above.

B. Age 65 while serving as a judge of compensa-tion, 5 consecutive years of service as a judgeof compensation and 15 years in the aggregateof public service; or

Age 60 while serving as a judge of compensa-tion, 5 consecutive years of service as a judgeof compensation and 20 years in the aggregateof public service.

Benefit is an annual allowance equal to thegreater of 50% of final salary or the regularservice retirement benefit above.

C. Age 60 while serving as a judge of compensa-tion, 5 consecutive years as a judge of com-pensation and 15 years in the aggregate ofpublic service. Benefit is an annual retirementallowance equal to the greater of 2% of finalsalary for each year of public service up to 25years plus 1% of final salary for each year inexcess of 25 years or the regular service retire-ment benefit above.

D. Age 60 while serving as a judge of compensa-tion. Benefit is an annual retirement allowanceequal to the greater of 2% of final salary foreach year of service as a judge of compensationup to 25 years plus 1% for each year in excessof 25 years or the regular service retirementbenefit above.

Early Retirement:Prior to age 60 while serving as a judge ofcompensation, 5 consecutive years of serviceas a judge of compensation and 25 or moreyears in the aggregate of public service.Benefit is an annual retirement allowanceequal to 2% of final salary for each year ofpublic service up to 25 years plus 1% of finalsalary for each year of public service in excessof 25 years, actuarially reduced for commence-ment prior to age 60.

Vested Termination:

Termination of service prior to age 60, with 5consecutive years of service as a judge of com-pensation and 10 years in the aggregate ofpublic service. Benefit is a refund of accumu-lated deductions, or a deferred life annuitybeginning at age 60 equal to 2% of final salaryfor each year of public service up to 25 years,plus 1% of service in excess of 25 years.

Death Benefits (Insured):

Before Retirement:Death of an active member of the plan. Benefitis equal to

a. Lump sum payment equal to 1-1/2 times finalsalary, plus

b. Spousal life annuity of 25% of final salary plus10% (15%) to one (two or more) surviving chil-dren payable until spouse’s death or remarriage.If there is no surviving spouse, or upon death orremarriage, a total of 15% (20%, 30%) of finalsalary payable to one (two, three or more)dependent child (children). If there is no surviv-ing spouse (or dependent children), 20% or 30%of final salary to one or two dependent parents.

After Retirement:Death of a retired member of the plan. Benefitis equal to a lump sum of 25% of final salary fora member retired under normal, early retirementor vested termination. If a member were receiv-ing a disability benefit, a lump sum 1-1/2 timesfinal salary if death occurred before the memberattained age 60 and 1/4 times final salary ifdeath occurred after age 60.

Chapter 92, P.L. 2007 closes the WorkersCompensation Judges Part of the System to newmembers enrolled after June 8, 2007.

3. CONTRIBUTIONSBy Members:

Members enrolling in the retirement system on orafter July 1, 1994 will contribute 5% of compen-sation. Members enrolled prior to July 1, 1994 willcontribute 5% of compensation to the retirementsystem effective July 1, 1995 unless they previ-ously had contributed less than 6% in which case





they will contribute 4% of compensation begin-ning July 1, 1995 and 5% of compensation begin-ning July 1, 1996. Chapter 103, P.L. 2007increases the contribution rate to 5.5% of com-pensation effective, generally, July 1, 2007 forState employees and July 1, 2008 for Localemployees. Chapter 78, P.L. 2011 increases thecontribution rate from 5.5% to 6.5% of compensa-tion with the increase effective October 2011.Further, beginning July 2012, the member contri-bution rate will increase by 1/7th of 1% each Julyuntil a 7.5% member contribution rate is reachedin July 2018.

A 7.50% member contribution rate for memberswho are eligible to retire under the ProsecutorsPart of the Retirement System as provided byChapter 366, P.L. 2001 was used prior to July 1,2008. Effective July 1, 2008 the member contri-bution rate was increased to 8.50%. Chapter 78,P.L. 2011 increases the contribution rate from8.5% to 10.0% of compensation with the increaseeffective October 2011.

By Employers:

NORMAL CONTRIBUTION

The State and Local employers pay annually a nor-mal contribution to the retirement System. Thiscontribution is determined each year on the basisof the annual valuation and represents the value ofthe benefits to be earned in the year following thevaluation date. The normal contributions foractive members’ COLA are being phased in.Chapter 78, P.L. 2011 suspended future COLAs forcurrent and future retirees and beneficiaries untilreactivated as permitted by law.

In accordance with the provisions of Chapter 79, P.L.1960, the monies appropriated for payment of thenon-contributory life insurance coverage shall beheld separate from the retirement System monies.

In accordance with the provisions of Chapter 133,P.L. 2001, the Benefit Enhancement Fund (BEF)was established to fund the additional annualemployer normal contribution due to the law’sincreased benefits. (Chapter 353, P.L. 2001extended this coverage to this law’s additional

annual employer normal contribution.) If theassets in the BEF are insufficient to cover thenormal contribution for the increased benefits fora valuation period, the State will pay suchamount for both the State and local employers.

In accordance with the provisions of Chapter 259,P.L. 2001, the additional normal contributions forincreased benefits to judges of compensation for avaluation period will be funded by transfers fromthe Second Injury Fund.

Chapter 19, P.L. 2009 provides that the StateTreasurer will reduce for Local employers the nor-mal contribution to 50% of the amount certifiedfor fiscal year 2009. This unfunded liability will bepaid by the Local employers in level annual pay-ments over a period of 15 years with the first pay-ment due in the fiscal year ending June 30, 2012.The unfunded liability will be adjusted by the rateof return on the actuarial value of assets. The leg-islation also provides that a Local employer maypay 100% of the recommended contribution forfiscal year 2009. Local employers who were eligi-ble but did not elect to take advantage of Chapter19, P.L. 2009 were permitted to elect to defer 50%of the 2010 fiscal year required contribution withthe first payment due in the fiscal year endingJune 30, 2012.

ACCRUED LIABILITY CONTRIBUTIONS

The State and Local employers pay contributionsto cover any unfunded accrued liability. Anunfunded accrued liability was established foractive life COLAs. The amortization periods forfunding these liabilities were set initially at 40years. Experience gains or losses for the 10 val-uation years following the March 31, 1992 valua-tion will increase or decrease the unfundedaccrued liability. Thereafter, actuarial gains orlosses will increase or decrease the amortizationperiod unless an increase will cause it to exceed30 years. Chapter 78, P.L. 2011 suspended futureCOLAs for current and future retirees and benefici-aries until reactivated as permitted by law andchanged the methodology used to amortize the








unfunded accrued liability. Beginning with theJuly 1, 2010 actuarial valuation, the accrued lia-bility contribution shall be computed so that if thecontribution is paid annually in level dollars, itwill amortize the unfunded accrued liability overan open 30 year period. Beginning with the July1, 2019 actuarial valuation, the accrued liabilitycontribution shall be computed so that if the con-tribution is paid annually in level dollars it willamortize the unfunded accrued liability over aclosed 30 year period (i.e., for each subsequentactuarial valuation, the amortization period shalldecrease by one year). Beginning with the July 1,2029 actuarial valuation when the remainingamortization period reaches 20 years, any increaseor decrease in the unfunded accrued liability as aresult of actuarial losses or gains for subsequentvaluation years shall serve to increase or decrease,respectively, the amortization period for theunfunded accrued liability, unless an increase inthe amortization period will cause it to exceed 20years. If an increase in the amortization period asa result of actuarial losses for a valuation yearwould exceed 20 years, the accrued liability con-tribution shall be computed for the valuation yearusing a 20 year amortization period.

Chapter 366, P.L. 2001 requires the State be liablefor any increase in pension costs to a county thatresults from the enrollment of prosecutors in the

Prosecutors Part. Any increase in the unfundedaccrued liability in the Retirement System arisingfrom the benefits established for the ProsecutorsPart are to be amortized over a period of 30 yearsin the manner provided for other such liability inthe Retirement System.

In accordance with the provisions of Chapter 259,P.L. 2001, the additional accrued liability contri-bution for increased benefits to judges of compen-sation for a valuation period will be funded bytransfers from the Second Injury Fund.

Chapter 19, P.L. 2009 provides that the StateTreasurer will reduce for Local employers theaccrued liability contribution to 50% of theamount certified for fiscal year 2009. This unfund-ed liability will be paid by the Local employers inlevel annual payments over a period of 15 yearswith the first payment due in the fiscal year end-ing June 30, 2012. The unfunded liability will beadjusted by the rate of return on the actuarialvalue of assets. The legislation also provides thata Local employer may pay 100% of the recommend-ed contribution for fiscal year 2009. Local employ-ers who were eligible but did not elect to defer50% of the 2009 fiscal year contribution were per-mitted to elect to defer 50% of the 2010 fiscal yearcontribution with the first payment due in the fis-cal year ending June 30, 2012.


1550 Liberty Ridge DriveSuite 200Wayne, PA 19087-5572Tel +1 610 687.5644Fax +1 610.687.4236www.milliman.com

August 21, 2012

Board of TrusteesTeachers' Pension and Annuity Fund

of New Jersey



This letter constitutes the actuary’s certification letter for the Comprehensive Annual FinancialReport (CAFR) of the Teachers’ Pension and Annuity Fund of New Jersey (TPAF). It reflects theresults of the revised June 30, 2011 Annual Actuarial Valuation (dated June 12, 2012) of TPAF.Please refer to the entire Actuarial Valuation report for more information.

This valuation reflects changes to two key actuarial assumptions: 1) a decrease in the investmentreturn assumption from 8.25% per year to 7.95% per year, and 2) a decrease to the salaryincrease assumption to average a 2.0% reduction for five years beginning July 1, 2011 and a0.75% reduction thereafter.

The funding requirements of the plan, as modified by Chapter 1, P.L. 2010, and Chapter 78, P.L.2011, is to have the State phase-in to paying 100% of the statutorily required contribution overa 7-year period beginning with fiscal year 2012. These contributions cover the normal cost of theplan plus a 30-year level dollar amortization of the unfunded pension accrued liability. The max-imum amortization period will be reduced by one each year beginning with the 2021 fiscal year,but not less than 20 years (the 2030 fiscal year).

Since the 2004 fiscal year, the State has not met the full statutory contribution requirement.Actual contributions by the State for fiscal year 2012 also did not meet the full statutory contri-bution requirements. In accordance with Chapter 1, P.L. 2010, 100% of the statutorily requiredcontribution is not expected to be contributed by the State until fiscal year 2018. The followingdescribes the allocation of the State contributions appropriated for fiscal years 2012 and 2013.

The State appropriated $318,320,443 for the 2012 fiscal year which represents 1/7th of the statu-tory pension and State ERI-3 contributions plus 100% of the actual non-contributory group lifeinsurance claims. For fiscal year 2013, it is our understanding that the State will appropriate2/7ths of the statutory pension and State ERI-3 contributions plus an amount to cover 100% ofthe actual non-contributory group life insurance claims, which is estimated to total$647,242,344. Please note that ERI contributions are not included in the CAFR in accordance withGASB accounting. Therefore, the resulting contributions are $317,927,358 (14.01% of the ARC)for fiscal year 2012 and $646,427,143 (27.72% of the ARC) for fiscal year 2013.


The valuation was based on a set of demographic actuarial assumptions (described in detail inthe section headed “Summary of Actuarial Assumptions and Methods”) which was adopted by theBoard of Trustees as a result of a study of actual experience under the Teachers’ Pension AnnuityFund during the 3-year period ending June 30, 2009. The valuation was also based on a set ofeconomic assumptions as prescribed by the State Treasurer, specifically an investment returnassumption of 7.95%, and a modification to the salary increase assumption. Based on our mostrecent analysis, this assumption is higher than our best estimate of future returns, but falls with-in the optimistic end of our reasonable range. The demographic actuarial assumptions and meth-ods used for funding purposes meet the parameters set forth in Governmental AccountingStandards Board (GASB) Statement No. 25 except with respect to the funding of the contributo-ry and non-contributory group life benefits. The Annual Required Contribution shown on theattached exhibit reflects an actuarial determination of the contributory and non-contributorygroup life benefits.

The following supporting schedules in the Actuarial Section were prepared by Milliman:


• Summary of Retired Member Valuation Data (including schedule of retirants and beneficiaries added to and removed from rolls)


• Solvency Test

• Analysis of Financial Experience

• Summary of Principal Plan Provisions

In addition, Milliman prepared the “Schedule of Funding Progress”, the “Schedule of EmployerContributions”, and the “Reconciliation of Net Pension Obligation” in the Financial Section.

Milliman’s work is prepared solely for the internal business use of the State of New Jersey Divisionof Pension and Benefits. To the extent that Milliman's work is not subject to disclosure underapplicable public records laws, Milliman’s work may not be provided to third parties withoutMilliman's prior written consent. Milliman does not intend to benefit or create a legal duty to anythird party recipient of its work product. Milliman’s consent to release its work product to anythird party may be conditioned on the third party signing a Release, subject to the followingexception:

• The System may provide a copy of Milliman’s work, in its entirety, to the System'sprofessional service advisors who are subject to a duty of confidentiality and whoagree to not use Milliman’s work for any purpose other than to benefit the System.

This report has been prepared exclusively for the State of New Jersey Division of Pensions andBenefits for a specific and limited purpose. Milliman does not intend to benefit and assumes noduty or liability to other parties who receive this work. It is a complex, technical analysis thatassumes a high level of knowledge concerning the State of New Jersey Division of Pensions andBenefits’ operations, and uses the State of New Jersey Division of Pensions and Benefits’ data,which Milliman has not audited. No third party recipient of Milliman's work product should relyupon Milliman's work product. Such recipients should engage qualified professionals for adviceappropriate to their own specific needs.

The consultants who worked on this assignment are pension actuaries. Milliman’s advice is notintended to be a substitute for qualified legal or accounting counsel.

In performing this analysis, we relied, without audit, on census data, plan provisions, asset state-ments and other information (both written and oral) provided by the State of New Jersey Division


of Pensions and Benefits. We have not audited or verified the census data, asset statements orother information. To the extent any of these are inaccurate or incomplete, the results of ouranalysis may likewise be inaccurate or incomplete.

We performed a limited review of the data used directly in our analysis for reasonableness andconsistency and have not found material defects in the data. If there are material defects in thedata, it is possible that they would be uncovered by a detailed, systematic review and compari-son of the data to search for data values that are questionable or for relationships that are mate-rially inconsistent. Such a review was beyond the scope of our assignment.

Future actuarial measurements may differ significantly from the current measurements presentedin this analysis due to actual plan experience deviating from the actuarial assumptions, andchanges in plan provisions, actuarial assumptions, and applicable law. An assessment of thepotential range and cost effect of such differences is beyond the scope of this analysis.

I am a member of the American Academy of Actuaries and meet its Qualification Standard to ren-der this actuarial opinion.


MILLIMAN, INC.

Scott F. Porter, FSA, MAAA





A. Actuarial Assumptions

Interest: 7.95% per annum, compounded annually (as prescribed by the State Treasurer).

Salary Scale: Salary increases vary by years of employment averaging 3.90% for a five year select period(June 30, 2011 — June 30, 2016) and averaging 5.12% thereafter. Schedule of rates are shown below:

Years ofEmployment

Annual Rate

Select Period Ultimate Period0-8 4.60% 6.25%9-12 5.35 6.6013 5.20 6.4514 4.85 6.1015 4.55 5.8016 3.90 5.1517 3.55 4.7018 3.35 4.50

19-20 3.00 4.1521 2.55 3.7022 2.50 3.65

23-25 2.50 3.5026-30 2.50 3.2531+ 2.50 2.90

Increases in Compensation Limits: The IRC Section 401(a)(17) limit is assumed to increase 3.0% per annum,compounded annually. The Social Security Taxable Wage Base is assumed to increase 4.0% per annum, com-pounded annually.





A. Actuarial Assumptions, Continued

Termination: Withdrawal rates vary by age, years of employment, and gender. Illustrative rates are shown below:

Years of Employment

Less Than 10 Years of Employment

MaleFemale

<40 40+0 8.19% 7.61% 7.61%1 6.72 7.00 7.002 5.90 6.09 6.093 4.17 5.89 3.804 3.39 5.65 2.595 2.68 5.54 2.196 2.36 5.54 1.807 2.12 5.36 1.688 1.59 5.32 1.439 1.52 4.07 1.28

* Members must have attained 10 years of service or 60 years of age (62 years of age for Class E and F members,65 years of age for Class G members) in order to receive an annuity benefit.

Age

Annual Rates for Those With Deferred Annuity Benefits*

10-14 Years of Employment 15-19 Years of Employment 20-24 Years of Employment

Male Female Male Female Male Female

30 0.81% 4.30% 0.59% 3.52% 0.39% 2.35%

35 0.85 3.21 0.61 2.63 0.41 1.75

40 0.71 1.50 0.51 1.22 0.34 0.82

45 0.59 0.69 0.42 0.57 0.28 0.38

50 0.71 0.70 0.51 0.58 0.34 0.38

55 1.36 1.34 0.98 1.10 0.65 0.73

Age

Annual Rates for Those Receiving Return of Contributions

10-14 Years of Employment 15-19 Years of Employment 20-24 Years of Employment

Male Female Male Female Male Female

30 0.55% 0.47% 0.40% 0.39% 0.26% 0.26%

35 0.51 0.34 0.37 0.28 0.25 0.19

40 0.34 0.18 0.24 0.14 0.16 0.10

45 0.21 0.07 0.15 0.05 0.10 0.04

50 0.15 0.07 0.11 0.05 0.07 0.04

55 0.10 0.09 0.07 0.07 0.05 0.05






Retirement: Rates of retirement vary by age, gender, and eligibility for an unreduced pension and post-retire-ment medical benefits.

The rates listed below are for members hired prior to July 1, 2007 (Class A and B employees). Illustrativerates are shown below:

Age

Less Than Age 55 or Less Than 25 Years

of Service

Attainment of Age 55 and 25 Years of Service

First Eligibility After First EligibilityMale Female Male Female Male Female

<47 1.2% 1.2% N/A N/A N/A N/A48 1.5 1.5 N/A N/A N/A N/A49 1.7 1.7 N/A N/A N/A N/A50 2.0 2.0 N/A N/A N/A N/A51 2.4 2.4 N/A N/A N/A N/A52 2.8 2.8 N/A N/A N/A N/A53 3.8 3.8 N/A N/A N/A N/A54 4.8 4.8 N/A N/A N/A N/A55 N/A N/A 15.0% 16.0% N/A N/A56 N/A N/A 22.0 19.0 12.0% 13.0%57 N/A N/A 22.0 19.0 13.0 14.058 N/A N/A 25.0 25.0 14.0 14.059 N/A N/A 25.0 25.0 15.0 15.060 10.0 7.0 27.0 30.0 21.0 20.061 10.0 7.0 30.0 32.0 23.0 22.062 11.0 10.0 40.0 46.0 36.0 32.063 11.0 10.0 40.0 44.0 30.0 26.564 11.0 10.0 40.0 44.0 30.0 26.565 17.0 15.0 50.0 50.0 38.0 35.0

66-70 17.0 15.0 50.0 50.0 30.0 30.071+ 20.0 20.0 50.0 50.0 30.0 30.0






The rates listed below are for members hired on or after July 1, 2007 and before November 2, 2008 (Class Demployees). Illustrative rates are shown below:

Age


of Service



<47 0.6% 0.6% N/A N/A N/A N/A48 0.8 0.8 N/A N/A N/A N/A49 0.9 0.9 N/A N/A N/A N/A50 1.0 1.0 N/A N/A N/A N/A51 1.2 1.2 N/A N/A N/A N/A52 1.4 1.4 N/A N/A N/A N/A53 1.9 1.9 N/A N/A N/A N/A54 2.4 2.4 N/A N/A N/A N/A55 11.5 11.5 N/A N/A N/A N/A56 12.0 12.0 N/A N/A N/A N/A57 12.5 12.5 N/A N/A N/A N/A58 13.5 13.5 N/A N/A N/A N/A59 14.0 14.0 N/A N/A N/A N/A60 10.0 7.0 29.0% 30.0% N/A N/A61 10.0 7.0 30.0 32.0 23.0% 22.0%62 11.0 10.0 40.0 46.0 36.0 32.063 11.0 10.0 40.0 44.0 30.0 26.564 11.0 10.0 40.0 44.0 30.0 26.565 17.0 15.0 50.0 50.0 38.0 35.0

66-70 17.0 15.0 50.0 50.0 30.0 30.071+ 20.0 20.0 50.0 50.0 30.0 30.0






The rates listed below are for members hired after November 1, 2008 and before June 28, 2011 (Class E andF employees). Illustrative rates are shown below:

Age


of Service



<47 0.6% 0.6% N/A N/A N/A N/A48 0.7 0.7 N/A N/A N/A N/A49 0.8 0.8 N/A N/A N/A N/A50 0.9 0.9 N/A N/A N/A N/A51 1.1 1.1 N/A N/A N/A N/A52 1.3 1.3 N/A N/A N/A N/A53 1.7 1.7 N/A N/A N/A N/A54 2.2 2.2 N/A N/A N/A N/A55 10.5 10.5 N/A N/A N/A N/A56 10.8 10.8 N/A N/A N/A N/A57 11.0 11.0 N/A N/A N/A N/A58 12.0 12.0 N/A N/A N/A N/A59 12.5 12.5 N/A N/A N/A N/A60 17.0 19.0 N/A N/A N/A N/A61 18.5 20.5 N/A N/A N/A N/A62 29.5 24.0 50.0% 46.0% N/A N/A63 11.0 10.0 40.0 44.0 30.0% 26.5%64 11.0 10.0 40.0 44.0 30.0 26.565 17.0 15.0 50.0 50.0 38.0 35.0

66-70 17.0 15.0 50.0 50.0 30.0 30.071+ 20.0 20.0 50.0 50.0 30.0 30.0






The rates listed below are for members hired on or after June 28, 2011 (Class G employees). Illustrative ratesare shown below:

Age


of Service



<47 0.3% 0.3% N/A N/A N/A N/A48 0.4 0.4 N/A N/A N/A N/A49 0.4 0.4 N/A N/A N/A N/A50 0.5 0.5 N/A N/A N/A N/A51 0.6 0.6 N/A N/A N/A N/A52 0.7 0.7 N/A N/A N/A N/A53 0.9 0.9 N/A N/A N/A N/A54 1.1 1.1 N/A N/A N/A N/A55 5.0 5.0 N/A N/A N/A N/A56 6.0 6.0 N/A N/A N/A N/A57 7.0 7.0 N/A N/A N/A N/A58 8.0 8.0 N/A N/A N/A N/A59 9.0 9.0 N/A N/A N/A N/A60 13.0 14.0 N/A N/A N/A N/A61 14.0 15.0 N/A N/A N/A N/A62 35.0 32.0 N/A N/A N/A N/A63 25.0 25.0 N/A N/A N/A N/A64 25.0 25.0 N/A N/A N/A N/A65 40.0 40.0 50.0% 50.0% N/A N/A

66-70 17.0 15.0 50.0 50.0 30.0% 30.0%71+ 20.0 20.0 50.0 50.0 30.0 30.0






Disability: Incidence of ordinary disabilities among active members apply upon the attainment of 10 yearsof service until the attainment of first eligibility for retirement. For members eligible for early retirement, thegreater of the early retirement and disability benefit is valued. The rates vary by age, gender, and type of dis-ability. Illustrative rates are shown below:

AgeOrdinary Accidental

Male Female Male Female25 0.0301% 0.0379% 0.0060% 0.0060%30 0.0473 0.0550 0.0060 0.006035 0.0609 0.0674 0.0060 0.006040 0.0701 0.0893 0.0060 0.006045 0.1023 0.1317 0.0060 0.006050 0.1421 0.1759 0.0060 0.006055 0.3732 0.3506 0.0060 0.0060

For Class F and G members assumed to receive a disability benefit under Chapter 3, P.L. 2010, it is assumedthat Class F members will begin receiving their retirement benefit at the earlier of age 70 or 36 years of serv-ice and Class G members will begin receiving their retirement benefit at age 70. The valuation excludes ben-efits paid from any disability income policy prior to retirement since these benefits are not paid from TPAF.

Pre-retirement Mortality: Illustrative rates of mortality of active members which vary by age and gender areshown below. A generational approach is applied using Scale AA to account for future mortality improvement.The base year is 2000. Illustrative rates for the base year are shown below. No accidental deaths are assumed.

AgeOrdinary

Male Female25 0.0345% 0.0170%30 0.0376 0.019135 0.0353 0.020740 0.0591 0.028445 0.0890 0.046650 0.1342 0.064555 0.1978 0.101660 0.2747 0.158965 0.4263 0.237470 0.6725 0.3754






Post-retirement Mortality: Rates of mortality vary by age, gender, and type of retirement. A generationalapproach is applied using Scale AA to account for future mortality improvement for non-disabled annuitants.The base year is 2000 for males and 2003 for females. Illustrative rates for the base year and Scale AA areshown below:

Age

Service Retirements and Beneficiaries Scale AA Disability Retirements

Male Female Male Female Male Female45 0.3573% 0.1375% 1.3% 1.6% 1.8057% 0.7078%50 0.5265 0.2151 1.8 1.7 2.3180 1.095855 0.4781 0.3066 1.9 0.8 2.8354 1.571760 0.5813 0.4937 1.6 0.6 3.3634 2.074765 1.0238 0.6602 1.4 0.5 4.0139 2.662570 1.6962 1.0497 1.5 0.6 5.0066 3.575375 2.9598 1.7342 1.4 0.8 6.5654 4.961980 5.2282 3.0118 1.0 0.7 8.7498 6.869685 9.2106 6.4019 0.7 0.6 11.3282 9.5193






Non-contributory Members: 30% are assumed to return to contributory status.

Beneficiaries: 100% of active members are assumed to have a beneficiary for receipt of the lump sum deathbenefit or employee contribution refund upon death.

Form of Payment: Modified Cash Refund Annuity.

Special Data Adjustments: Determination of employee type is based on Class Code and was used as provid-ed by the Division. Active members where no salary was provided, no date of birth was provided, or ASF wasnegative were excluded from the valuation. A liability equal to the ASF was held. For beneficiaries where nogender code or date of birth was provided, reasonable assumptions were made based on records provided inprior years or the deceased retiree’s records. For retirees with a joint annuitant option code that was miss-ing a spouse’s date of birth, husbands are assumed to be 3 years older than wives. All such records wereincluded in the valuation. Retiree members where no benefit and monthly allowance was provided, or nocause, class, or option was provided were excluded from the valuation.

B. Actuarial Valuation Method: The projected Unit Credit Method was used as required by Chapter 62, P.L. 1994as modified by Chapters 115, P.L. 1997 and 133, P.L. 2001. Non-contributory life insurance benefits are fund-ed on a term cost basis.

C. Asset Valuation Method: A five year average of market value with write-up was used. This method takes intoaccount appreciation (depreciation) in investments in order to smooth asset values by averaging the excessof the actual over the expected income, on a market value basis, over a five year period. Cash flows are basedon an accrual accounting approach. This method is prescribed by statute. The market value of assets is usedfor the Contributory Group Insurance Premium Fund for GASB purposes.

Due to the addition of a new tier (Class G), separate retirement rate assumptions from employment and upontermination of disability were included in the valuation.

The interest rate has been decreased from 8.25% to 7.95% per the State Treasurer and the salary increaseassumption has been decreased 2% for a 5-year period (2011-2016) and 0.75% thereafter.





ValuationDate

Added to Rolls Removed From Rolls Rolls at End of Year % Increasein Average

AnnualAllowance

AverageAnnual




Allowance

6/30/06 5,034 N/A 1,865 N/A 68,614 2,210,848,938 4.57 32,222

6/30/07 5.136 N/A 1,753 N/A 71,997 2,427,632,794 4.65 33,719

6/30/08 5,188 N/A 1,772 N/A 75,413 2,627,478,324 3.33 34,841

6/30/09 4,684 N/A 1,883 N/A 78,214 2,842,667,672 4.32 36,345

6/30/10 4,147 N/A 2,124 N/A 80,237 2,957,518,144 1.42 36,860

6/30/11 7,744 N/A 2,069 N/A 85,912 3,285,419,699 3.75 38,242


Valuation Date

Number of Active Members (a)

Annual Compensation (b)

Average Compensation (b/a)

% Increase in Average Compensation

6/30/06 153,888 9,326,749,799 60,607 2.386/30/07 155,096 9,676,260,309 62,389 2.946/30/08 156,087 10,040,685,465 64,327 3.116/30/09 157,109 10,353,262,361 65,899 2.446/30/10 157,023 10,659,241,596 67,883 3.016/30/11 151,115 10,416,454,800 68,931 1.54

SOLVENCY TEST

ValuationDate


Net AssetsAvailable

for Benefits*

Percentage of Accrued Liabilities

Covered by Net Assets

(1) Active

Member contributions

(2) Retirees

& Deferred Vested

(3)Active Members

(EmployerFinanced) (1) (2) (3)

6/30/06 7,115,821,852 23,429,112,098 14,894,344,216 35,422,799,539 100.00 100.00 33.006/30/07 7,489,958,068 25,983,694,501 14,653,800,841 36,594,817,062 100.00 100.00 21.006/30/08 7,914,403,491 28,072,978,525 14,670,896,258 36,541,083,946 100.00 100.00 4.006/30/09 8,450,026,966 30,276,614,675 14,691,686,935 34,708,001,341 100.00 87.00 0.006/30/10 9,077,370,573 27,435,656,099 11,904,905,673 33,136,475,630 100.00 88.00 0.00

6/30/11 8,987,300,905 30,765,265,431 10,470,122,414 32,156,229,300 100.00 75.00 0.00

*The above table is based on Valuation Assets. As of June 30, 2011, the solvency precentages would be 1)100%, 2) 61% and 3) 0%, respectively, if based on the market value of assets of $27,654.0 million.




ANALYSIS OF FINANCIAL EXPERIENCEGAINS AND LOSSES IN UNFUNDED ACCRUED LIABILITIES

RESULTING FROM DIFFERENCES BETWEENASSUMED EXPERIENCE AND ACTUAL EXPERIENCE

Actual Valuation as of

Type of ActivityJune 30, 2011($ Millions)

June 30, 2010($ Millions)

June 30, 2009($ Millions)

Economic Factors:Investment Return $(1,125.6) $(1,843.2) $(2,433.5)Salary Increases 330.0 188.3 230.0COLA Adjustments 251.3 587.5 (286.0)Expenses (12.7) (12.2) (13.2)

Demographic Factors:Active Members (272.3) (78.9) (34.5)New Entrants (26.5) (47.7) (61.7)Non-Contributing Members (17.1) (28.0) (29.4)Retirees and Beneficiaries (52.9) (10.0) (75.0)

Net Actuarial Gains or (Losses) $(925.8) $(1,244.2) $(2,703.3)


This summary of plan provisions is intended only todescribe the essential features of the plan. All eligibil-ity requirements and benefit amounts shall be deter-mined in strict accordance with the plan documentitself.

1. TYPE OF PLAN

The Plan is a contributory, defined benefit plan.Effective October 1, 2011, contributions byMembers are 6.5% and increase by 1/7 of 1% eachJuly thereafter until an ultimate rate of 7.5% isattained on July 1, 2018. For members hired on orafter July 1, 2007, compensation for contributionsis capped at the Social Security Taxable Wage Base($106,800 for 2011). For compensation in excessof the Social Security Wage Base, contributions onthe excess compensation are made to the DefinedContribution Retirement Program.

2. EFFECTIVE DATE

The Plan was established in 1919. It was reorgan-ized and integrated with Social Security in 1955.Social Security integration was eliminated in1966, i.e., reductions in retirement benefits basedon Social Security benefits were eliminated.

3. ELIGIBILITY FOR MEMBERSHIP

Employees appointed to positions requiring certifi-cation as members of a regular teaching or profes-sional staff of a public school system in New Jerseyare required to enroll as a condition of employment.Employees of the Department of Education holdingunclassified, professional and certificated titles areeligible for membership. Temporary or substituteemployees are not eligible. The eligible employeemust be scheduled to work at least 32 hours perweek effective May 22, 2010, per Chapter 1, P.L.2010.

4. DEFINITIONS

Fiscal Year: A Fiscal Year is a 12-month periodbeginning on July 1 and ending on June 30.

Credited Service: A year of Credited Service foreach year an employee is a Member of the

Retirement System plus service, if any, covered bya prior service liability. Class F members must bescheduled to work at least 32 hours per week,Class E members also must have an annual salaryof $7,500 (indexed for inflation) and other mem-bers must have an annual salary of $500.

Final Compensation: This is the average annualcompensation upon which contributions by amember are based on the period consecutive yearsof Creditable Service immediately preceding retire-ment or the period of highest fiscal years ofMembership Service. The period equals three formembers hired prior to May 22, 2010 and five forClass F and later members.

Final Year Compensation: This is the compensa-tion upon which contributions by a Member to theAnnuity Savings Fund are based in the last year ofMembership Service.

Aggregate Member Contributions: This is the sumof all amounts deducted from the compensation ofa Member or contributed by him or on his behalfwithout interest.

Class A Member: Any member who contributestowards retirement allowance based on 1/64thbenefit rate per year of creditable service.

Class B Member: Any member hired prior to July 1, 2007 who contributes towards a retirementallowance based on 1/55th benefit rate per year ofcreditable service.

Class D Member: Any member hired on or afterJuly 1, 2007 and before November 2, 2008 whocontributes up to the Social Security TaxableWage Base towards a retirement allowance basedon 1/55th benefit rate per year of creditableservice payable at age 60.

Class E Member: Any member hired afterNovember 1, 2008 who contributes up to theSocial Security Taxable Wage Base towards aretirement allowance based on 1/55th benefitrate per year of creditable service payable at age62.



SUMMARY OF PRINCIPAL PLAN PROVISIONS


Class F Member: Any member hired after May 21,2010 and before June 28, 2011 who contributes upto the Social Security Taxable Wage Base towards aretirement allowance based on 1/60th benefit rateper year of creditable service payable at age 62.

Class G Member: Any member hired on or afterJune 28, 2011 who contributes up to the SocialSecurity Taxable Wage Base towards a retirementallowance based on 1/60th benefit rate per yearof creditable service payable at age 65.

5. COST-OF-LIVING ADJUSTMENT

The Pension Adjustment Program provides a cost-of-living adjustment (COLA) to retirees and theirsurvivors who receive a monthly retirementallowance from the TPAF. The first adjustment isreceived in the 25th month after the member’sretirement. Subsequent cost-of-living adjustmentsare computed annually and are first reflected inFebruary. The rate of increase is equal to 60 per-cent of the percentage change between the aver-age CPI for the 12 month period ending December31 in the year of retirement and the August 31 pre-ceding the February adjustment. Any pensionadjustments to be paid on or after July 1, 2011have been eliminated for all members.

6. RETIREMENT BENEFITS

Service Retirement:

SERVICE RETIREMENT ELIGIBILITY: Eligibilitymeans age 60 (Class A, B, and D), age 62 (Class Eand F) or age 65 (Class G) with no minimum serv-ice requirement.

SERVICE RETIREMENT BENEFIT: An employee'sannual service retirement allowance is equal to amember annuity plus an employer pension whichtogether equals 1/64th of Final Compensation foreach year of service for Class A members and1/55th of Final Compensation for each year ofservice for Class B, D and E members and 1/60thof Final Compensation for each year of service forClass F and G members. The Member annuity isbased on the member contributions credited at the

valuation interest rate.

Note: See Section 12 for special benefits for vet-eran members.

Early Retirement:

EARLY RETIREMENT ELIGIBILITY: Class A, B, D, Eand F members may retire after completion of 25years of Creditable Service, and Class G membersmay retire after completion of 30 years ofCreditable Service.

EARLY RETIREMENT BENEFIT: The benefit may beeither:

(i) the lump sum withdrawal benefit described in7.a. below; or

(ii) the Service Retirement Benefit reduced by 1/4of one percent for each month the retirementdate precedes age 55 for Class B members; or

(iii) the Service Retirement Benefit reduced by1/12 of one percent for each month the retire-ment date precedes age 60 but over age 55and by ¼ of one percent for each month theretirement date precedes age 55, for Class Dmembers.

(iv) the Service Retirement Benefit reduced by1/12 of one percent for each month the retire-ment date precedes age 62 but over age 55and by ¼ of one percent for each month theretirement date precedes age 55, for Class Eand F members.

(v) the Service Retirement Benefit reduced by ¼ ofone percent for each month the retirementdate precedes age 65, for Class G members.

Deferred Retirement:

Eligibility: A Member is eligible upon terminationof service prior to age 60 (Class A, B, and D), age62 (Class E and F) or age 65 (Class G) and after 10years of Creditable Service.

Deferred Retirement Benefit: The benefit may beeither:



SUMMARY OF PRINCIPAL PLAN PROVISIONS, Continued


(i) the lump sum withdrawal benefit described in7.a. above; or

(ii) a deferred retirement benefit, commencing atage 60 (Class A, B, and D), age 62 (Class E andF) or age 65 (Class G), equal to a memberannuity plus an employer pension whichtogether provide a retirement allowance equalto the service retirement benefit based onFinal Compensation and Creditable Service atdate of termination. Member annuity based onmember contributions credited at the valua-tion interest rate.

7. TERMINATION BENEFITS

Lump Sum Withdrawal:

ELIGIBILITY: A Member is eligible upon termina-tion of service.

LUMP SUM WITHDRAWAL BENEFIT: The benefitequals a refund of Aggregate Member Contributionsplus, if the member has completed three years ofservice, interest accumulated at 2.0% per annumallowed thereon.

8. DEATH BENEFITS

Ordinary Death (Insured) Benefit - Lump Sum(Non-Contributory):

PRE-RETIREMENT DEATH BENEFIT ELIGIBILITY: Anycurrent active member is eligible.

PRE-RETIREMENT DEATH BENEFIT: The benefit is alump sum benefit equal to the AggregateContributions with interest allowed thereon plusan amount equal to 1-1/2 times Compensation atdate of death.

POST-RETIREMENT DEATH BENEFIT PRIOR TO AGE60 (CLASS A,B, AND D), AGE 62 (CLASS E AND F)OR AGE 65 (CLASS G) ELIGIBILITY: Eligible if dis-abled or retired early.

POST-RETIREMENT DEATH BENEFIT PRIOR TO AGE 60(CLASS A, B, AND D), AGE 62 (CLASS E AND F) ORAGE 65 (CLASS G) BENEFIT: The benefit is as fol-lows:

(1) For death while a Disabled Retiree the benefitis equal to 1-1/2 times Compensation.

(2) For death while an Early Retiree, the benefit isequal to 3/16 times Compensation.

(3) For death while vested terminated, the benefitis equal to his Aggregate Contributions withinterest allowed thereon.

POST-RETIREMENT DEATH BENEFIT AFTER AGE 60(CLASS A, B, AND D), AGE 62 (CLASS E AND F) ORAGE 65 (CLASS G) ELIGIBILITY: Eligible afterattainment of age 60 for service, deferred and dis-abled retirements (if not disabled, 10 years ofCreditable Service required for members enrollingon or after July 1, 1971).

POST-RETIREMENT DEATH BENEFIT AFTER AGE 60(CLASS A, B, AND D), AGE 62 (CLASS E AND F) ORAGE 65 (CLASS G) BENEFIT: The benefit payable isequal to 3/16 times Compensation.

Contributory Death Benefit: An additional,employee-paid, death benefit is also availablethrough group insurance purchased by the Boardof Trustees. Contributions for this benefit arerequired by Members during the first year of enroll-ment. Participation may be terminated after thefirst year. The benefit prior to retirement is 2 timescompensation. The benefit after retirement is 1/4times final year compensation (coverage at retire-ment, and 10 years of participation for Membersenrolling on or after July 1, 1970, is required).

Pre-retirement Accidental Death Benefit:

ELIGIBILITY: A death resulting from injuries receivedfrom an accident during performance of duty and nota result of willful negligence is eligible.

PRE-RETIREMENT LUMP SUM BENEFIT: The benefitis a lump sum equal to 1-1/2 times Compensation.

PRE-RETIREMENT ACCIDENTAL DEATH BENEFIT: Thebenefit payable is as follows:

(1) The annuity benefit to a widow or widower isequal to 50% of Compensation, payable for lifeor until remarriage.





(2) The annuity benefit, when there is no spouse,or the spouse is remarried, is equal to 20% ofCompensation for one child, 35% for twochildren, 50% for three or more children. Thebenefit is payable while the children areunder age 18 and it is payable for life if theyare disabled.

(3) The annuity benefit, when there is no spouseor children, is equal to 25% of Compensationfor one dependent parent and 40% for twodependent parents.

(4) The benefit, when there is no relation as stat-ed above, is equal to the AggregateContributions with interest allowed thereonand is payable to a beneficiary or to theMember's estate. This is also the minimumbenefit payable under 1, 2, or 3 above.

9. DISABILITY BENEFITS

Ordinary Disability Retirement:

ELIGIBILITY: A Member is eligible for OrdinaryDisability Retirement if he (she) has 10 years ofCreditable Service and is totally and permanentlyincapacitated from the performance of usual oravailable duties.

ORDINARY DISABILITY RETIREMENT BENEFIT FORCLASS A, B, D, AND E MEMBERS: The total retirementallowance is equal to the greater of:

(1) 1.64% of Final Compensation times the num-ber of years of Creditable Service; or

(2) 43.6% of Final Compensation

Note: See Section 12 for special benefits for vet-eran members.

ORDINARY AND ACCIDENTAL DISABILITYRETIREMENT BENEFIT FOR CLASS F AND G MEMBERS:A disability benefit equal to 60% of salary reducedby the initial Social Security benefit is paid until theearlier of age 70 or commencement of a retirementbenefit from a disability income policy outside ofTPAF. The policy also makes employee contributionsduring the period of disability.

Accidental Disability Retirement for Class A, B,D, and E members:

ELIGIBILITY: A Member is eligible upon total andpermanent incapacitation as a direct result of atraumatic event occurring during and as a result ofthe performance of regular or assigned duties.

ACCIDENTAL DISABILITY RETIREMENT BENEFIT: Thebenefit payable is equal to a Member annuity plus anemployer pension which together equals 72.7% ofthe Compensation at date of injury.

10. ADDITIONAL OLD-PLAN BENEFIT

An additional pension is payable to any retireewho was a member of the old Teachers' RetirementFund. This pension is the actuarial equivalent ofhis contributions to the old Teachers' RetirementFund without interest.

11. SPECIAL MINIMUM BENEFIT

A member who retired prior to 1955 with 20 ormore years of service may receive a minimum pen-sion of $500 a month inclusive of any amountspayable under any pension adjustments.

12. SPECIAL BENEFITS FOR VETERANS

Service Retirement: Eligible if member attains age60 and completes 20 years of service or attains age55 and completes 25 years of service. Benefitequals 54.5% of highest 12-month contributorycompensation.

Chapter 97 Benefit: Eligible if age 55 and com-pletes 35 years of service. Benefit equals 1/55thof final year compensation for each year of serv-ice.

13. BENEFIT AND COMPENSATION LIMITS

The provisions of IRC Section 415 and IRC Section401(a)(17), which limit benefits paid and limitcompensation used in determining benefits, hasbeen reflected in this report. The IRC Section 415limit is $195,000 and the 401(a)(17) compensa-tion cap is $245,000 for 2011 and is applied on acalendar year basis.





14. FORMS OF PAYMENT

Maximum Option — Single life annuity.Option 1 — Single life annuity with return ofreserve option.Option 2 — 100% joint and survivor annuity.Option 3 — 50% joint and survivor annuity.Option 4 — Other percentage joint and survivorannuity.Option A — 100% pop-up joint and survivor annuity.Option B — 75% pop-up joint and survivor annuity.Option C — 50% pop-up joint survivor annuity.Option D — 25% pop-up joint survivor annuity.

15. CONTRIBUTIONS

Member Contributions: Each member becoming amember on or after January 1, 1956 and prior to July 1, 2007 contributes at the rate of contributionapplicable to Class B members. Any member hiredafter June 30, 2007 and prior to November 2, 2008are Class D members. Members hired after November1, 2008 and prior to May 22, 2010 are Class E mem-bers. Members hired after May 21, 2010 are Class Fmembers, and members hired after June 28, 2011are Class G members.

(1) CLASS D, E, F, OR G MEMBERSHIP: Class D, E, F,or G members contribute at their applicablecontribution rate up to the Social SecurityTaxable Wage Base.

(2) CLASS B MEMBERSHIP: Any member onDecember 31, 1955 may elect to be classifiedas a Class B member and contribute at the rateof contribution applicable to Class B membersat his age at membership. Any such membermay elect to increase his accumulated deduc-tions by the amount required by the Board toreceive credit as a Class B member for all orpart of his service prior to such election.

(3) CLASS A MEMBERSHIP: Any member who is not aveteran and does not elect to be classified as aClass B member continues to contribute at therate of contribution applicable to his age atmembership which was payable prior to the

establishment of the integrated system, exceptthat if he became a member subsequent to June30, 1946 he will pay after January 1, 1955 at therate of contribution in effect on June 30, 1946applicable to his age at membership.

Prior to July 1, 1979 different contribution rateswere established for men and women. Effective onthat date members contribute at rates intermedi-ate between the rates previously applicable tomale and female members, computed to providethe same present value of future employee contri-butions at each entry age on the basis of the mem-bership as constituted on the effective date.

Local Employer Contributions:

(1) EARLY RETIREMENT INCENTIVE CONTRIBUTIONS:The State and Local employers which elected toparticipate in the early retirement incentive pro-grams authorized by Chapters 137, 229 and 231,P.L. 1991 and Chapters 48, 138 and 163, P.L.1993 and Chapter 23, P.L. 2002 and Chapters 128and 129, P.L. 2003 pay contributions to cover theadditional liability for these programs over amor-tization periods chosen by the employer (15 yearsfor Chapters 128 and 129) or the amortizationperiod for the Unfunded Accrued Liability of thesystem (Chapter 23, P.L. 2002 and Chapter 21,P.L. 2008). The remaining present values are re-amortized upon changes to the interest rateassumption. Effective with the revised June 30,2011 actuarial valuation, for any local employerwith an increasing payment amortization sched-ule, the increase factor is 3.25%.

(2) CHAPTER 113 CONTRIBUTIONS: Certain SchoolDistricts have elected to exempt a select groupof employees from the compensation limitunder IRC Section 401(a)(17) incorporatedunder Chapter 113. These school districts willpay the full cost of this exemption at a mem-ber's date of retirement.

16. CHANGES IN PLAN PROVISIONSSINCE PRIOR VALUATION

None.





September 14, 2012

Board of TrusteesPolice and Firemen’s Retirement System

of New Jersey



An actuarial valuation of the Police and Firemen’s Retirement System is performed annually tomeasure the ongoing costs of the System (with required contributions determined separately forthe State and Local employers) and the progress towards the funding goals of the System overtime. In general, the financial goal of the Police and Firemen’s Retirement System is a patternof contributions, which is sufficient to cover the normal cost of the System plus the contributiontowards the unfunded accrued liability.

In accordance with the New Jersey statutes, employers are required to make two contributions tothe System, a normal contribution and an accrued liability contribution. The normal contribu-tion for basic allowances and cost of living adjustments (COLA’s) is defined under the ProjectedUnit Credit funding method as the present value of the benefits accruing during the current year.Prior to the July 1, 2010 valuation, the unfunded accrued liability contribution for basicallowances and COLA’s was determined as a level percentage of pay required to amortize theunfunded accrued liability over 30 years in annual payments increasing by 4% per year. The fund-ing reform provisions of Chapter 78, P.L. 2011 changed the methodology used to amortize theunfunded accrued liability. Beginning with the July 1, 2010 actuarial valuation, the accrued lia-bility contribution shall be computed so that if the contribution is paid annually in level dollars,it will amortize the unfunded accrued liability over an open 30 year period. Beginning with theJuly 1, 2018 actuarial valuation, the accrued liability contribution shall be computed so that ifthe contribution is paid annually in level dollars it will amortize the unfunded accrued liabilityover a closed 30 year period (i.e., for each subsequent actuarial valuation, the amortization peri-od will decrease by one year.) Beginning with the July 1, 2028 actuarial valuation when theremaining amortization period reaches 20 years, any increase or decrease in the unfunded accruedliability as a result of actuarial losses or gains for subsequent valuation years shall serve toincrease or decrease, respectively, the amortization period for the unfunded accrued liability,unless an increase in the amortization period will cause it to exceed 20 years. If an increase inthe amortization period as a result of actuarial losses for a valuation year would exceed 20 years,the accrued liability contribution shall be computed for that valuation year using a 20 year amor-tization period.

Beginning with the July 1, 2010 valuation, the State decided to reduce the lag period betweenthe valuation year and the contribution from three years to two years which brought the Systemin line with the other New Jersey Systems which also have a two year lag period. Therefore, theJuly 1, 2011 valuation shows the financial condition of the System as of July 1, 2011 and givesthe basis for determining the recommended annual contributions to be made for the fiscal yearending June 30, 2013.

The valuation reflects the final provisions of the Appropriation Act for fiscal year 2011 (for theJuly 1, 2008 valuation, the State recommended pension contribution amount of $339,480,900was reduced to $0).


The valuation reflects the funding reform provisions of Chapter 1, P.L. 2010. Chapter 1, P.L. 2010allows the State Treasurer to phase in to the full recommended pension contribution. The Statewould be in compliance with its funding requirement provided the State makes a payment of atleast 1/7th of the full contribution, as computed by the actuaries, in the State fiscal year com-mencing July 1, 2011 and makes a payment in each subsequent fiscal year that increases by atleast an additional 1/7th until payment of the full contribution is made in the seventh fiscal yearand thereafter. Therefore, the fiscal year 2012 recommended State pension contribution of$375,234,766 has been reduced to $53,604,967 and has been recognized as a receivable contri-bution for purposes of this valuation. This amount may be subject to change per the requirementsof the State’s fiscal year 2012 spending plan.

The valuation reflects Chapter 19, P.L. 2009, which allowed the State Treasurer to reduce Localemployers’ normal and accrued liability contributions to 50% of the amount certified for the Statefiscal year 2009. In addition, certain Local employers who were eligible under Chapter 19, P.L.2009 to defer 50% of their State fiscal year 2009 pension contribution but did not were permit-ted to defer 50% of their State fiscal year 2010 recommended pension contribution. This unfund-ed liability will be paid by the Local employers in level annual payments over a period of 15 yearswith the first payment due in the fiscal year ending June 30, 2012. The unfunded liability willbe adjusted by the rate of return on the actuarial value of assets. The legislation also providesthat a Local employer may pay 100% of the recommended contributions for State fiscal years2009 and 2010. Such an employer will be credited with the full payments and any such amountswill not be included in their unfunded liability.

The valuation reflects the unauthorized early retirement incentive programs offered by certainLocal employers. The additional liability incurred by the System due to these programs is includ-ed as a receivable contribution.

The underlying demographic data is maintained and provided by the New Jersey Division ofPensions and Benefits. The data is analyzed by Buck Consultants for internal completeness andconsistency and compared with the prior valuation data to again ensure consistency.

As stipulated in the statutes, an actuarial investigation of the demographic experience of themembers and beneficiaries of the Police and Firemen’s Retirement System is made once in everythree-year period. The July 1, 2011 valuation was based on the actuarial assumptions that weredetermined from the July 1, 2007 – June 30, 2010 Experience Study (which was approved by theBoard of Trustees at the November 14, 2011 Board meeting). As mandated by the Statutes, theseassumptions will remain in effect for valuation purposes until such time the Board adopts reviseddemographic assumptions.

The Treasurer, upon recommendation from the Directors of the Division of Pensions and Benefitsand the Division of Investments, has recommended a change in the economic assumptions usedfor the valuation. The rate of investment return has been revised from 8.25% per annum to 7.95%per annum, and the assumed salary increases have been reduced by 2.00% per annum for fiscalyear ending 2012 through fiscal year ending 2016 and reduced by 0.75% per annum for fiscalyears ending 2017 and thereafter. These economic assumptions will remain in effect for valuationpurposes until such time as the Treasurer recommends revised economic assumptions

The valuation cost method used is the projected unit credit method. This method essentiallyfunds the System’s benefits accrued to the valuation date. Experience gains and losses are rec-ognized in future accrued liability contributions. The asset valuation method used was a five-yearaverage of market values with write-up. This method takes into account appreciation (deprecia-tion) in investments in order to smooth asset values by averaging the excess of the actual overthe expected income, on a market value basis, over a five-year period.

The valuation does not take into account any changes in U.S. equity prices and bond yields thathave occurred after the valuation date. Taking these into account may significantly change the


market and actuarial value of assets shown. The effect of these events on any funded ratiosshown, and on Retirement System calculations, is not known. Retirement System funding andfinancial accounting rules generally prohibit reflection of changes in assets and underlying eco-nomic conditions that occur after the valuation date.

The assumptions used to prepare the information required by Statements No. 25, No. 27 and No.50 of the Governmental Accounting Standards Board (GASB) were the same as those used for fund-ing purposes.

In our opinion, the attached schedules of valuation results fairly represent the status of the Policeand Firemen’s Retirement System and present an accurate view of historical data. The underlyingassumptions and methods used for both funding and GASB disclosure purposes are consistent withthe statutory specifications and represent a best estimate of the aggregate future experience ofthe System.





• Solvency Test

• Analysis of Past Financial Experience

Reconciliation of Employer Contribution Rates

• Brief Summary of the Benefit and Contribution Provisions as Interpreted for Valuation Purposes

In addition, Buck Consultants prepared the “Schedule of Funding Progress” and the “Schedule ofEmployer Contributions” in the Financial Section.

To the best of our knowledge, this information is complete and accurate. The valuation was per-formed by, and under the supervision of, independent qualified actuaries who are members of theAmerican Academy of Actuaries with experience in performing valuations for public retirement sys-tems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The calcu-lations are based on the current provisions of the Retirement System, and on actuarial assump-tions that are individually and in the aggregate internally consistent and reasonable based on theactual experience of the Retirement System.

Respectfully submitted,Buck Consultants

Janet H. Cranna, M.A.A.A., F.S.A., E.A., F.C.A., M.S.P.P.A.Principal, Consulting Actuary





Section 13, Subsection (13) of Chapter 255, P.L. 1944 as amended by Chapter 157, P.L. 1972 of the New JerseyStatutes provides that once in every three-year period the actuary shall examine in detail the demographic expe-rience of the members and beneficiaries of the Police and Firemen’s Retirement System to assure that the tablesused for determining expected liabilities are consistent with recent experience.

The July 1, 2011 actuarial valuation of the Police and Firemen’s Retirement System reflects the recognition of theactuarial assumptions determined from the July 1, 2007 – June 30, 2010 Experience Study which was approvedby the Board of Trustees at the November 14, 2011 Board meeting and the revised economic assumptions, whichwere recommended by the Treasurer.




Separations from Service and Salary Increases: Representative values of the assumed annual rates of separationand annual rates of salary increases are as follows:

Age

Annual Rates of

Select WithdrawalUltimate

Withdrawal

Up to the 1st Year 2nd Year 3rd Year 4th Year 5 to 9 Years

After 9 Years

25 5.00% 1.62% 1.40% 0.90% 0.35% 0.00%30 6.00 2.20 1.76 1.31 0.55 0.2435 7.00 2.25 1.76 1.31 0.77 0.2440 10.00 2.25 1.85 1.74 0.77 0.2745 3.50 2.25 1.85 2.32 1.35 0.2850 0.00 2.25 1.85 2.00 1.60 0.3055 0.00 0.00 0.00 0.00 0.00 0.00





* Retirement assumption prior to age 55 is for any member as of January 18, 2000 upon completion of 20 years of service.

Age

Annual Rates of

Death

DisabilityOrdinary

AccidentalMale Female Ordinary Accidental

25 0.037% 0.019% 0.006% 0.050% 0.029%

30 0.038 0.022 0.006 0.147 0.139

35 0.056 0.035 0.008 0.333 0.238

40 0.090 0.055 0.008 0.400 0.318

45 0.121 0.085 0.009 0.448 0.291

50 0.173 0.133 0.009 0.510 0.179

55 0.245 0.197 0.014 0.720 0.161

60 0.363 0.301 0.013 1.280 0.161

64 0.538 0.428 0.008 2.400 0.161

65 & Over 0.000 0.000 0.000 0.000 0.000

Age

Annual Rates of

Salary Increases

Service Retirements

Length of Service

Less than 21 Years*

21 to 24 Years 25 Years

26 or More Years

FY2012 toFY2016

FY2017 andThereafter

25 8.62% 9.87%

30 6.16 7.41

35 4.67 5.92

40 2.50% 0.00% 45.57% 15.40% 4.01 5.26

45 2.50 0.00 52.98 15.40 3.95 5.20

50 3.75 0.00 56.77 15.40 3.95 5.20

55 3.20 0.00 59.04 17.48 3.95 5.20

60 3.20 0.00 77.49 22.78 3.95 5.20

64 37.50 0.00 77.49 37.80 3.95 5.20

65 & Over 100.00 100.00 100.00 100.00 3.95 5.20





Deaths After Retirement: RP-2000 Combined Healthy Mortality Tables for service retirements and beneficiariesprojected on a generational basis using projection Scale AA. Special mortality tables are used for the period afterdisability retirement. Representative values of the assumed annual rates of mortality are as follows:

Age

Service Retirementsand Beneficiaries

AgeDisability

RetirementsMen Women55 0.362% 0.272% 35 0.598%60 0.675 0.506 40 0.63465 1.274 0.971 45 0.80370 2.221 1.674 50 1.05875 3.783 2.811 55 1.21080 6.437 4.588 60 1.42685 11.076 7.745 65 1.949

Marriage: Husbands are assumed to be 3 years older than wives. Among the active population, 90% of partici-pants are assumed married. No children are assumed. Neither the percentage married nor the number of chil-dren assumption is individually explicit, but they are considered reasonable as a single combined assumption.

Valuation Method: Projected Unit Credit Method. This method essentially funds the System’s benefits accruedto the valuation date. Experience gains and losses are recognized in future accrued liability contributions. Inaccordance with Chapter 78, P.L. 2011, beginning with the July 1, 2010 actuarial valuation, the accrued liabili-ty contribution shall be computed so that if the contribution is paid annually in level dollars, it will amortize theunfunded accrued liability over an open 30 year period. Beginning with the July 1, 2018 actuarial valuation, theaccrued liability contribution shall be computed so that if the contribution is paid annually in level dollars it willamortize the unfunded accrued liability over a closed 30 year period (i.e., for each subsequent valuation, theamortization period shall decrease by one year.) Beginning with the July 1, 2028 actuarial valuation, when theremaining amortization period reaches 20 years, any increase or decrease in the unfunded accrued liability as aresult of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respective-ly, the amortization period for the unfunded accrued liability, unless an increase in the amortization period willcause it to exceed 20 years. If an increase in the amortization period as a result of actuarial losses for a valua-tion year would exceed 20 years, the accrued liability contribution shall be computed for the valuation year usinga 20 year amortization period.

Chapter 78, P.L. 2011 increased member contributions from 8.5% to 10.0% of compensation. Based on discus-sions with the Division of Pension and Benefits, member contributions in excess of 8.5% of compensation shallnot reduce employer normal cost contributions.

Asset Valuation Method: A five year average of market values with write-up was used. This method takes intoaccount appreciation (depreciation) in investments in order to smooth asset values by averaging the excess ofthe actual over the expected income, on a market value basis, over a five-year period.





STATE

ValuationDate


AverageAnnual



Allowance Number*Annual**Allowance

7/1/11 578 $26,839,762 117 $3,116,709 5,023 $203,579,687 14.28% $40,530

7/1/10 466 20,752,289 85 2,577,204 4,562 178,146,637 11.69 39,050

7/1/09 448 19,077,696 82 2,165,118 4,181 159,495,927 14.73 38,148

7/1/08 430 18,467,571 50 1,293,499 3,815 139,018,953 15.32 36,440

7/1/07 409 17,214,170 70 1,657,156 3,435 120,552,765 17.50 36,844

7/1/06 279 9,952,284 70 1,643,698 3,096 102,600,960 10.82 33,140

ValuationDate


AverageAnnual




7/1/11 2,613 $157,395,175 954 $29,687,515 33,013 $1,553,435,879 9.94% $47,055

7/1/10 2,088 117,656,689 856 26,753,568 31,354 1,413,047,858 6.85 45,068

7/1/09 1,703 90,251,963 859 25,570,826 30,122 1,322,470,071 8.20 43,904

7/1/08 1,635 81,814,446 700 21,185,974 29,278 1,222,284,655 6.69 41,748

7/1/07 1,840 87,997,262 829 23,063,802 28,343 1,145,659,599 8.59 41,949

7/1/06 1,656 77,254,137 694 18,600,384 27,332 1,055,049,325 7.99 38,601

LOCAL EMPLOYERS

ValuationDate


AverageAnnual




7/1/11 3,191 $184,234,937 1,071 $32,804,224 38,036 $1,757,015,566 10.42% $46,193

7/1/10 2,554 138,408,978 941 29,330,772 35,916 1,591,194,495 7.37 44,303

7/1/09 2,151 109,329,659 941 27,735,944 34,303 1,481,965,998 8.86 43,202

7/1/08 2,065 100,282,017 750 22,479,473 33,093 1,361,303,608 7.51 41,136

7/1/07 2,249 105,211,432 899 24,720,958 31,778 1,266,212,364 9.38 41,402

7/1/06 1,935 87,206,421 764 20,244,082 30,428 1,157,650,285 8.24 38,046

TOTAL SYSTEM

* These values include Domestic Relations beneficiaries in receipt but exclude deferred vested terminations.** The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.




SCHEDULE OF ACTIVE MEMBER VALUATION DATA*

STATE

Valuation Date

Number of Active Members

AnnualCompensation

AverageCompensation


Compensation7/1/11 7,237 $547,809,629 $75,696 4.07%7/1/10 7,572 550,731,084 72,733 5.817/1/09 7,915 544,071,811 68,739 0.187/1/08 7,936 544,555,658 68,618 0.377/1/07 7,968 544,750,465 68,367 6.557/1/06 8,135 521,969,055 64,163 4.58

LOCAL EMPLOYERS

Valuation Date


AnnualCompensation

AverageCompensation


Compensation7/1/11 34,762 $3,203,676,618 $92,160 3.96%7/1/10 36,632 3,247,452,128 88,651 3.047/1/09 37,235 3,203,508,603 86,035 2.437/1/08 37,530 3,152,174,629 83,991 4.547/1/07 37,163 2,985,725,499 80,341 4.397/1/06 36,690 2,823,844,608 76,965 4.20

TOTAL SYSTEM

Valuation Date


AnnualCompensation

AverageCompensation


Compensation7/1/11 41,999 $3,751,486,247 $89,323 3.96%7/1/10 44,204 3,798,183,212 85,924 3.527/1/09 45,150 3,747,580,414 83,003 2.087/1/08 45,466 3,696,730,287 81,308 3.947/1/07 45,131 3,530,475,964 78,227 4.807/1/06 44,825 3,345,813,663 74,642 4.30

* Includes all contributing and non-contributing active members.




SOLVENCY TEST

STATE

ValuationDate



Benefits*


(1)Aggregate Member

Contributions



Members (1) (2) (3)7/1/11 $434,353,581 $2,240,031,414 $1,252,140,684 $2,173,255,647 100.00% 77.63% 0.00%7/1/10 439,239,135 1,914,386,462 1,318,735,661 2,190,654,958 100.00 91.49 0.007/1/09 427,713,716 1,998,329,812 1,567,215,952 2,268,272,056 100.00 92.10 0.007/1/08 417,037,087 1,745,461,874 1,586,619,949 2,343,170,793 100.00 100.00 11.397/1/07 405,941,434 1,477,965,756 1,542,724,623 2,368,209,888 100.00 100.00 31.397/1/06 390,720,165 1,260,477,135 1,430,979,377 2,230,157,166 100.00 100.00 40.46

ValuationDate



Benefits*


(1)Aggregate Member

Contributions



Members (1) (2) (3)7/1/11 $2,611,348,759 $16,074,784,440 $8,292,498,989 $21,051,681,692 100.00% 100.00% 28.53%7/1/10 2,610,141,488 14,279,203,074 8,712,653,564 20,367,865,987 100.00 100.00 39.927/1/09 2,527,185,808 15,411,236,571 10,510,419,386 20,669,565,701 100.00 100.00 25.997/1/08 2,396,790,723 14,303,353,327 10,170,962,482 20,404,804,535 100.00 100.00 36.427/1/07 2,262,086,714 13,148,597,825 9,151,510,904 19,575,249,807 100.00 100.00 45.517/1/06 2,143,097,866 12,145,019,496 8,619,405,298 18,353,459,373 100.00 100.00 47.16

LOCAL EMPLOYERS

ValuationDate



Benefits*


(1)Aggregate Member

Contributions



Members (1) (2) (3)7/1/11 $3,095,702,340 $18,314,815,854 $9,544,639,673 $23,224,937,339 100.00% 100.00% 19.53%7/1/10 3,049,380,623 16,193,589,536 10,031,389,225 22,558,520,945 100.00 100.00 33.05

7/1/09 2,954,899,524 17,409,566,383 12,077,635,338 22,937,837,757 100.00 100.00 21.31

7/1/08 2,813,827,810 16,048,815,201 11,757,582,431 22,747,975,328 100.00 100.00 33.05

7/1/07 2,668,028,148 14,626,563,581 10,694,235,527 21,943,459,695 100.00 100.00 43.47

7/1/06 2,533,818,031 13,405,496,631 10,050,384,675 20,583,616,539 100.00 100.00 46.21

TOTAL SYSTEM

* Actuarial Value including receivable amounts.




ANALYSIS OF PAST FINANCIAL EXPERIENCERECONCILIATION OF EMPLOYER CONTRIBUTION RATES

STATE

Valuation YearJuly 1,2011

July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1,2006

Prior Year Contribution Rate 70.70%ø 71.02%ø 64.36%ø 56.70%ø 53.70%ø 52.58%

Net Change Due to:Current New Entrants 0.22 0.15 0.17 0.18 0.10 0.11Excess Salary Increases (0.43) (0.39) (0.64) (0.96) 0.16 0.06Assumption/Method Changes (2.44)## (4.41)øø 0.00 1.20 0.00 0.00COLA (0.25) (0.41) 0.31 (0.04) 0.15 0.08Active and Other Experience (0.01) 0.41 0.01 0.62 0.76 (0.42)Retiree Experience 0.01 0.03 0.02 0.08 0.08 0.07Investment Loss/(Gain) 0.99 1.30 1.64 0.66 0.17 0.65Net Effect of Chapter 8* 0.48 0.68 1.03 1.06 0.33 0.36Appropriation Act** 5.56 3.99 4.12 4.86 1.25 1.22Chapter 78, P.L. 2011 N/A (1.67) N/A N/A N/A N/AActual Contribution Rate• Prior to Reflecting Chapter 1, P.L. 2010 74.83%ø 70.70%ø 71.02%ø 64.36%ø 56.70%ø 54.71%• Reflecting Chapter 1, P.L. 2010 21.38%ø 10.10%ø N/A N/A N/A N/A






July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1,2006

Prior Year Contribution Rate 23.08%ø 30.20%ø 27.85%ø 24.37%ø 24.11%ø 24.42%

Net Change Due to:Current New Entrants 0.07 0.21 0.15 0.12 0.13 0.09Excess Salary Increases (0.47) (0.42) (0.70) 0.30 0.17 0.07Assumption/Method Changes (0.05)## 0.66øø 0.00 2.73 0.00 0.00COLA (0.30) (0.50) 0.40 (0.06) 0.24 0.14Active and Other Experience 2.47 1.83 1.97 1.13 1.10 1.05Retiree Experience 0.01 0.04 0.03 0.12 0.12 0.12Investment Loss/(Gain) 1.20 1.68 2.29 0.80 0.05 0.74Net Effect of Chapter 8* (2.00) (1.89) (1.79) (1.66) (1.55) (1.51)Chapter 108 0.00 0.00 0.00 0.00 0.00 0.00Chapter 78, P.L. 2011 N/A (8.73) N/A N/A N/A N/AActual Contribution Rate# 24.01%ø 23.08%ø 30.20%ø 27.85%ø 24.37%ø 25.12%

LOCAL EMPLOYERS

* Net effect of the change in the calculation of the July 1, 1998 actuarial value of System assets and elimination of the Local Employers’ accrued liabil-ity contribution for the period ending June 30, 1997.

** Net change for July 1, 2011 is due to the provisions of Chapter 1, P.L. 2010. Net change due to Appropriation Act for July 1, 2010 includes 0.17%change due to the Fiscal Year 2010 Appropriation Act, 0.15% change due to the Fiscal Year 2011 Appropriation Act and 3.67% for the Fiscal Year 2012Appropriation Act. Net change due to Appropriation Act for July 1, 2009 includes 0.26% change due to the Fiscal Year 2009 Appropriation Act, 0.08%change due to the Fiscal Year 2010 Appropriation Act and 3.78% for the Fiscal Year 2011 Appropriation Act. Net change due to Appropriation Act forJuly 1, 2008 includes 1.63% change due to the Fiscal Year 2009 Appropriation Act and 3.23% change due to the Fiscal Year 2010 Appropriation Act.

# Includes rates attributable to Chapter 204 and Chapter 39 requirements which are billed to specific locations.

## INet effect of the Board approved revised demographic assumptions based on the June 30, 2011 experience investigations and the Treasurer approvedrevised economic assumptions.

Ø Excludes contribution rates payable to the Non-Contributory Group Insurance Premium Fund. For State, the contribution rates are 1.64% for 2011,1.53% for 2010, 1.46% for 2009, 1.47% for 2008, 1.47% for 2007 and 1.01% for 2006. For Local, the contribution rates are 1.00% for 2011, .85%for 2010, 1.20% for 2009, 1.22% for 2008, 1.25% for 2007 and 1.01% for 2006.

ØØ Due to the State’s decision to reduce the lag period between the valuation year and the contribution from three years to two years.


1. ELIGIBILITY FOR MEMBERSHIPEnrollment is restricted to eligible policemen andfiremen who are permanent and full-time and whopass the physical and mental fitness requirements.The maximum enrollment age is 35.

2. DEFINITIONS

Plan Year: The 12-month period beginning on July1 and ending on June 30.

Credited Service: A year of service is credited foreach year an employee is a Member of theRetirement System plus service, if any, covered bya prior service liability.

Average Final Compensation (AFC): The averageannual compensation for the three consecutiveyears of Service immediately preceding retirementor the highest three consecutive fiscal years ofMembership Service.

Compensation: Base salary upon which contribu-tions by a Member to the Annuity Savings Fundwere based in the last year of Service. ForAccidental Death, benefits are computed at theannual rate of salary. In accordance with Chapter1, P.L. 2010, for members hired on or after May 22,2010, compensation cannot exceed the annualmaximum wage contribution base for SocialSecurity pursuant to the Federal InsuranceContribution Act.

Final Compensation (FC): Annual compensationreceived by the member in the last 12 months ofCredited Service preceding his retirement. Inaccordance with Chapter 1, P.L. 2010, for membershired on or after May 22, 2010, FC means the aver-age annual compensation for the three fiscal yearsof membership providing the largest benefit.

Accumulated Deductions: The sum of all amountsdeducted from the compensation of a Member or con-tributed by him or on his behalf without interest.

3. BENEFITS

Service Retirement: Eligibility means age 55 or 20years of credited service for an employee who was

a member of the Retirement System as of January18, 2000 and age 55 for an employee who becamea member of the Retirement System after January18, 2000; mandatory at age 65 (except that amember hired prior to January 1, 1987 may remaina member of the System until the member attainsthe earlier of age 68 or 25 years of service).Benefit is an annual retirement allowance equal toa member annuity plus an employer pension whichtogether equals the greater of:

(i) 1/60th of FC for each year of Credited Service; or

(ii) 2% of FC multiplied by years of CreditedService up to 30 plus 1% of FC multiplied byyears of Service over 30. (Prior to January 18,2000, this benefit was based on AFC ratherthan FC. However, Policy Memorandum 4-2000,which interpreted the provisions of Chapter428, P.L. 1999, authorized the change in thesalary basis).

(iii)50% of FC if the member has 20 or more yearsof Credited Service.

Chapter 428 also requires that, in addition to the50% of FC benefit, any member as of January 18,2000 who will have 20 or more years of CreditedService and is required to retire upon attaining age65 (except that a member hired prior to January 1,1987 may remain a member of the System until themember attains the earlier age of 68 or 25 years ofcreditable service), shall receive an additionalbenefit equal to 3% of FC for each year of CreditedService over 20 years but not over 25 years.

Special Retirement: After completion of 25 yearsof Credited Service. The annual retirement benefitis equal to a member annuity plus an employerpension which together equal 65% of FC plus 1%of FC for each year of Credited Service over 25.Effective for members hired after June 28, 2011,the annual retirement benefit is equal to a mem-ber annuity plus an employer pension whichtogether equal 60% of FC plus 1% of FC for eachyear of credited service over 25. There is a maxi-mum benefit of 70% of FC (65% of FC for members



BRIEF SUMMARY OF THE BENEFIT AND CONTRIBUTION PROVISIONS AS INTERPRETED FOR VALUATION PURPOSES


hired after June 28, 2011) except for those mem-bers with 30 or more years of Credited Service onJune 30, 1979.

Vested Termination:a. Eligible upon termination of service prior to

age 55 and prior to 10 years of Service. Thebenefit equals a refund of AccumulatedDeductions less any outstanding loans.

b. Eligible upon termination of service prior toage 55 and after 10 years of Service (but lessthan 20 years if a member on or prior toJanuary 18, 2000 or less than 25 years of serv-ice if a member after January 18, 2000). Thebenefit is a deferred retirement benefit, com-mencing at age 55, equal to a member annu-ity plus an employer pension which togetherprovide a retirement allowance equal to 2% ofFC multiplied by years of Credited Service, upto 30 plus 1% of FC multiplied by years ofcredited service over 30.

Death Benefits:

ORDINARY DEATH BENEFIT - LUMP SUM

(1) If a member dies prior to retirement, the benefitpayable is as follows:

A lump sum amount equal to 3-1/2 times FCpayable to the member’s beneficiary.

(2) After retirement but prior to age 55, the benefit isas follows:

(i) For death while a Disabled Retiree the benefitis equal to 3-1/2 times Compensation.

(ii) For death while a Deferred Retiree the benefitis equal to his Accumulated Deductions.

(iii)For death while a Retiree who has completed20 years of Service, the benefit is equal to 1/2times FC.

(3) After retirement and after age 55, the benefitpayable is equal to 1/2 times Compensation.(Note: If a Member is not disabled, 10 years ofCredited Service is required for Members enrollingafter July 1, 1971.)

ORDINARY DEATH BENEFIT - SURVIVOR ANNUITY

(1) If a member dies prior to retirement, the benefitpayable to a widow (widower) is equal to 50% ofFC (20% of FC payable to one child, 35% of FCpayable to two children or 50% of FC payable tothree or more children if there is no survivingwidow or widower or if the widow or widower diesor remarries or 25% of FC payable to one parent or40% of FC payable to two parents if no survivingwidow, widower, or child. If no widow, widower,child, or parent, the benefit payable to a benefici-ary is the aggregate Accumulated Contributions atthe time of death).

(2) For any member who retired after December 18,1967, the benefit payable to widow (widower) isequal to 50% of FC plus 15% of FC for one childand 25% of FC for two or more children.

If no spouse, or spouse remarries, the benefit isequal to 20% of FC for one child, 35% for two chil-dren, and 50% for three or more children.

There is also a minimum benefit payable to widows(widowers) of $4,500 a year.

(3) For any member who retired with an AccidentalDisability Benefit, the benefit payable is equal to$4,500 a year to the widow (widower). If there isno widow (widower) the benefit payable is $600 ayear for 1 child, $960 a year for 2 children, and$1,500 a year for 3 or more children. The benefitfor children is payable until age 18.

ACCIDENTAL DEATH BENEFIT

A death while active resulting from injuries receivedfrom an accident during performance of duty is eligi-ble for a lump sum equal to the AccumulatedDeductions plus 3-1/2 times Compensation plus anannuity benefit payable is as follows:

(i) The benefit to a widow or widower is equal to 70%of Compensation.

(ii) The benefit, when there is no spouse, or spouse isremarried, is equal to 20% of Compensation forone child, 35% for two children, 50% for three or





more children. The benefit is payable while thechildren are under age 18, or until age 24 if theyare full-time students, or it is payable for life ifthey are disabled.

(iii)The benefit, when there is no spouse or children,is equal to 25% of Compensation for one parentand 40% for two parents.

(iv) The benefit, when there is no relation as statedabove, is equal to the Accumulated Deductions andis payable to a beneficiary or to the Member’sestate. This is also the minimum benefit payableunder (i), (ii) and (iii).

Disability Benefits:

ORDINARY DISABILITY RETIREMENT

A Member is eligible for Ordinary Disability Retirementif he (she) has 4 years of Service and is totally andpermanently incapacitated from the performance ofusual or available duties. The benefit is equal to thegreater of:

(i) 1-1/2% of FC times the number of years of Credited Service; or

(ii) 40% of FC.

In addition, a member who has at least 20 yearsbut less than 25 years of Credited Service and whois required to retire upon application by theemployer on or after January 18, 2000 shall

receive a benefit equal to a member annuity plusan employer pension which together provide atotal retirement allowance equal to 50% of FC plus3% of FC multiplied by the number of years ofCredited Service over 20 but not over 25.

ACCIDENTAL DISABILITY RETIREMENT

A Member is eligible upon total and permanentincapacitation from the performance of usual oravailable duties as a result of injury during theperformance of regular duties. The benefit payableis equal to a Member annuity plus an employerpension which together equals 2/3 of theCompensation at date of injury.

SPECIAL DISABILITY RETIREMENT

A member is eligible for Special DisabilityRetirement if he (she) has 5 years of CreditedService, is under age 55, and has received a hearttransplant. The benefit payable is equal to aMember annuity plus an employer pension whichtogether equals 50% of FC.

4. MEMBER CONTRIBUTIONSEach member contributes 8.5% of Compensation.Chapter 78, P.L. 2011 increased the MemberContributions from 8.5% to 10% of Compensationeffective October 2011.





September 14, 2012

Board of TrusteesState Police Retirement System

of New Jersey



An actuarial valuation of the State Police Retirement System is performed annually to meas-ure the ongoing costs of the System and the progress towards the funding goals of the Systemover time. In general, the financial goals of the State Police Retirement System are a patternof contributions, which is sufficient to cover the normal cost of the System plus the contri-bution towards the unfunded accrued liability.

In accordance with the New Jersey statutes, employers are required to make two contributionsto the System, a normal contribution and an accrued liability contribution. The normal con-tribution for basic allowances and cost of living adjustments (COLA’s) is defined under theProjected Unit Credit funding method as the present value of the benefits accruing during thecurrent year. Prior to the July 1, 2010 valuation, the unfunded accrued liability contributionfor basic allowances and COLA’s was determined as a level percentage of pay required to amor-tize the unfunded accrued liability over 30 years in annual payments increasing by 4.0% peryear. The funding reform provisions of Chapter 78, P.L. 2011 changed the methodology usedto amortize the unfunded accrued liability. Beginning with the July 1, 2010 actuarial valua-tion, the accrued liability contribution shall be computed so that if the contribution is paidannually in level dollars, it will amortize the unfunded accrued liability over an open 30 yearperiod. Beginning with the July 1, 2019 actuarial valuation, the accrued liability contributionshall be computed so that if the contribution is paid annually in level dollars it will amortizethe unfunded accrued liability over a closed 30 year period (i.e., for each subsequent actuar-ial valuation, the amortization period shall decrease by one year). Beginning with the July 1,2029 actuarial valuation when the remaining amortization period reaches 20 years, anyincrease or decrease in the unfunded accrued liability as a result of actuarial losses or gainsfor subsequent valuation years shall serve to increase or decrease, respectively, the amortiza-tion period for the unfunded accrued liability, unless an increase in the amortization periodwill cause it to exceed 20 years. If an increase in the amortization period as a result of actu-arial losses for a valuation year would exceed 20 years, the accrued liability contribution shallbe computed for the valuation year using a 20 year amortization period.

The valuation reflects the final provisions of the Appropriation Act for fiscal year 2011. Thefiscal year 2011 recommended pension contribution of $103,745,281 has been reduced to $0.

The valuation reflects the funding reform provisions of Chapter 1, P.L. 2010. Chapter 1, P.L.2010 allows the State Treasurer to phase in to the full recommended pension contribution.The State would be in compliance with its funding requirement provided the State makes apayment of at least 1/7th of the full contribution, as computed by the actuaries, in the Statefiscal year commencing July 1, 2011 and makes a payment in each subsequent fiscal year thatincreases by at least an additional 1/7th until payment of the full contribution is made in theseventh fiscal year and thereafter. Therefore, the fiscal year 2012 recommended State pensioncontribution of $89,671,744 has been reduced to $12,810,249 and has been recognized as areceivable contribution for purposes of this valuation. This amount may be subject to changeper the requirements of the State’s fiscal year 2012 spending plan.


A contribution of $89,535,903 is recommended for the fiscal year beginning July 1, 2012. Thisamount is comprised of an unfunded accrued liability payment of $50,068,225 plus a normalcontribution of $39,467,678. However, the provisions of Chapter 1, P.L. 2010 allow the StateTreasurer to reduce the recommended pension contribution for fiscal year 2013 to no less than2/7th of the recommended pension contribution. Accordingly, the Chapter 1, P.L. 2010 mini-mum required pension contribution is $25,581,686. This is comprised of an unfunded accruedliability payment of $14,305,207 and a normal contribution of $11,276,479. This amount maybe subject to change per the requirements of the State’s fiscal year 2013 spending plan.


As stipulated in the statutes, an actuarial investigation of the demographic experience of themembers and beneficiaries of the State Police Retirement System is made once in every three-year period. The contributions for the fiscal year beginning July 1, 2012 were calculated usingthe demographic assumptions that were determined from the July 1, 2005 – June 30, 2008Experience Study and approved by the Board of Trustees at the May 2009 Board meeting. Asmandated by the Statutes, these assumptions will remain in effect for valuation purposes untilsuch time the Board adopts revised demographic assumptions.

The Treasurer, upon recommendation from the Directors of the Division of Pensions andBenefits and the Division of Investments, has recommended a change in the economicassumptions used for the valuation. The rate of investment return has been revised from8.25% per annum to 7.95% per annum, and the assumed future salary increases have beenrevised from 5.45% per annum to 3.45% per annum for fiscal year ending 2012 through fis-cal year ending 2016 and 4.70% per annum for fiscal years ending 2017 and thereafter. Theseeconomic assumptions will remain in effect for valuation purposes until such time theTreasurer recommends revised economic assumptions.

The valuation cost method used is the projected unit credit method. This method essentiallyfunds the System’s benefits accrued to the valuation date. Experience gains and losses are rec-ognized in future accrued liability contributions. The asset valuation method used was a five-year average of market values with write-up. This method takes into account appreciation(depreciation) in investments in order to smooth asset values by averaging the excess of theactual over the expected income, on a market value basis, over a five-year period.

The valuation does not take into account any changes in U.S. equity prices and bond yieldsthat have occurred after the valuation date. Taking these into account may significantlychange the market and actuarial value of assets shown. The effect of these events on anyfunded ratios shown, and on Retirement System calculations, is not known. RetirementSystem funding and financial accounting rules generally prohibit reflection of changes inassets and underlying economic conditions that occur after the valuation date.

The assumptions used to prepare the information required by Statements No. 25, No. 27 andNo. 50 of the Governmental Accounting Standards Board (GASB) were the same as those usedfor funding purposes.

In our opinion, the attached schedules of valuation results fairly represent the status of theState Police Retirement System and present an accurate view of historical data. The underly-ing assumptions and methods used for both funding and GASB disclosure purposes are consis-tent with the statutory specifications and represent a best estimate of the aggregate futureexperience of the System.

The following supporting schedules in the Actuarial Section were prepared by BuckConsultants:


� Summary of Actuarial Assumptions and Methods

� Schedule of Retired Members and Beneficiaries Added to and Removed from Rolls

� Schedule of Active Member Valuation Data

� Solvency Test

� Analysis of Past Financial Experience Reconciliation of Employer Contribution Rates

� Summary of the Benefit and Contribution Provisions as Interpreted for ValuationPurposes

In addition, Buck Consultants prepared the “Schedule of Funding Progress” and the “Scheduleof Employer Contributions” in the Financial Section.

To the best of our knowledge, this information is complete and accurate. The valuation wasperformed by, and under the supervision of, independent qualified actuaries who are membersof the American Academy of Actuaries with experience in performing valuations for publicretirement systems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The cal-culations are based on the current provisions of the Retirement System, and on actuarialassumptions that are individually and in the aggregate internally consistent and reasonablebased on the actual experience of the Retirement System.


Buck Consultants







Section 32 of Chapter 89, P.L. 1965 of the New Jersey Statutes provides that once in every three-year period theactuary shall examine in detail the demographic experience of the members and beneficiaries of the State PoliceRetirement System to assure that the tables used for determining expected liabilities are consistent with recentexperience.

The demographic assumptions used for the July 1, 2011 actuarial valuation of the State Police Retirement Systemwere based on the results of the experience study, which covered the period from July 1, 2005 to June 30, 2008,which were approved by the Board of Trustees, and the revised economic assumptions, which were recommendedby the Treasurer.




Salary Increases: Salaries are assumed to increase by 3.45% per year for fiscal year ending 2012 through fiscalyear ending 2016 and 4.70% per year for fiscal years ending 2017 and thereafter.

Termination: Withdrawal rates vary by length of service. Illustrative rates are shown below:

Age

Lives Per Thousand

Less Than 5 Years of Service

Five to Nineteen Years of Service

25 5.0 0.030 5.0 4.035 8.3 1.040 0.0 1.545 0.0 2.050 0.0 0.0

Separations from Service: Representative mortality, disability, and retirement rates are as follows:

Marriage: Husbands are assumed to be 3 years older than wives. Among the active population, 83.3% of partic-ipants are assumed married. No children are assumed. Neither the percentage married nor number of childrenassumption is individually explicit but they are considered as a single combined assumption.

Age

Annual Rates of*Ordinary Death Accidental

DeathOrdinary Disability

Accidental DisabilityMale Female

25 0.4% 0.2% 0.4% 0.6% 0.3%30 0.4 0.3 0.5 0.9 0.535 0.6 0.5 0.5 2.4 1.940 0.9 0.7 0.5 2.5 2.145 1.2 1.1 0.6 3.1 2.150 1.7 1.7 0.9 5.4 2.2

*per one thousand lives.





Valuation Method: Projected Unit Credit Method. This method essentially funds the System’s benefits accrued tothe valuation date. Experience gains and losses are recognized in future accrued liability contributions. In accor-dance with Chapter 78, P.L. 2011, beginning with the July 1, 2010 actuarial valuation, the accrued liability con-tribution shall be computed so that if the contribution is paid annually in level dollars, it will amortize theunfunded accrued liability over an open 30 year period. Beginning with the July 1, 2019 actuarial valuation, theaccrued liability contribution shall be computed so that if the contribution is paid annually in level dollars it willamortize the unfunded accrued liability over a closed 30 year period (i.e., for each subsequent valuation, theamortization period shall decrease by one year). Beginning with the July 1, 2029 actuarial valuation, when theremaining amortization period reaches 20 years, any increase or decrease in the unfunded accrued liability as aresult of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respective-ly, the amortization period for the unfunded accrued liability, unless an increase in the amortization period willcause it to exceed 20 years. If an increase in the amortization period as a result of actuarial losses for a valua-tion year would exceed 20 years, the accrued liability contribution shall be computed for the valuation year usinga 20 year amortization period.

Chapter 78, P.L. 2011 increased the member contributions from 7.5% to 9.0% of compensation. Based on dis-cussions with the Division of Pension and Benefits, member contributions in excess of 7.5% of compensation shallnot reduce the State normal cost contribution.

Asset Valuation Method: A five-year average of market values with write-up. (This method takes into accountappreciation (depreciation) in investments in order to smooth asset values by averaging the excess of the actu-al over the expected income, on a market value basis, over a five-year period.)

Deaths After Retirement: For healthy inactive members and beneficiaries of deceased members the RP 2000Combined Healthy Male (set back 3 years) and RP 2000 Combined Healthy Female Mortality tables are used. Fordisabled members the RP 2000 Combined Healthy Male (set forward 5 years) and RP 2000 Combined HealthyFemale Mortality (set forward 5 years) tables are used. Illustrative rates of mortality are shown below:

Age

Lives Per ThousandRetired Members and Beneficiaries

of Deceased Members Disabled MembersMales Females Males Females

55 2.7 2.7 6.8 5.160 4.7 5.1 12.7 9.765 8.8 9.7 22.2 16.770 16.1 16.7 37.8 28.175 27.3 28.1 64.4 45.980 46.9 45.9 110.8 77.585 80.5 77.5 183.4 131.790 136.0 131.7 267.5 194.5





Rates of Retirement: Rates of retirement vary by length of service and age (if more than 24 years of service) with100% of those remaining at age 55 retiring at age 55. The rates are shown below:

Service Lives Per 10020 2.0%21 0.522 0.023 0.024 0.025 40.0

Greater than 25:(a) through age 42 5.0(b) ages 43-47 25.0(c) ages 48-53 30.0(d) age 54 55.0





ValuationDate


AverageAnnual




7/1/11 232 $14,848,311 66 $2,030,490 2,818 $152,950,538 10.14% $54,276

7/1/10 107 6,656,153 40 1,345,937 2,652 138,873,702 3.97 52,366

7/1/09 119 7,458,400 54 1,593,106 2,585 133,573,198 7.53 51,672

7/1/08 155 9,823,122 61 1,709,085 2,520 124,219,225 8.44 49,293

7/1/07 130 7,185,755 42 1,173,986 2,426 114,548,588 8.19 47,217

7/1/06 98 5,328,190 57 1,477,083 2,338 105,874,773 5.83 45,284

* These values include beneficiaries in receipt but exclude deferred vested terminations.** The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.

SCHEDULE OF ACTIVE MEMBER VALUATION DATAValuation

DateNumber of

Active MembersAnnual

Compensation Average

Compensation % Increase in

Average Compensation7/1/11 2,844 $275,219,752 $96,772 1.12%7/1/10 3,030 289,980,657 95,703 0.487/1/09 3,016 287,267,502 95,248 -0.147/1/08 2,947 281,087,566 95,381 3.907/1/07 2,999 275,301,995 91,798 4.387/1/06 2,993 263,220,592 87,945 3.43

SOLVENCY TEST

ValuationDate


Net AssetsAvailable for

Benefits*

Percentage of Accrued Liabilities Covered

by Net Assets Available

(1) Aggregate Member

Contributions

(2) Current Retirees& Beneficiaries


Members (1) (2) (3)7/1/11 $182,626,003 $1,634,856,377 $764,468,466 $2,015,624,130 100.00% 100.00% 25.92%7/1/10 185,587,970 1,466,806,024 844,700,143 2,019,350,048 100.00 100.00 43.447/1/09 175,349,297 1,647,110,535 1,002,955,736 2,067,242,877 100.00 100.00 24.417/1/08 166,360,000 1,492,340,059 950464,810 2,136,006,509 100.00 100.00 50.227/1/07 160,384,261 1,399,050,008 926,214,961 2,101,672,160 100.00 100.00 58.547/1/06 151,279,397 1,297,507,146 870,869,989 2,000,274,259 100.00 100.00 63.33

*Actuarial value including receivable amounts.






July 1,2010

July 1,2009

July 1,2008

July 1, 2007

July 1,2006

Effective Prior Year Contribution Rate 30.92%** 36.11%** 29.34%** 27.57%** 26.52%** 21.26%Net Change Due to:Current New Entrants 0.00 0.43 0.60 0.26 0.36 0.82Excess Salary Increases (0.64) (1.60) (0.87) (0.21) 0.14 0.28Assumption/Method Changes (1.75) N/A 2.41 N/A N/A 3.97COLA (0.39) (0.56) 0.43 (0.61) 0.28 0.13Retiree Mortality 0.05 0.10 0.06 0.05 0.07 0.07Active and Other Experience 0.19 0.59 (0.20) (0.03) (0.55) (0.82)Investment Loss/(Gain) 1.61 1.90 2.66 0.86 (0.02) 0.74Net Effect of Chapter 115* N/A N/A N/A N/A N/A 0.00Appropriation Act # 2.54 2.17 1.68 1.45 0.77 0.50Chapter 78, P.L. 2011 N/A (8.22) N/A N/A N/A N/A

Actual Contribution Rate:

• Prior to Reflecting Chapter 1, P.L.2010 32.53%** 30.92%** 36.11%** 29.34%** 27.57%** 26.95%

• Reflecting Chapter 1, P.L. 2010 9.30%** 4.42%** N/A N/A N/A N/A

* Reflects reduction in normal cost contribution due to use of excess assets. Chapter 92, P.L. 2007 removed language from the existing legislationthat permits the State Treasurer to decrease the normal contribution needed to fund the System when excess assets are available.

** Excludes contribution rates of 0.73% for 2011, 0.62% for 2010, 0.56% for 2009, 0.55% for 2008, 0.65% for 2007 and 0.43% for 2006 for pre-miums payable to the Non-Contributory Group Insurance Premium Fund.

# Change in 2011 is due to the provisions of Chapter 1, P.L. 2010.


1. ELIGIBILITY FOR MEMBERSHIPAll members of the former State Police andBenevolent Fund: full-time commissioned officers,non-commissioned officers or troopers of theDivision of State Police. Membership is a conditionof employment.

2. DEFINITIONSPlan Year: The 12-month period beginning on July1 and ending on June 30.

Service: Service rendered while a member asdescribed above.

Credited Service: A year is credited for each yearof service as an officer or trooper in the StatePolice. Service with other State RetirementSystems is included in the calculation of the retire-ment benefit at the rate of 1% of final compensa-tion for each year of service credit.

Compensation: Based on contractual salary,including maintenance allowance, received by themember in the last 12 months of credited servicepreceding retirement, termination or death.Compensation does not include individual salaryadjustments granted primarily in anticipation ofthe retirement or for temporary or extracurricularduties beyond the ordinary work day. (EffectiveJune 30, 1996, Chapter 113, P.L. 1997 providedthat the amount of compensation used for employ-er and member contributions and benefits underthe program cannot exceed the compensation lim-itation of Section 401(a)(17) of the InternalRevenue Code; Chapter 1, P.L. 2010 provides thatfor members hired on or after May 22, 2010, theamount of compensation used for employer andmember contributions and benefits under theSystem cannot exceed the annual maximum wagecontribution base for Social Security, pursuant tothe Federal Insurance Contributions Act.)

Final Compensation: Average compensationreceived by member in last 12 months of creditedservice preceding retirement or death. Such termincludes the value of the member’s maintenanceallowance for the same period. (Chapter 1, P.L.2010 provides that for members hired on or after

May 22, 2010, Final Compensation means the aver-age annual salary for service for which contribu-tions are made during any three fiscal years ofmembership providing the largest possible benefitto the member or the member’s beneficiary . Suchterm shall include the value of the member’s main-tenance allowance.)

Aggregate Contributions: The sum of all amountsdeducted from the compensation of a member orcontributed by him or on his behalf. For contribu-tion purposes, compensation does not includeovertime, bonuses, maintenance or any adjust-ments before retirement.

Adjusted Final Compensation: The amount ofcompensation or final compensation as adjusted,as the case may be, increased by the same percent-age increase which is applied in any adjustmentsof the compensation schedule of active membersafter the member’s death and before the date onwhich the deceased member of the retirement sys-tem would have accrued 25 years of service underan assumption of continuous service, at whichtime that amount will become fixed. Adjustmentsto compensation or adjusted final compensationshall take effect at the same time as any adjust-ments in the compensation schedule of activemembers.

3. BENEFITSService Retirement: Mandatory retirement at age55. Voluntary retirement prior to age 55 with 20years of credited service. Benefit is an annualretirement allowance equal to the greater of (a),(b), or (c), as follows:

a. 50% of final compensation;

b. For members retiring with 25 or more years ofservice, 65% of final compensation, plus 1%for each year of service in excess of 25 years,to a maximum of 70% of final compensation.

c. For members as of August 29, 1985 who wouldnot have 20 years of service by age 55, benefitas defined in (a) above. For members as ofAugust 29, 1985 who would have 20 years ofservice but would not have 25 years of service at



SUMMARY OF THE BENEFIT AND CONTRIBUTION PROVISIONS AS INTERPRETED FOR VALUATION PURPOSES


age 55, benefit as defined in (a) above plus 3%for each year of service in excess of 20 years.

Vested Termination: Termination of service prior toage 55. Benefit for 10 to 20 years of Service - Refundof aggregate contributions, or a deferred life annu-ity beginning at age 55 equal to 2% of final com-pensation for each year of service up to 20 years.

Ordinary Death:

BEFORE RETIREMENT

Death of an active member of the plan. Benefit isequal to:

a. Lump sum payment equal to 3-1/2 times finalcompensation, plus

b. Spousal life annuity of 50% of final compensa-tion payable until spouse’s death or remarriage.If there is no surviving spouse, or upon deathor remarriage, a total of 20%, 35% or 50% offinal compensation payable to one, two or threedependent children, respectively. If there is nosurviving spouse (or dependent children), anamount equal to 25% or 40% of final compen-sation to one or two dependent parents.

Minimum benefit: Aggregate contributions.

AFTER RETIREMENT

Death of a retired member of the plan. The bene-fit is equal to:

a. Lump sum of 50% of final compensation, plus

b. Spousal life annuity of 50% of final compensa-tion payable until spouse’s death or remar-riage. If there is no surviving spouse, or upondeath or remarriage, a total of 20%, 35% or50% of final compensation payable to one,two or three dependent children, respectively.

Accidental Death: Death of an active member ofthe plan resulting during performance of duties.Benefit is equal to:

a. Lump sum payment equal to 3-1/2 times finalcompensation, plus

b. Spousal life annuity of 70% of final compensa-tion payable until spouse’s death. If there isno surviving spouse, or upon death of the sur-

viving spouse, a total of 20%, 35% or 50% ofadjusted final compensation payable to one,two, or three dependent children, respectively.If there is no surviving spouse or dependentchildren, 25% or 40% of final compensation toone or two dependent parents.

Ordinary Disability Retirement: Mentally or phys-ically incapacitated for the performance of hisusual duty and of any other available duty in theDivision of State Police and such incapacity is like-ly to be permanent.

a. The benefit for members with less than fouryears of service is a refund of the member’saggregate contributions.

b. For members with at least four years of serv-ice, the benefit is an immediate life annuityequal to 40% of final compensation plus 1-1/2% of final compensation for years of cred-itable service in excess of 26-2/3.

c. For members who are forced to retire with 20but less than 25 years of service, the benefitis 50% of the member’s final compensationplus 3% of final compensation for each year ofservice in excess of 20 years, to a maximum of65% of final compensation.

For death following disability retirement, a lumpsum equal to 3-1/2 times final compensation ifdeath occurs prior to age 55 or 1/2 of final com-pensation after age 55.

Accidental Disability Retirement: Totally and per-manently disabled as a direct result of a traumaticevent occurring during and as a result of his regu-lar or assigned duties. Benefit is an immediate lifeannuity equal to 2/3 of final compensation. Upondeath after disability retirement, lump sum bene-fit of 3-1/2 times final compensation if deathoccurs before 55 and 1/2 times final compensationif death occurs after age 55.

4. MEMBER CONTRIBUTIONSEach member contributes 7.5% of Compensation.Chapter 78, P.L. 2011 increased MemberContributions from 7.5% to 9.0% of Compensationeffective October 2011.



SUMMARY OF THE BENEFIT AND CONTRIBUTION PROVISIONS, Continued


September 14, 2012State House CommissionJudicial Retirement System

of New Jersey


Members of the Commission:

An actuarial valuation of the Judicial Retirement System is performed annually to measure theongoing costs of the System and the progress towards the funding goals of the System over time.In general, the financial goals of the Judicial Retirement System are a pattern of contributions,which is sufficient to cover the normal cost of the System plus the contribution towards theunfunded accrued liability.

In accordance with the New Jersey statutes, employers are required to make two contributions tothe System, a normal contribution and an accrued liability contribution. The normal contributionfor basic allowances and cost of living adjustments (COLA’s) is defined under the Projected UnitCredit funding method as the present value of the benefits accruing during the current year. Priorto the July 1, 2010 valuation, the unfunded accrued liability contribution for basic allowances andCOLA’s was determined as a level percentage of pay required to amortize the unfunded accrued lia-bility over 30 years in annual payments increasing by 4.0% per year. The funding reform provi-sions of Chapter 78, P.L. 2011 changed the methodology used to amortize the unfunded accruedliability. Beginning with the July 1, 2010 actuarial valuation, the accrued liability contributionshall be computed so that if the contribution is paid annually in level dollars, it will amortize theunfunded accrued liability over an open 30 year period. Beginning with the July 1, 2019 actuar-ial valuation, the accrued liability contribution shall be computed so that if the contribution ispaid annually in level dollars it will amortize the unfunded accrued liability over a closed 30 yearperiod (i.e., for each subsequent actuarial valuation, the amortization period shall decrease by oneyear). Beginning with the July 1, 2029 actuarial valuation when the remaining amortization peri-od reaches 20 years, any increase or decrease in the unfunded accrued liability as a result of actu-arial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively,the amortization period for the unfunded accrued liability, unless an increase in the amortizationperiod will cause it to exceed 20 years. If an increase in the amortization period as a result ofactuarial losses for a valuation year would exceed 20 years, the accrued liability contribution shallbe computed for the valuation year using a 20 year amortization period.

The valuation reflects the final provisions of the Appropriation Act for fiscal year 2011. The fis-cal year 2011 recommended pension contribution of $34,653,737 has been reduced to $0.

The valuation reflects the funding reform provisions of Chapter 1, P.L. 2010. Chapter 1, P.L.2010 allows the State Treasurer to phase in to the full recommended pension contribution. TheState would be in compliance with its funding requirement provided the State makes a paymentof at least 1/7th of the full contribution, as computed by the actuaries, in the State fiscal yearcommencing July 1, 2011 and makes a payment in each subsequent fiscal year that increases byat least an additional 1/7th until payment of the full contribution is made in the seventh fis-cal year and thereafter. Therefore, the fiscal year 2012 recommended State pension contributionof $38,352,572 has been reduced to $5,478,938 and has been recognized as a receivable con-tribution for purposes of this valuation. This amount may be subject to change per the require-ments of the State’s fiscal year 2012 spending plan.


A contribution of $40,751,804 is recommended for the fiscal year beginning July 1, 2012. Thisis comprised of an unfunded accrued liability payment of $24,310,280 and a normal contribu-tion of $16,441,524. However, the provisions of Chapter 1, P.L. 2010 allows the State Treasurerto reduce the recommended pension contribution for fiscal year 2013 to no less than 2/7th ofthe recommended pension contribution. Accordingly, the Chapter 1, P.L. 2010 minimum requiredpension contribution is $11,643,372. This is comprised of an unfunded accrued liability pay-ment of $6,945,794 and a normal contribution of $4,697,578. This amount may be subject tochange per the requirements of the State’s fiscal year 2013 spending plan.


As stipulated in the statutes, an actuarial investigation of the demographic experience of themembers and beneficiaries of the Judicial Retirement System is made once in every three-yearperiod. The contributions for the fiscal year beginning July 1, 2012 were calculated using theactuarial assumptions that were determined from the July 1, 2005 – June 30, 2008 ExperienceStudy, which were approved by the State House Commission. As mandated by the Statutes, theseassumptions will remain in effect for valuation purposes until such time the State HouseCommission adopts revised demographic assumptions.

The Treasurer, upon recommendation from the Directors of the Division of Pensions and Benefitsand the Division of Investments, has recommended a change in the economic assumptions usedfor the valuation. The rate of investment return has been revised from 8.25% per annum to7.95% per annum, and the assumed future salary increases have been revised from 4.50% perannum to 2.50% per annum for fiscal year ending 2012 through fiscal year ending 2016 and3.75% per annum for fiscal years ending 2017 and thereafter. These economic assumptions willremain in effect for valuation purposes until such time the Treasurer recommends revised eco-nomic assumptions.

The valuation cost method used is the projected unit credit method. This method essentiallyfunds the System’s benefits accrued to the valuation date. Experience gains and losses are rec-ognized in future accrued liability contributions. The asset valuation method used was a five-year average of market values with write-up. This method takes into account appreciation(depreciation) in investments in order to smooth asset values by averaging the excess of theactual over the expected income, on a market value basis, over a five-year period.

The valuation does not take into account any changes in U.S. equity prices and bond yields thathave occurred after the valuation date. Taking these into account may significantly change themarket and actuarial value of assets shown. The effect of these events on any funded ratiosshown, and on Retirement System calculations, is not known. Retirement System funding andfinancial accounting rules generally prohibit reflection of changes in assets and underlying eco-nomic conditions that occur after the valuation date.

The assumptions used to prepare the information required by Statements No. 25, No. 27 and No.50 of the Governmental Accounting Standards Board (GASB) were the same as those used forfunding purposes.

In our opinion, the attached schedules of valuation results fairly represent the status of theJudicial Retirement System and present an accurate view of historical data. The underlyingassumptions and methods used for both funding and GASB disclosure purposes are consistentwith the statutory specifications and represent a best estimate of the aggregate future experi-ence of the System.






• Solvency Test

• Analysis of Past Financial ExperienceReconciliation of Employer Contribution Rates

• Summary of the Benefit and Contribution Provisions as Interpreted for Valuation Purposes


To the best of our knowledge, this information is complete and accurate. The valuation was per-formed by, and under the supervision of, independent qualified actuaries who are members ofthe American Academy of Actuaries with experience in performing valuations for public retire-ment systems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The calcu-lations are based on the current provisions of the Retirement System, and on actuarial assump-tions that are individually and in the aggregate internally consistent and reasonable based onthe actual experience of the Retirement System.


Buck Consultants







Section 31 of Chapter 40, P.L. 1973 of the New Jersey Statutes provides that once in every three-year period theactuary shall examine in detail the demographic experience of the members and beneficiaries of the JudicialRetirement System to assure that the tables used for determining expected liabilities are consistent with recentexperience.

The demographic assumptions used for the July 1, 2011 actuarial valuation of the Judicial Retirement System werebased on the results of the experience study, which covered the period from July 1, 2005 to June 30, 2008, whichwere approved by the State House Commission, and the revised economic assumptions, which were recommend-ed by the Treasurer.




Salary Increases: Salaries are assumed to increase by 2.50% per year for fiscal year ending 2012 through fiscalyear ending 2016 and 3.75% per year for fiscal years ending 2017 and thereafter.

Separations From Service: Representative mortality and disability rates are as follows:

Age

Lives per ThousandDeath

DisabilityMale Female30 0.38 0.22 0.2235 0.44 0.35 0.2640 0.77 0.55 0.3345 1.08 0.85 0.6450 1.51 1.33 1.1455 2.14 2.02 1.9760 3.62 3.48 3.2665 6.75 6.66 4.73





Deaths After Retirement: RP-2000 Combined Healthy Mortality Tables (set back 5 years for males and 3 years forfemales) for service retirement and beneficiaries of former members. The RP-2000 Disability Mortality Tables (setforward 2 years for males and females) are used to value disabled retirees. There has been no provision made forfuture mortality improvement after the valuation date. Representative values of the annual rates of mortality areas follows:

Retirement: It was assumed that the probability of retirement at age 65 for those judges who have 12 or moreyears of judicial service at age 65 is at 25% per year. In addition, retirement for members who have attainedaged 60 with 20 years of judicial service or attained age 65 with 15 years judicial service is at 30% at age 60,25% at age 65 and 20% for all other ages between ages 60 and 70. At age 70, all remaining active members areassumed to retire.

Marriage: Husbands are assumed to be 3 years older than wives. Among the active population, 90% of partici-pants are assumed married. No children are assumed. Neither the percentage married nor the number of chil-dren assumption is individually explicit but are considered reasonable as a single combined assumption.

Valuation Method: Projected Unit Credit Method. This method essentially funds the System’s benefits accruedto the valuation date. Experience gains and losses are recognized in future accrued liability contributions. Inaccordance with Chapter 78, P.L. 2011, beginning with the July 1, 2010 actuarial valuation, the accrued liabili-ty contribution shall be computed so that if the contribution is paid annually in level dollars, it will amortize theunfunded accrued liability over an open 30 year period. Beginning with the July 1, 2019 actuarial valuation, theaccrued liability contribution shall be computed so that if the contribution is paid annually in level dollars, itwill amortize the unfunded accrued liability over a closed 30 year period (i.e., for each subsequent actuarial val-uation the amortization period shall decrease by one year.) Beginning with the July 1, 2029 actuarial valuation,when the remaining amortization period reaches 20 years, any increase or decrease in the unfunded accrued lia-bility as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease,respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortizationperiod will cause it to exceed 20 years. If an increase in the amortization period as a result of actuarial lossesfor a valuation year would exceed 20 years, the accrued liability contribution shall be computed for the valua-tion year using a 20 year amortization period.

Chapter 78, P.L. 2011 increased the member contributions by 9% of salary, phased-in over a seven year period.Based on discussions with the Division of Pensions and Benefits, the increase in member contributions due toChapter 78, P.L. 2011 shall not reduce the State’s normal cost contribution.

Age

Lives Per ThousandRetired Members and Beneficiaries

of Deceased Members Disabled MembersMales Females Males Females

55 2.14 2.02 38.03 18.6560 3.62 3.48 44.98 24.0865 6.75 6.66 54.45 31.3270 12.74 12.16 69.41 42.8575 22.21 20.66 92.15 59.5480 37.83 34.11 121.88 82.3085 64.37 56.29 155.23 114.5190 110.76 96.34 216.61 159.92





Asset Valuation Method: A five year average of market values with write-up was used. This method takes intoaccount appreciation (depreciation) in investments in order to smooth asset values by averaging the excess ofthe actual over the expected income, on a market value basis, over a five-year period.





ValuationDate


AverageAnnual




7/1/11 41 $3,699,618 24 $1,442,965 522 $43,868,063 6.35% $84,038

7/1/10 47 4,424,782 24 1,659,228 505 41,250,479 7.22 81,684

7/1/09 38 3,502,225 21 1,605,240 482 38,472,184 7.91 79,818

7/1/08 38 3,186,664 24 1,700,472 465 35,650,855 5.20 76,669

7/1/07 27 2,361,097 13 790,746 451 33,889,262 7.52 75,142

7/1/06 31 2,403,476 20 980,106 437 31,517,980 6.89 72,124

* These values include beneficiaries in receipt but exclude deferred vested terminations.** The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.

SCHEDULE OF ACTIVE MEMBER VALUATION DATAValuation

DateNumber of

Active MembersAnnual

Compensation Average

Compensation % Increase(Decrease) in Average Compensation

7/1/11 406 $67,437,125 $166,101 0.01%

7/1/10 432 71,746,413 166,080 -0.077/1/09 422 70,133,372 166,193 5.177/1/08 425 67,159,516 158,022 5.367/1/07 421 63,144,685 149,987 5.607/1/06 440 62,492,250 142,028 0.00

ValuationDate



Benefits*



Contributions



Members (1) (2) (3)7/1/11 $18,353,365 $394,760,527 $172,586,895 $310,724,782 100.00% 74.06% 0.00%

7/1/10 17,967,938 354,390,110 182,182,355 329,030,387 100.00 87.77 0.00

7/1/09 17,288,107 364,446,307 212,308,961 355,522,646 100.00 92.81 0.00

7/1/08 16,312,046 336,317,176 200,655,425 383,958,713 100.00 100.00 15.61

7/1/07 15,917,212 319,653,218 189,399,900 391,321,939 100.00 100.00 29.44

7/1/06 15,033,550 297,797,512 180,946,945 382,849,386 100.00 100.00 38.70

*Actuarial value including receivable amounts.

SOLVENCY TEST





Valuation YearJuly 1, 2011

July 1, 2010

July 1, 2009

July 1, 2008

July 1,2007

July 1,2006

Effective Prior Year Contribution Rate 53.45%** 49.41%** 42.97%** 41.32%** 38.26%** 37.63%Net Change Due to:Current New Entrants 0.20 2.62 1.52 1.47 0.52 1.83Excess Salary Increases (1.37) (1.38) (0.15) (0.02) 0.09 (0.97)Assumption/Method Changes (3.87) 0.00 0.32 0.00 0.00 0.00COLA (0.19) (0.46) 0.29 (0.24) 0.25 0.10Retiree Mortality 0.04 (0.04) 0.01 0.05 0.18 0.11Active and Other Experience 6.37 (1.46) 0.02 (2.40) 0.71 (1.51)Investment Loss/(Gain) 1.37 1.43 2.03 0.70 0.16 0.76Net Effect of Chapter 115* N/A N/A N/A N/A N/A 0.00Appropriation Act# 4.43 2.94 2.40 2.09 1.15 0.92Chapter 78, P.L. 2011 N/A 0.40 N/A N/A N/A N/AActual Contribution Rate:• Prior to Reflecting

Chapter 1, P.L. 2010 60.43%** 53.46%** 49.41%** 42.97%** 41.32%** 38.87%• Reflecting Chapter 1, P.L. 2010 17.27%** 7.64%** N/A N/A N/A N/A

* Reflects reduction in normal cost contribution due to use of excess assets. Chapter 92, P.L. 2007 removed language from the existing legislationthat permits the State Treasurer to decrease the normal contribution needed to fund the System when excess assets are available.

** Excludes contribution rates of 1.34% for 2011, 1.34% for 2010, 1.23% for 2009, 1.65% for 2008, 1.14% for 2007 and 0.61% for 2006 for pre-miums payable to the Non-Contributory Group Insurance Premium Fund.

# Change in 2011 is due to the provisions of Chapter 1, P.L. 2010.


1. ELIGIBILITY FOR MEMBERSHIPChief Justice and associate justices of the SupremeCourt, judges of the Superior Court and tax courtsof the State of New Jersey.


Service: A year is credited for each year of serviceas a public employee in the State of New Jersey.Any service, for which member did not receiveannual salary of at least $500, shall be excluded.

Final Salary: Annual salary received by the mem-ber at the time of retirement or other terminationof service. (Effective June 30, 1996, Chapter 113,P.L. 1997 provided that the amount of compensa-tion used for employer and member contributionsand benefits under the program cannot exceed thecompensation limitation of Section 401(a)(17) ofthe Internal Revenue Code).

Accumulated Deductions: The sum of all amountsdeducted from the compensation of a member orcontributed by him or on his behalf.

Retirement Allowance: Pension derived from con-tributions of the State plus the annuity derivedfrom employee contributions.

3. BENEFITSService Retirement:

a. Mandatory retirement at age 70. Voluntaryretirement prior to age 70 as follows:

(1) Age 70 and 10 years of judicial service;

(2) Age 65 and 15 years of judicial service; or

(3) Age 60 and 20 years of judicial service.

Benefit is an annual retirement allowanceequal to 75% of final salary.

b. Age 65 while serving as a judge, 5 consecutiveyears of judicial service and 15 years in theaggregate of public service; or

Age 60 while serving as a judge, 5 consecutiveyears of judicial service and 20 years in theaggregate of public service.

Benefit is an annual retirement allowanceequal to 50% of final salary.

c. Age 60 while serving as a judge, 5 consecutiveyears of judicial service and 15 years in theaggregate to public service. Benefit is anannual retirement allowance equal to 2% offinal salary for each year of public service upto 25 years plus 1% of final salary for eachyear in excess of 25 years.

d. Age 60 while serving as a judge. Benefit is anannual retirement allowance equal to 2% offinal salary for each year of judicial service upto 25 years plus 1% for each year in excess of25 years.

Early Retirement: Prior to age 60 while serving asa judge, 5 consecutive years of judicial service and25 or more years in the aggregate of public serv-ice. Benefit is an annual retirement allowanceequal to 2% of final salary for each year of publicservice up to 25 years plus 1% of final salary foreach year of public service in excess of 25 years,actuarially reduced for commencement prior to age60.

Vested Termination: Termination of service priorto age 60, with 5 consecutive years of judicialservice and 10 years in the aggregate of publicservice. Benefit is a refund of accumulated deduc-tions, or a deferred life annuity beginning at age60 equal to 2% of final salary for each year of pub-lic service up to 25 years, plus 1% for service inexcess of 25 years.

Death Benefits:

BEFORE RETIREMENT: Death of an active member ofthe plan. Benefit is equal to:

a. Lump sum payment equal to 1-1/2 times finalsalary, plus

b. Spousal life annuity of 25% of final salarypayable until spouse’s remarriage plus 10%(15%) to one (two or more) dependent child(children). If there is no surviving spouse, orupon death or remarriage, a total of 15%(20%, 30%) of final salary payable to one(two, three or more) dependent child (chil-





dren). If there is no surviving spouse (ordependent children), 20% or 30% of finalsalary to one or two dependent parents.

AFTER RETIREMENT: Death of a retired member ofthe plan. Benefit is equal to:

a. Lump sum of 25% of final salary for a memberretired under normal or early retirement. If amember were receiving a disability benefit, alump sum 1-1/2 times final salary if deathoccurred before the member attained age 60and ¼ times final salary if death occurredafter age 60, plus

b. Spousal life annuity of 25% of final salarypayable until spouse’s remarriage plus 10%(15%) to one (two or more) dependent child(children). If there is no surviving spouse, or upon death or remarriage, a total of 15%(20%, 30%) of final salary payable to one(two, three or more) dependent child (chil-dren).

Disability Retirement: Physically or otherwiseincapacitated for a full and efficient service toState in his judicial capacity and such incapacityis likely to be permanent. Benefit is an annualretirement allowance of 75% of final salary.

4. MEMBER CONTRIBUTIONSAny member enrolled prior to January 1, 1996 con-tributes 3% of the difference between currentsalary and salary for that position on January 18,1982. Members enrolled on and after January 1,1996 contribute 3% of their full salary.

Chapter 78, P.L. 2011 increased MemberContributions by 9% of salary phased-in over aperiod of seven years beginning October 2011.(The additional 9% of salary will be fully phased-in in July 2017.)

(a) For members enrolled prior to January 1, 1996:

(1) Member Contributions of 9% (phased-inover a period of seven years beginningOctober 2011) of the salary for that posi-tion on January 18, 1982.

(2) Member Contributions increase from 3% to12% (phased-in over a period of sevenyears beginning October 2011) of the dif-ference between current salary and salaryfor that position on January 18, 1982.

(b) For members enrolled on or after January 1,1996, Member Contributions increase from 3%to 12% of full salary phased-in over a periodof seven years beginning October 2011.

However, on October 21, 2011, Judge Feinberg ofthe Superior Court, Law Division issued an Order inDePascale v. State declaring these pension contri-bution increases unconstitutional as applied toJustices of the Supreme Court and Judges of theSuperior Court who were appointed prior to June28, 2011, the effective date of Chapter 78, P.L.2011. The Order also enjoined implementation ofChapter 78, P.L. 2011 as it applies to theseJustices and Judges. The Order did not address theissue of Justices and Judges who were appointedafter the effective date of Chapter 78, P.L. 2011.The DePascale case is now on direct appeal to theState Supreme Court.





September 14, 2012

CommissionConsolidated Police and Firemen’s Pension Fund

of New Jersey



An actuarial valuation of the Consolidated Police and Firemen’s Pension Fund is performed annu-ally to measure the ongoing costs of the Fund and the progress towards the funding goals of theFund over time. Since the Pension Fund is closed to new entrants and there are no active par-ticipants, the financial goals of the Consolidated Police and Firemen’s Pension Fund are to ensurethat the combination of future State appropriations and current Trust assets, both projected for-ward with expected investment earnings, are sufficient to provide for all future benefit pay-ments.

The unfunded accrued liability for basic allowances was initially determined as of June 30, 1990and was to be amortized over a nine-year period. However, the provisions of Chapter 115, P.L.1997 of the Pension Security Legislation permitted the State to pay off the unfunded accruedliabilities from the proceeds of pension obligation bonds.

A contribution of $896,883 is recommended for the fiscal year beginning July 1, 2012. The nor-mal cost contribution is $0 and the unfunded accrued liability contribution is $896,883. Asnoted above, the latest unfunded accrued liability payment schedule required the amortizationof any plan gains or losses over the remainder of the nine-year period that began on June 30,1991. Without additional guidance, we have assumed the immediate payment of any unfundedaccrued liability. However, Chapter 1, P.L. 2010 allows the State Treasurer to reduce the fiscalyear 2013 recommended pension contribution to 2/7th of the recommended pension contribu-tion, which amounts to $256,252.

The recommended contribution for the fiscal year beginning July 1, 2012 was based on themethod described above using an interest rate of 2.00% per annum. The asset valuationmethod used was a five-year average of market values with write-up. This method takes intoaccount appreciation (depreciation) in investments in order to smooth asset values by averagingthe excess of the actual over the expected income, on a market value basis, over a five-yearperiod.


The valuation does not take into account any changes in U.S. equity prices and bond yields thathave occurred after the valuation date. Taking these into account may significantly change themarket and actuarial value of assets shown. The effect of these events on any funded ratiosshown, and on Fund calculations, is not known. The Fund’s funding and financial accountingrules generally prohibit reflection of changes in assets and underlying economic conditions thatoccur after the valuation date.


In our opinion, the attached schedules of valuation results fairly represent the status of the


Consolidated Police and Firemen’s Pension Fund and present an accurate view of historical data.The underlying assumptions and methods used for both funding and GASB disclosure purposesare consistent with the statutory specifications and represent a best estimate of the aggregatefuture experience of the Fund.





• Solvency Test

• Analysis of Past Financial ExperienceReconciliation of Unfunded Accrued Liability/(Surplus)



To the best of our knowledge, this information is complete and accurate. The valuation was per-formed by, and under the supervision of, independent qualified actuaries who are members of theAmerican Academy of Actuaries with experience in performing valuations for public retirement sys-tems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The calcula-tions are based on the current provisions of the Fund, and on actuarial assumptions that are indi-vidually and in the aggregate internally consistent and reasonable based on the actual experienceof the Fund.


Buck Consultants








Valuation Interest Rate: 2.00% per annum, compounded annually for development of costs.

Deaths After Retirement: Rates vary by age. Representative values of the assumed rates of mortality are as follows:

Age

Lives per 1,000Service

PensionersDisabilityPensioners Widows

50 6.2 12.8 2.255 9.9 17.4 3.360 15.6 24.5 5.565 23.9 35.7 9.670 30.3 53.2 16.575 49.1 80.2 32.480 81.5 121.1 56.185 126.3 182.0 89.2

Marriage: Males are assumed to be 4 years older than females, no assumption was made as to children.

For those participants with listed beneficiaries, the beneficiary allowance was assumed to be the greater of twicethe amount contained in the record or the minimum benefit of $4,500/yr. (The information contained in therecord has not been updated for the change from 25% to 50% payment to the survivor.)

For those participants without listed beneficiaries, 65% were assumed to be married and the beneficiary amountwas assumed to be the minimum benefit payable ($4,500/yr.).

Actuarial Method: The unfunded accrued liability was measured as of June 30, 1990 and the accrued liabilitycontribution rate was then determined such that the unfunded accrued liability was to be amortized over a peri-od of nine years with contributions expected to remain constant.

In determining the unfunded accrued liability and the contribution rate, the actuarial value of assets as of June30, 1990 was based upon 100% of the market value of fund assets. For subsequent actuarial valuations, the actu-arial value of assets is adjusted to reflect actual contributions and benefit payments, an assumed rate of returnon the previous years’ assets and current years’ cash flow at an annual rate of 2.00% with an adjustment to reflect20% of the difference between the resulting value and the actual market value of Fund assets.

In developing the unfunded accrued liability contribution rate as of June 30, 1991 and subsequent years, thecontribution rate is adjusted to amortize any gains or losses over the remainder of the nine-year period. (Withoutadditional guidance, we have assumed that the unfunded accrued liability determined as of June 30, 2011 willbe amortized over one year.)





ValuationDate

Added to Rolls Removed From Rolls Rolls at End of Year % Increase(Decrease)in AnnualAllowance

AverageAnnual




Allowance*

7/1/11 1 $6,861 87 $572,894 310 $2,149,554 (20.84)% $6,934

7/1/10 0 0 50 356,230 396 2,715,587 (11.60) 6,858

7/1/09 8 60,806 94 653,683 446 3,071,817 (16.18) 6,887

7/1/08 5 42,453 93 695,563 532 3,664,694 (15.13) 6,889

7/1/07 5 35,530 104 612,861 620 4,317,804 (11.79) 6,964

7/1/06 11 100,057 133 938,551 719 4,895,135 (14.62) 6,808

*The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.


There have been no active participants in the Fund since July 1, 1992.

ValuationDate



Benefits*

Percentage of Accrued Liabilities Covered by Net

Assets Available


Contributions



Members (1) (2) (3)7/1/11 $0 $9,179,981 $0 $8,300,684 N/A 90.42% N/A

7/1/10 0 11,824,904 0 10,632,228 N/A 89.91 N/A

7/1/09 0 14,024,132 0 13,879,949 N/A 98.97 N/A

7/1/08 0 17,319,488 0 16,962,382 N/A 97.94 N/A

7/1/07 0 21,090,186 0 19,858,423 N/A 94.16 N/A

7/1/06 0 24,749,667 0 24,237,730 N/A 97.93 N/A

*Actuarial value including receivable amount.

SOLVENCY TEST




ANALYSIS OF PAST FINANCIAL EXPERIENCERECONCILIATION OF UNFUNDED ACCRUED LIABILITY/(SURPLUS)


July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1, 2006

Prior Year Unfunded/(Surplus) $1,192,676 $144,183 $357,106 $1,231,763 $511,937 $1,748,924Net Change Due to:Interest in Prior Year

Unfunded/(Surplus) $23,854 $2,884 $7,142 $24,635 $10,239 $34,978Investment Loss/(Gain) 408,804 467,873 532,716 630,900 809,913 1,059,930Retiree Experience (572,247) 206,204 (388,781) (273,794) 421,850 (547,993)State Appropriations (173,790) 0 (364,000) (1,256,398) (522,176) (1,783,902)Appropriations Act N/A 371,532 N/A N/A N/A N/AAssumption, Benefit, or

Method Changes N/A N/A N/A N/A N/A N/AActual Unfunded/(Surplus) $879,297 $1,192,676 $144,183 $357,106 $1,231,763 $511,937


1. ELIGIBILITY FOR MEMBERSHIPMember of a municipal police department, munici-pal paid or part-paid fire department or countypolice department, or a paid or part-paid firedepartment of a fire district located in a townshipwho has contributed to this pension fund; and whois not covered by the Police and Firemen’sRetirement System which became effective on July1, 1944.Active Member: Any member who is a policeman,fireman, detective, lineman, driver of police van,fire alarm operator, or inspector of combustiblesand who is subject to call for active service assuch.Employee Member: Any member who is not subjectto active service or duty.

2. DEFINITIONSPlan Year: The 12-month period beginning on July1 and ending on June 30.Service: Service rendered while a member asdescribed above.Compensation: Base salary; not including individ-ual salary adjustments which are granted primarilyin anticipation of retirement or additional remu-neration for performing temporary duties beyondthe regular work day. (Effective June 30, 1996Chapter 113, P.L. 1997 provided that the amountof compensation used for employer and membercontributions and benefits under the program can-not exceed the compensation limitation of Section401(a)(17) of the Internal Revenue Code.)Final Compensation: Compensation received dur-ing the last 12 months of service preceding retire-ment or termination of service.Average Salary: Salary averaged over the lastthree years prior to retirement or other termina-tion of service.

3. BENEFITSService Retirement: Mandatory retirement at age65 with 25 years of service (a municipality mayretain the Chief of Police until age 70). Voluntaryretirement after 25 years of service for an active

member and after age 60 with 25 years of servicefor an employee member. Benefit is life annuityequal to 60% of final compensation, plus 1% offinal compensation for years of service in excess of25.

Death benefit:WHILE ON DUTY: Immediate life annuity equal to70% of average salary payable to the spouse. Ifthere is no spouse or if the spouse dies or remar-ries, 20% of final compensation will be payable toone surviving child and 35% (50%) of final com-pensation will be payable, to two (three) survivingchildren. If there is no surviving spouse or child,25% (40%) of final compensation will be payableto one (two) surviving dependent parent(s). Theminimum spousal annuity is $4,500 per annum.

WHILE NOT ON DUTY AFTER RETIREMENT: Lifeannuity equal to 50% of the member’s averagesalary payable to the spouse, plus 15% (25%) toone (two or more ) surviving child (children). Ifthere is no surviving spouse or if the survivingspouse dies or remarries, 20% (35%, 50%) of themember’s average salary to one (two, three ormore) surviving child (children). In the event thatthere is no surviving spouse or child, 25% (40%)of the member’s average salary will be payable toone (two) dependent parent(s). The minimumspousal annuity is $4,500 per annum.

Ordinary Disability Retirement: Totally and per-manently incapacitated from service for any causeother than as a direct result of a traumatic eventoccurring during the performance of duty. Benefitis an immediate life annuity equal to 1/2 of aver-age salary.

Accidental Disability Retirement: Totally and per-manently incapacitated as a direct result of a trau-matic event occurring while performing regular orassigned duties. Benefit is an immediate life annu-ity equal to 2/3 of average salary.





September 14, 2012

CommissionPrison Officers’ Pension Fund

of New Jersey



An actuarial valuation of the Prison Officers’ Pension Fund is performed annually to measure theongoing costs of the Fund and the progress towards the funding goals of the Fund over time.Since the pension fund is closed to new entrants and there are no active participants, the finan-cial goals of the Prison Officers’ Pension Fund are to ensure that the combination of future Stateappropriations and current Trust assets, both projected forward with expected investment earn-ings, are sufficient to provide for all future benefit payments.

The unfunded accrued liability for basic allowances was initially determined as of July 1, 1989and was to be amortized over the 14-year period beginning July 1, 1989 and ending on July 1,2002. However, the provisions of Chapter 115, P.L. 1997 of the Pension Security Legislation per-mitted the State to pay off the unfunded accrued liability from the proceeds of pension obliga-tion bonds. The net effect of this legislation and plan experience was that no contributions wererequired for the fiscal year beginning July 1, 2012. (There were no required unfunded accruedliability payments due to the fact that a net surplus existed as of July 1, 2011.)


The recommended contribution for the fiscal year beginning July 1, 2012 was based on themethod described above using an interest rate of 5.00%. Assets are valued at book value, whichis equivalent to market value.

The valuation does not take into account any changes in U.S. equity prices and bond yields thathave occurred after the valuation date. Taking these into account may significantly change themarket value of assets shown. The effect of these events on any funded ratios shown, and onFund calculations, is not known. The Fund’s funding and financial accounting rules generally pro-hibit reflection of changes in assets and underlying economic conditions that occur after the val-uation date.


In our opinion, the attached schedules of valuation results fairly represent the status of thePrison Officers’ Pension Fund and present an accurate view of historical data. The underlyingassumptions and methods used for both funding and GASB disclosure purposes are consistentwith the statutory specifications and represent a best estimate of the aggregate future experi-ence of the Fund.






• Solvency Test

• Analysis of Past Financial ExperienceReconciliation of Unfunded Accrued Liability/(Surplus)



To the best of our knowledge, this information is complete and accurate. The valuation was per-formed by, and under the supervision of, independent qualified actuaries who are members of theAmerican Academy of Actuaries with experience in performing valuations for public retirementsystems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The calcu-lations are based on the current provisions of the Fund, and on actuarial assumptions that areindividually and in the aggregate internally consistent and reasonable based on the actual expe-rience of the Fund.


Buck Consultants









Deaths After Retirement: Representative values of the assumed annual rates of mortality for current retirees areas follows:

AgeService

RetirementDisability

Retirement Widows40 0.21% 0.90% 0.56%45 0.34 1.10 0.6850 0.56 1.42 0.8755 0.90 1.93 1.1860 1.42 2.72 1.6765 2.17 3.97 2.4370 2.75 5.91 3.6375 4.46 8.91 5.5080 7.41 13.46 8.3985 11.48 20.22 12.80

Marriage: Husbands are assumed to be 3 years older than wives.

Valuation Method: The unfunded accrued liability (the difference between the present value of benefits and thevaluation assets) was determined as of July 1, 1988. This liability was amortized over the 14-year period begin-ning July 1, 1989, and ending on July 1, 2002. Each year the amortization payments were adjusted to reflectany experience gains or losses that occurred during the previous plan year. All gains and losses were amortizedover the remaining original amortization period. (Without any guidance, we have assumed that any unfundedaccrued liability that develops after the July 1, 2001 valuation will be amortized over 1 year.)

Asset Valuation Method: Assets are valued at book value, which is equivalent to market value.





ValuationDate

Added to Rolls Removed From Rolls Rolls at End of Year % Increase(Decrease)in AnnualAllowance

AverageAnnual




Allowance*

7/1/11 2 $11,391 9 $66,709 142 $993,290 (5.28)% $6,995

7/1/10 3 10,962 9 52,842 149 1,048,608 (3.84) 7,038

7/1/09 4 19,345 16 90,358 155 1,090,488 (6.11) 7,035

7/1/08 5 20,466 14 74,921 167 1,161,501 (4.48) 6,955

7/1/07 4 32,822 12 114,796 176 1,215,956 (6.32) 6,909

7/1/06 9 39,175 16 123,510 184 1,297,930 (6.10) 7,054

*The benefit amounts shown are the annualized benefits as of the valuation date and are not the actual benefits paid during the fiscal year.

SCHEDULE OF ACTIVE MEMBER VALUATION DATAThere have been no active participants in the Fund since July 1, 1994.

ValuationDate



Benefits*

Percentage of Accrued Liabilities Covered by Net

Assets Available


Contributions



Members (1) (2) (3)7/1/11 $0 $5,096,792 $0 $9,997,650 N/A 100.00% N/A

7/1/10 0 5,635,024 0 11,018,367 N/A 100.00 N/A

7/1/09 0 6,136,441 0 11,986,919 N/A 100.00 N/A

7/1/08 0 6,789,017 0 12,890,441 N/A 100.00 N/A

7/1/07 0 7,378,386 0 13,499,361 N/A 100.00 N/A

7/1/06 0 8,236,295 0 14,014,718 N/A 100.00 N/A

*Market value including receivable amount.

SOLVENCY TEST






July 1,2010

July 1,2009

July 1,2008

July 1,2007

July 1, 2006

Prior Year Unfunded/(Surplus) $(5,383,343) $(5,850,478) $(6,101,424) $(6,120,975) $(5,778,423) $(5,706,308)Net Change Due to:Interest in Prior Year

Unfunded/(Surplus) $(269,167) $(292,524) $(305,071) $(306,049) $(288,921) $(285,315)Investment Loss/(Gain) 492,481 520,553 419,571 97,600 (41,763) 174,081Retiree Experience 259,171 239,106 136,446 228,000 (11,868) 39,119Assumption/Method Changes N/A N/A N/A N/A N/A N/AActual Unfunded/(Surplus) $(4,900,858) $(5,383,343) $(5,850,478) $(6,101,424) $(6,120,975) $(5,778,423)


1. ELIGIBILITY FOR MEMBERSHIPEmployees of State penal institutions, employedprior to January 1, 1960 who did not transfer tothe Police & Firemen’s Retirement System in accor-dance with Chapter 205 of Public Law 1989. TheSystem no longer accepts new members.


Service: A year is credited for each year anemployee is a member of the retirement system.

Average Final Compensation (AFC): Averageannual compensation (or base salary) for 3 yearsof Service immediately preceding retirement.(Effective June 30, 1996, Chapter 113, P.L. 1997provided that the amount of compensation usedfor employer and member contributions and bene-fits under the program cannot exceed the compen-sation limitation of Section 401(a)(17) of theInternal Revenue Code.)

Accumulated Deductions: The sum (without inter-est) of all required amounts deducted from thecompensation of a member or contributed by himor on his behalf.

3. BENEFITSService Retirements: 25 years of service, or age 55and 20 years of service. The benefit is a life annu-ity equal to the greater of (a), (b), and (c) below:

a. 2% of AFC up to 30 years of service plus 1%for each year in excess of 30 and prior to age65;

b. 50% of final pay; and

c. For member with 25 years of service, 2% ofAFC up to 30 years of service plus 1% for eachyear in excess of 30.

Vested Retirements: Eligible upon termination ofemployment. Benefits are summarized as follows:

Termination with 10 or more years of service:Benefit is a deferred life annuity equal to 2% ofAFC for service up to 30 years plus 1% for serviceover 30 years.

Termination with less than 10 years of service:Refund of accumulated deductions.

Ordinary Disability Retirement: Permanent andtotal disability for causes other than as a directresult of a traumatic event occurring during theperformance of regular or assigned duties. Benefitis an immediate life annuity equal to 1/2 of AFC.

Accidental Disability Retirement: Permanent andtotal disabled as a direct result of a traumaticevent occurring while performing regular orassigned duties. Benefit is an immediate life annu-ity equal to 2/3 of AFC.

Death Benefits: Death of member of system.Spouse must be married to member prior to retire-ment, or at least five years before member’s death.Benefit is an annuity equal to 25% of member’sAFC plus an additional 15% (25%) for one (two ormore) surviving dependent child (children). Ifthere is no spouse or if the spouse dies or remar-ries, 20% (35%, 50%) of AFC to one (two, three ormore) surviving child (children). If there is no sur-viving spouse or children, 25% (40%) of AFC toone (two) dependent parent(s). The provision for asurvivor annuity payable to dependent parentsdoes not apply in the death of a retired member ofthe system.

Minimum benefits: Minimum spousal annuity is$1,600 per annum. If no other benefit is payableprior to retirement, the member’s beneficiary shallreceive the accumulated deductibles.





September 14, 2012

CouncilSupplemental Annuity Collective Trust

of New Jersey


Members of the Council:

An actuarial valuation of the Supplemental Annuity Collective Trust is performed at least once inevery three-year period to measure the ongoing costs of the Trust and the progress towards thefunding goals of the Trust over time. The financial goals of the Supplemental Annuity CollectiveTrust are to ensure that current Trust assets are sufficient to provide for all future annuity pay-ments. The most recent valuation was prepared as of June 30, 2009.

The Supplemental Annuity Collective Trust of New Jersey was established under the provisions ofChapter 123, P.L. 1963, which was approved July 1, 1963. The act permits active members ofthe following retirement systems administered by the State of New Jersey to make voluntary addi-tional contributions through their retirement systems to purchase either a variable or fixed annu-ity to supplement the benefits provided by their systems.

Public Employees’ Retirement SystemTeachers’ Pension and Annuity FundThe Police and Firemen’s Retirement SystemConsolidated Police and Firemen’s Pension FundPrison Officers’ Pension FundState Police Retirement SystemJudicial Retirement System

As of the July 1, 2009 valuation, only the variable annuity program was in operation. It wasinaugurated July 1, 1964. Chapter 123, P.L. 1963 was amended June 6, 1965 by Chapter 90, P.L.1965, to permit eligible employees to enter into an agreement with their employers to reducetheir salaries and purchase annuities on their behalf which will qualify for the tax sheltered treat-ment permitted under Section 403(b) of the Internal Revenue Code of 1954, as amended. Therules were revised in 1982 to permit contributions in the form of qualified voluntary employeecontributions. These contributions are treated as IRA contributions for tax purposes.


The Trust status as of the fiscal year beginning July 1, 2009 was based on the actuarial assump-tions and methods summarized on the following page. The mortality assumptions used for maleand female service retirements and dependents of active and retired members were not changedbased on the results of an investigation of mortality experience covering the period July 1, 2006to June 30, 2009. There were no changes in actuarial assumptions and methods since the pre-vious valuation.

The valuation does not take into account any changes in U.S. equity prices and bond yields thathave occurred after the valuation date. Taking these into account may significantly change themarket value of assets shown. The effect of these events on any Trust calculations is not known.Funding and financial accounting rules generally prohibit reflection of changes in assets and


underlying economic conditions that occur after the valuation date.

In our opinion, the attached schedules of valuation results fairly represent the status of theSupplemental Annuity Collective Trust and present an accurate view of historical data. The under-lying assumptions and methods used for the valuation are consistent with the statutory specifi-cations and represent a best estimate of the aggregate future experience of the Trust.

To the best of our knowledge, this information is complete and accurate. The valuation was per-formed by, and under the supervision of, independent qualified actuaries who are members of theAmerican Academy of Actuaries with experience in performing valuations for public retirementsystems.

The valuation was prepared in accordance with the principles of practice prescribed by theActuarial Standards Board and generally accepted actuarial procedures and methods. The calcu-lations are based on the current provisions of the Trust, and on actuarial assumptions that areindividually and in the aggregate internally consistent and reasonable based on the actual expe-rience of the Trust.


Buck Consultants








In valuing the liabilities of the Variable Benefit Account, an interest rate of 4% per year was used.

In addition, the valuation used the RP 2000 Combined Healthy Male (set back 5 years) and Female (set back 2years) Mortality Tables for service retirement and dependent beneficiaries. Special mortality tables were used forthe period after disability retirement. Illustrative rates of mortality used for valuation purposes are as follows:

Age

Rate per 1,000Service Retirement Disability

Male Female Male Female40 0.77 0.60 33.17 10.0245 1.08 0.94 34.91 11.1250 1.51 1.43 37.64 13.3755 2.14 2.21 41.98 16.9060 3.62 3.92 48.81 22.4965 6.75 7.65 59.52 31.2770 12.74 13.45 76.29 45.0275 22.21 22.97 102.24 66.4480 37.83 37.59 141.72 99.3885 64.37 62.51 200.93 149.2390 110.76 107.30 286.68 222.6295 183.41 170.43 403.95 326.18

Based on the results of an investigation of the mortality experience covering the period from July 1, 2006 toJune 30, 2009, the mortality tables used for male and female service retirements and beneficiaries active andretired members were not changed.





ValuationDate

Added to Rolls Removed from Rolls Rolls at End of Year% Increase (Decrease)in Annual Variable

Equity Units

Average Number of

Annual Variable

Equity UnitsNumber

Number ofAnnual Variable

Equity Units Number


Equity Units Number


Equity Units*6/30/09 36 3,512.0064 113 11,157.3420 526 48,530.4660 (13.61)% 92.26326/30/06 35 2,435.0580 100 9,824.2776 603 56,175.8016 (11.62) 93.16056/30/03 47 6,040.8276 118 10,755.7560 668 63,565.0212 (6.91) 95.15726/30/00 57 5,584.7820 122 10,275.5556 739 68,279.9496 (6.43) 92.39516/30/97 53 2,282.7816 108 5,385.3372 804 72,970.7232 (4.08) 90.7596

*The monthly number of variable equity units shown are the benefits of the valuation date and are not the actual benefits paid during the succeeding threefiscal years.

SCHEDULE OF ACTIVE MEMBER VALUATION DATA**

Valuation Date

Number ofActive Members

Equity Shares

Average Units

per Person

% Increase(Decrease) in Average

Equity Units6/30/09 3,317 1,961,173.8340 591.2493 11.41%6/30/06 3,576 1,897,693.2350 530.6748 9.096/30/03 3,910 1,902,053.0982 486.4586 (9.34)6/30/00 4,023 2,158,681.7328 536.5851 (21.74)6/30/97 3,907 2,678,839.2241 685.6512 (8.15)

**These values exclude suspended members.

SOLVENCY TEST

ValuationDate

Present Value of Benefits for

(4) Fund

Balances


(1) Aggregate

Contributions

(2) Current

Beneficiaries

(3)Active &Inactives (1) (2) (3)

6/30/09 $69,792,459 $18,294,318 $28,783,838 $120,414,735 100.00% 100.00% 100.00%6/30/06 61,417,327 30,688,847 70,384,314 159,612,705 100.00 100.00 95.916/30/03 52,666,675 26,582,925 48,099,954 127,186,109 100.00 100.00 99.666/30/00 45,026,249 46,341,126 124,548,634 216,985,359 100.00 100.00 100.006/30/97 40,015,582 36,811,600 98,695,306 176,280,772 100.00 100.00 100.00





Valuation Year July 1, 2009 July 1, 2006 July 1, 2003 July 1, 2000

Prior Valuation Deficit/(Surplus) $2,877,783 $163,445 $(1,069,350) $(758,284)Net Change Due to:Retiree Experience (6,421,903) 1,128,887 1,232,795 1,919,537Assumption/Method Changes N/A 1,585,451 N/A (2,230,603)Current Valuation Deficit/(Surplus) $(3,544,120) $2,877,783 $163,445 $(1,069,350)


A summary of the benefit and contribution provisions ofthe Trust in effect on the valuation date is presented inthe following digest. Participants’ accounts are expressedin terms of equity units. The value of an equity unit wasinitially set at $10. The dollar value of the unit is com-puted at the end of each month. It varies as a result ofmortality experience and gains and losses and dividendearnings on the Variable Division’s investments.

1. ELIGIBILITYMember of a State-administered retirement systemmay become a participant upon filing an applica-tion for enrollment.

2. PARTICIPANT ACCOUNTSAlthough contributions are permitted in eitherfixed or variable accounts, only the variable sys-tem is currently in place.

(a) Three optional participant accounts:

(1) Variable annuity account.

(2) Tax sheltered annuity account under Section403(b) of the Internal Revenue Code.

(3) Qualified voluntary employee contributionaccount (QVEC) – eliminated January 1,1987.

(b) Value of Account: The total number of equityunits in force in the variable account at theend of each month shall be determined as fol-lows:

(1) The number of equity units in force at thestart of the month; plus

(2) The number of equity units credited as ofthe first of the month for participant’scontributions received during the preced-ing quarter, if any; less

(3) The number of equity units paid out in thecurrent month on account of terminationsfor death or withdrawal during the preced-ing month; less

(4) The number of equity units transferred asof the first of the month for retirementduring the preceding month; plus

(5) One third of one percent of the balance soobtained.

3. BENEFITSRetirement: Upon retirement a participant is paida life annuity which is the fixed number of variableequity units per month computed as the actuarialequivalent of the number of equity units in hisaccount at the close of the month of retirement,multiplied by the value of each unit as of the endof the quarter preceding the month of payment.

At retirement the participant may elect in lieu ofthe variable life annuity either (1) a single cashpayment, or (2) an equivalent reduced annuitywith the provision that:

(a) In case of death prior to 5 years from theeffective date of the annuity, the annuity willbe continued to his designated beneficiary forthe remainder of the 5-year period, or

(b) In case of death prior to 10 years from theeffective date of the annuity, the annuity willbe continued to his designated beneficiary forthe remainder of the 10-year period, or

(c) At the death of the participant, his variableannuity will be continued throughout the lifeof such other person as the participant shallhave designated at the time of retirement, or

(d) At the death of the participant, one-half of hisvariable annuity will be continued throughoutthe life of such other person as the participantshall have designated at the time of retire-ment.

In the event the value of the participant’s accountat retirement results in an annuity with initialmonthly payments of less than $10, the benefitshall be paid in a single cash payment.

Death Before Retirement: If a participant diesbefore retirement, a lump sum payment equal tothe value of his account on the last day of themonth of his death is paid to his designated ben-eficiary or to his estate. If the beneficiary is a nat-ural person, he may elect, in lieu of a lump sumpayment, an annuity under any of the methods ofsettlement available to a retirant.





Withdrawal: Withdrawal is permitted only if mem-bership in the basic State administered retirementsystem is terminated. However, the Council mayterminate an inactive account if the value of theaccount is less than $100. The amount paid onwithdrawal is the value of the participant’saccount as of the end of the month of termination.

4. CONTRIBUTIONSParticipants: Each participant contributes throughpayroll deductions integral dollar amounts not inexcess of 10% of his salary. He may also makelump sum contributions by direct payments in

integral dollar amounts of not less than $50, pro-vided that total contributions for any one year maynot exceed 10% of his annual salary.

Employers: Employers may contribute, on behalf ofeligible employees who agree to a salary reductionequivalent to the amount of the contribution, evendollar amounts which shall be from 1% to 10% ofbase salary.

The amounts by which the employee’s salary isreduced must be within the exclusion allowanceprovided under Section 403(b) of the InternalRevenue Code.




STATISTICAL SECTION


STATISTICAL INFORMATIONST

ATE

OF N

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Num

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39,1

9783

,433

78,1

4024

,870

2,18

136

323

3522

8,24

2An

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Allo

wan

ce$9

87,3

23,3

93$1

,310

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,752

$3,0

90,5

49,3

45$1

,402

,296

,293

$129

,127

,114

$35,

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480

$334

,276

$512

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5,18

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5,70

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9,20

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9,08

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4,53

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4,64

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8

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Num

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4,31

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355

2,62

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127

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417

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$80,

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$116

,333

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$67,

285,

696

$74,

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$4,2

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$6,7

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9,93

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$11,

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918

$15,

728,

028

$9,3

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,228

—$5

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$19,

649

$144

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Annu

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$26,

521

$25,

409

$40,

539

$44,

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$52,

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$9,8

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Num

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2269

354

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1951

1279

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Allo

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23,0

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$42,

073

$19,

072,

459

$2,5

50,4

07$6

23,0

44$2

67,4

07$4

1,99

4$2

4,07

4,93

5Av

erag

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nual

Allo

wan

ce$1

4,68

2$1

6,73

3$1

4,02

4$3

4,86

7$3

8,06

6$3

2,79

2$5

,243

$3,5

00$3

0,47

5

RETI

RED

MEM

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629

9,01

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914

7,55

231

313

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2,81

1$9

8,42

3,61

5$1

18,1

78,0

85$1

60,3

90,1

21$1

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4,62

6$6

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$1,5

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92,0

40$4

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4,93

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0,91

3$2

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7$4

7,65

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$7,4

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$900

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—$9

3,69

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$13,

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$16,

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Note

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nd B

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Adde

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olls

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Act

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rage

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for

the

last

fiv

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yea

rs.


STATISTICAL INFORMATION


SCHEDULE OF REVENUES BY SOURCE

(based on Comprehensive Annual Financial Reports for relevant years)

PERCENTAGEOF ANNUAL INVESTMENT

FISCAL MEMBER EMPLOYER COVERED AND OTHERYEAR CONTRIBUTIONS CONTRIBUTIONS COMPENSATION REVENUES TOTAL

PUBLIC EMPLOYEES’ 2003 354,900,256 70,822,302 0.78 717,963,666 1,143,686,224RETIREMENT SYSTEM 2004 374,864,048 774,456,965 8.25 2,778,643,257 3,927,964,270

2005 533,862,353 410,736,970 4.15 1,928,822,241 2,873,421,5642006 630,322,617 322,487,907* 5.11 2,338,531,507 3,291,342,0312007 654,493,521 674,629,437 6.14 3,810,965,382 5,140,088,3402008 705,903,439 812,356,103 7.11 (391,708,689) 1,126,550,8532009 741,911,166 774,672,945 6.56 (3,787,350,299) (2,270,766,188)2010 743,486,792 919,999,429 7.67 2,696,305,650 4,359,791,8712011 728,602,461 925,626,097 7.73 3,813,641,343 5,467,869,9012012 793,993,077 997,437,885 8.59 628,573,598 2,420,004,560

TEACHERS’ PENSION 2003 303,570,787 301,344,033 4.10 787,190,897 1,392,105,717AND ANNUITY FUND 2004 405,695,555 456,411,646 5.93 3,652,597,813 4,514,705,014

2005 488,861,870 550,722,913 6.84 2,471,563,713 3,511,148,4962006 507,106,612 101,327,375* 7.77 2,980,823,472 3,589,257,4592007 523,997,776 693,759,318 7.93 4,874,924,850 6,092,681,9442008 585,800,133 701,584,600 7.73 (766,377,094) 521,007,6392009 616,222,799 102,472,305 1.09 (5,071,848,719) (4,353,153,615)2010 615,862,621 42,850,384 0.44 3,277,424,465 3,936,137,4702011 593,587,972 36,117,717 0.36 4,364,388,191 4,994,093,8802012 685,608,357 323,100,685 3.34 640,982,289 1,649,691,331

POLICE AND FIREMEN’S 2003 252,281,888 (79,875,166) (2.96) 430,240,420 602,647,142RETIREMENT SYSTEM 2004 263,173,065 264,164,091 9.30 1,943,638,309 2,470,975,465

2005 276,195,076 473,227,921 15.91 1,383,396,386 2,132,819,3832006 290,681,716 714,210,999 23.03 1,675,380,936 2,680,273,6512007 307,335,360 825,687,477 25.18 2,777,158,696 3,910,181,5332008 310,259,367 886,871,720 25.63 (339,212,149) 857,918,9382009 326,491,066 913,302,011 23.40 (2,735,834,439) (1,496,041,362)2010 330,951,798 1,001,223,223 27.25 2,008,239,281 3,340,414,3022011 327,357,244 (216,914,092) (5.83) 3,071,480,855 3,181,924,0072012 374,688,168 842,084,854 23.07 371,496,172 1,588,269,194

STATE POLICE 2003 14,198,794 193,099 0.09 48,430,409 62,822,302RETIREMENT SYSTEM 2004 14,682,524 45,339 0.02 216,209,057 230,936,920

2005 15,450,745 437,652 0.20 140,386,795 156,275,1922006 16,917,317 13,015,093 5.38 173,767,121 203,699,5312007 17,861,043 29,285,276 11.13 291,531,439 338,677,7582008 18,306,246 36,506,782 13.26 (34,109,753) 20,703,2752009 18,652,049 5,644,059 2.01 (298,475,097) (274,178,989)2010 18,825,131 1,235,580 0.43 214,479,134 234,539,8452011 18,164,837 2,208,340 0.76 280,447,557 300,820,7342012 23,233,207 13,578,328 4.93 48,915,745 85,727,280

* Restated due to the implementation of GASB Statement No. 43 (Other Post-Employment Benefits)




SCHEDULE OF REVENUES BY SOURCE


PERCENTAGEOF ANNUAL INVESTMENT

FISCAL MEMBER EMPLOYER COVERED AND OTHERYEAR CONTRIBUTIONS CONTRIBUTIONS COMPENSATION REVENUES TOTAL

JUDICIAL 2003 2,578,620 9,065,435 14.65 7,700,448 19,344,503RETIREMENT SYSTEM 2004 1,795,721 5,084,315 8.25 43,476,173 50,356,209

2005 1,480,942 6,162,076 10.01 26,763,410 34,406,4282006 1,583,469 7,972,000 13.18 32,475,105 42,030,5742007 2,201,527 12,741,898 20.39 52,215,397 67,158,8222008 1,825,726 12,913,986 20.45 (1,268,945) 13,470,7672009 3,032,945 1,696,891 2.53 (56,230,261) (51,500,425)2010 3,054,881 2,308,854 3.29 37,131,556 42,495,2912011 2,575,318 1,693,412 2.36 42,358,462 46,627,1922012 2,476,205 6,061,953 8.99 4,954,214 13,492,372

CONSOLIDATED 2003 — 2,776,011 — 11,424,375 14,200,386POLICE AND FIREMEN’S 2004 — 2,000,402 — 10,206,935 12,207,337PENSION FUND 2005 — 7,074,835 — 9,368,766 16,443,601

2006 — 6,450,118 — 8,637,363 15,087,4812007 — 1,809,773 — 7,974,527 9,784,3002008 — 550,881 — 6,953,657 7,504,5382009 — 1,276,151 — 5,784,074 7,060,2252010 — 13,236 — 4,865,684 4,878,9202011 — 8,199 — 4,050,513 4,058,7122012 — 193,183 — 3,234,795 3,427,978

PRISON OFFICERS’ 2003 — — — 2,223,922 2,223,922PENSION FUND 2004 — — — 1,363,329 1,363,329

2005 — — — 1,544,971 1,544,9712006 — — — 1,682,105 1,682,1052007 — — — 1,850,323 1,850,3232008 — — — 1,650,523 1,650,5232009 — — — 1,286,442 1,286,4422010 — — — 1,100,162 1,100,1622011 — — — 1,096,674 1,096,6742012 — — — 1,004,312 1,004,312

PENSION TRUST 2003 927,530,345 304,325,714 1.57 2,005,174,137 3,237,030,196FUNDS TOTAL 2004 1,060,210,913 1,502,162,758 7.43 8,646,134,873 11,208,508,544

2005 1,615,850,986 1,448,362,367 6.83 5,961,846,282 9,026,059,6352006 1,446,611,731 1,165,463,492* 8.67 7,211,297,609 9,823,372,8322007 1,505,889,227 2,237,913,179 9.59 11,816,620,614 15,560,423,0202008 1,622,094,911 2,450,784,072 10.09 (1,524,072,450) 2,548,806,5332009 1,706,310,025 1,799,064,362 7.14 (11,942,668,299) (8,437,293,911)2010 1,712,181,223 1,967,630,706 7.63 8,239,545,932 11,919,357,8612011 1,670,287,832 748,739,673 2.87 11,577,463,595 13,996,491,1002012 1,879,999,014 2,182,456,888 8.63 1,699,161,125 5,761,617,027





SCHEDULE OF EXPENSES BY TYPE


WITHDRAWALS, TRANSFERSBENEFITS ADMINISTRATIVE TO OTHER

FISCAL AND OTHER RETIREMENTYEAR RETIREMENT OTHER EXPENSES SYSTEMS TOTAL

PUBLIC EMPLOYEES’ 2003 1,256,269,524 391,337,785 73,681,006 13,153,810 1,734,442,125RETIREMENT SYSTEM 2004 1,342,672,462 429,133,774 69,093,929 15,202,812 1,856,102,977

2005 1,430,518,096 469,353,256 77,859,834 13,229,171 1,990,960,3572006 1,527,004,088 282,372,610* 67,232,871 20,404,379 1,897,013,9482007 1,649,495,269 327,539,477 87,186,633 9,665,453 2,073,886,8322008 1,782,422,238 366,958,834 100,212,670 15,047,572 2,264,641,3142009 1,936,521,198 370,573,294 97,943,420 18,340,013 2,423,377,9252010 2,058,292,073 396,434,652 99,779,660 15,384,771 2,569,891,1562011 2,273,677,650 398,645,486 121,899,183 11,926,661 2,806,148,9802012 2,510,170,979 390,368,925 118,918,227 11,541,759 3,030,999,890

TEACHERS’ PENSION 2003 1,477,951,606 587,364,087 33,649,450 2,114,920 2,101,080,063AND ANNUITY FUND 2004 1,615,493,787 690,695,012 34,115,575 3,411,106 2,343,715,480

2005 1,778,364,298 777,410,393 40,688,935 2,603,363 2,599,066,9892006 1,943,588,309 297,294,133* 40,311,056 3,289,349 2,284,482,8472007 2,117,640,036 335,912,944 45,808,681 3,044,379 2,502,406,0402008 2,295,924,794 381,757,919 50,298,222 4,205,762 2,732,186,6972009 2,453,071,751 416,493,789 49,886,243 4,057,851 2,923,509,6342010 2,573,053,407 455,140,026 51,867,458 2,401,574 3,082,462,4652011 2,897,547,945 445,910,746 52,090,871 4,842,890 3,400,392,4522012 3,089,098,664 449,518,827 49,554,835 2,880,016 3,591,052,342

POLICE AND FIREMEN’S 2003 766,321,314 150,561,160 10,428,854 424,583 927,735,911RETIREMENT SYSTEM 2004 828,110,553 158,945,146 9,998,813 680,232 997,734,724

2005 899,263,678 165,199,575 10,978,333 594,778 1,076,036,3642006 969,680,617 183,810,179 11,037,817 537,733 1,165,066,3462007 1,047,270,962 206,072,605 11,549,909 491,009 1,265,384,4852008 1,129,947,758 223,161,242 13,181,196 394,592 1,366,684,7882009 1,216,141,979 247,278,432 12,295,214 531,253 1,476,246,8782010 1,310,546,315 262,964,540 11,318,702 376,544 1,585,206,1012011 1,454,083,372 267,469,347 11,583,365 237,855 1,733,373,9392012 1,593,941,123 268,460,489 11,117,174 353,727 1,873,872,513

STATE POLICE 2003 67,100,468 14,971,851 306,511 5,856 82,384,686RETIREMENT SYSTEM 2004 74,612,608 14,659,455 307,349 11,477 89,590,889

2005 83,114,429 15,755,321 536,941 32,016 99,438,7072006 87,425,434 17,512,726 478,723 — 105,416,8832007 92,445,253 18,467,646 707,974 — 111,620,8732008 99,990,185 21,447,892 728,121 — 122,166,1982009 107,778,693 24,196,051 743,849 — 132,718,5932010 114,055,702 24,466,800 722,827 — 139,245,3292011 122,990,229 25,942,676 454,558 — 149,387,4632012 138,282,207 24,783,162 442,277 4 163,507,650





SCHEDULE OF EXPENSES BY TYPE


WITHDRAWALS, TRANSFERSBENEFITS ADMINISTRATIVE TO OTHER

FISCAL AND OTHER RETIREMENTYEAR RETIREMENT OTHER EXPENSES SYSTEMS TOTAL

JUDICIAL 2003 22,512,788 3,038,212 171,486 — 25,722,486RETIREMENT SYSTEM 2004 23,787,469 3,276,925 309,713 — 27,374,107

2005 25,775,961 3,242,394 169,357 — 29,187,7122006 27,411,244 3,726,355 199,592 — 31,337,1912007 29,173,626 3,767,566 159,340 — 33,100,5322008 30,653,458 4,949,502 222,565 — 35,825,5252009 32,742,280 4,922,727 202,022 — 37,867,0292010 35,634,276 5,598,235 367,124 — 41,599,6352011 38,075,562 5,122,471 248,783 — 43,446,8162012 41,022,857 4,932,689 205,529 — 46,161,075

CONSOLIDATED 2003 18,664,638 — 49,980 — 18,714,618POLICE AND FIREMEN’S 2004 16,829,838 — 28,831 — 16,858,669PENSION FUND 2005 15,137,682 — 54,494 — 15,192,176

2006 13,478,301 — 25,777 — 13,504,0782007 11,873,928 — 27,883 — 11,901,8112008 10,398,599 — 20,152 — 10,418,7512009 8,844,291 — 13,234 — 8,857,5252010 7,495,068 — 8,200 — 7,503,2682011 6,308,585 — 19,182 — 6,327,7672012 5,046,645 — 14,152 — 5,060,797

PRISON OFFICERS’ 2003 2,843,716 — 10,705 — 2,854,421PENSION FUND 2004 2,750,556 — 6,298 — 2,756,854

2005 2,631,732 — 14,202 — 2,645,9342006 2,443,222 — 7,630 — 2,450,8522007 2,356,383 — 9,297 — 2,365,6802008 2,250,040 — 9,403 — 2,259,4432009 2,181,622 — 8,341 — 2,189,9632010 2,063,123 — 5,591 — 2,068,7142011 2,110,016 — 7,376 — 2,117,3922012 1,950,804 — 6,922 — 1,957,726

PENSION TRUST 2003 3,611,664,054 1,147,273,095 118,297,992 15,699,169 4,892,934,310FUNDS TOTAL 2004 3,904,257,253 1,296,710,312 113,860,508 19,305,627 5,334,133,700

2005 4,234,805,876 1,430,960,939 130,302,096 16,459,328 5,812,528,2392006 4,571,031,215 784,716,003* 119,293,466 24,231,461 5,499,272,1452007 4,950,255,457 891,760,238 145,449,717 13,200,841 6,000,666,2532008 5,351,587,072 998,275,389 164,672,329 19,647,926 6,534,182,7162009 5,757,281,814 1,063,464,293 161,092,323 22,929,117 7,004,767,5472010 6,101,139,964 1,144,604,253 164,069,562 18,162,889 7,427,976,6682011 6,794,793,359 1,143,090,726 186,303,318 17,007,406 8,141,194,8092012 7,379,513,279 1,138,064,092 180,259,116 14,775,506 8,712,611,993





SCHEDULE OF CHANGES IN NET ASSETS


NET ASSETS

FISCAL NET BEGINNING END YEAR ADDITIONS DEDUCTIONS CHANGE OF YEAR OF YEAR

PUBLIC EMPLOYEES' 2003 1,143,686,224 1,734,442,126 (590,755,902) 21,552,247,016 20,961,491,114 RETIREMENT SYSTEM 2004 3,927,964,270 1,856,102,977 2,071,861,293 20,961,491,114 23,033,352,407

2005 2,873,421,564 1,990,960,356 882,461,208 23,033,352,407 23,915,813,615 2006 3,291,342,031* 1,897,013,948* 1,394,328,083 23,914,516,673* 25,308,844,756 2007 5,140,088,340 2,073,886,832 3,066,201,508 25,308,844,756 28,375,046,264 2008 1,126,550,853 2,264,641,314 (1,138,090,461) 28,375,046,264 27,236,955,803 2009 (2,270,766,187) 2,423,377,925 (4,694,144,112) 27,236,955,803 22,542,811,691 2010 4,359,791,871 2,569,891,156 1,789,900,715 22,542,811,691 24,332,712,406 2011 5,467,869,901 2,806,148,979 2,661,720,922 24,332,712,406 26,994,433,328 2012 2,420,004,560 3,030,999,890 (610,995,330) 26,994,433,328 26,383,437,998

TEACHERS' PENSION 2003 1,392,105,717 2,101,080,062 (708,974,345) 27,258,134,841 26,549,160,496 AND ANNUITY FUND 2004 4,514,705,014 2,343,715,480 2,170,989,534 26,549,160,496 28,720,150,030

2005 3,511,148,496 2,599,066,990 912,081,506 28,720,150,030 29,632,231,536 2006 3,589,257,459* 2,284,482,847* 1,304,774,612 29,631,612,619* 30,936,387,231 2007 6,092,681,944 2,502,406,040 3,590,275,904 30,936,387,231 34,526,663,135 2008 521,007,639 2,732,186,697 (2,211,179,058) 34,526,663,135 32,315,484,077 2009 (4,353,153,615) 2,923,509,634 (7,276,663,249) 32,315,484,077 25,038,820,828 2010 3,936,137,470 3,082,462,465 853,675,005 25,038,820,828 25,892,495,833 2011 4,994,093,881 3,400,392,453 1,593,701,428 25,892,495,833 27,486,197,261 2012 1,649,691,331 3,591,052,342 (1,941,361,011) 27,486,197,261 25,544,836,250

POLICE AND FIREMEN'S 2003 602,647,142 927,735,911 (325,088,769) 15,205,044,360 14,879,955,591 RETIREMENT SYSTEM 2004 2,470,975,465 997,734,724 1,473,240,741 14,879,955,591 16,353,196,332

2005 2,132,819,383 1,076,036,364 1,056,783,019 16,353,196,332 17,409,979,351 2006 2,680,273,651 1,165,066,345 1,515,207,306 17,409,979,351 18,925,186,657 2007 3,910,181,533 1,265,384,485 2,644,797,048 18,925,186,657 21,569,983,705 2008 857,918,938 1,366,684,788 (508,765,850) 21,569,983,705 21,061,217,855 2009 (1,496,041,362) 1,476,246,878 (2,972,288,240) 21,061,217,855 18,088,929,615 2010 3,340,414,302 1,585,206,101 1,755,208,201 18,088,929,615 19,844,137,816 2011 3,181,924,007 1,733,373,939 1,448,550,068 19,844,137,816 21,292,687,884 2012 1,588,269,194 1,873,872,513 (285,603,319) 21,292,687,884 21,007,084,565

STATE POLICE 2003 62,822,302 82,384,686 (19,562,384) 1,565,301,249 1,545,738,865 RETIREMENT SYSTEM 2004 230,936,920 89,590,889 141,346,031 1,545,738,865 1,687,084,896

2005 156,275,192 99,438,707 56,836,485 1,687,084,896 1,743,921,381 2006 203,699,531 105,416,883 98,282,648 1,743,921,381 1,842,204,029 2007 338,677,758 111,620,873 227,056,885 1,842,204,029 2,069,260,914 2008 20,703,275 122,166,199 (101,462,924) 2,069,260,914 1,967,797,990 2009 (274,178,989) 132,718,593 (406,897,582) 1,967,797,990 1,560,900,408 2010 234,539,845 139,245,329 95,294,516 1,560,900,408 1,656,194,924 2011 300,820,734 149,387,463 151,433,271 1,656,194,924 1,807,628,195 2012 85,727,280 163,507,650 (77,780,370) 1,807,628,195 1,729,847,825





SCHEDULE OF CHANGES IN NET ASSETS


NET ASSETS

FISCAL NET BEGINNING END YEAR ADDITIONS DEDUCTIONS CHANGE OF YEAR OF YEAR

JUDICIAL 2003 19,344,503 25,722,485 (6,377,982) 305,776,040 299,398,058 RETIREMENT SYSTEM 2004 50,356,209 27,374,107 22,982,102 299,398,058 322,380,160

2005 34,406,428 29,187,712 5,218,716 322,380,160 327,598,876 2006 42,030,574 31,337,192 10,693,382 327,598,876 338,292,258 2007 67,158,822 33,100,532 34,058,290 338,292,258 372,350,548 2008 13,470,767 35,825,525 (22,354,758) 372,350,548 349,995,790 2009 (51,500,425) 37,867,029 (89,367,454) 349,995,790 260,628,336 2010 42,495,291 41,599,635 895,656 260,628,336 261,523,992 2011 46,627,192 43,446,816 3,180,376 261,523,992 264,704,368 2012 13,492,372 46,161,075 (32,668,703) 264,704,368 232,035,665

CONSOLIDATED 2003 14,200,386 18,714,618 (4,514,232) 24,544,842 20,030,610 POLICE AND FIREMEN’S 2004 12,207,337 16,858,669 (4,651,332) 20,030,610 15,379,278 PENSION FUND 2005 16,443,601 15,192,176 1,251,425 15,379,278 16,630,703

2006 15,087,481 13,504,078 1,583,403 16,630,703 18,214,106 2007 9,784,300 11,901,811 (2,117,511) 18,214,106 16,096,595 2008 7,504,538 10,418,750 (2,914,212) 16,096,595 13,182,383 2009 7,060,225 8,857,525 (1,797,300) 13,182,383 11,385,083 2010 4,878,920 7,503,268 (2,624,348) 11,385,083 8,760,735 2011 4,058,712 6,327,768 (2,269,056) 8,760,735 6,491,679 2012 3,427,978 5,060,797 (1,632,819) 6,491,679 4,858,860

PRISON OFFICERS' 2003 2,223,922 2,854,421 (630,499) 17,908,452 17,277,953 PENSION FUND 2004 1,363,329 2,756,854 (1,393,525) 17,277,953 15,884,428

2005 1,544,971 2,645,934 (1,100,963) 15,884,428 14,783,465 2006 1,682,105 2,450,852 (768,747) 14,783,465 14,014,718 2007 1,850,323 2,365,680 (515,357) 14,014,718 13,499,361 2008 1,650,523 2,259,443 (608,920) 13,499,361 12,890,441 2009 1,286,442 2,189,963 (903,521) 12,890,441 11,986,920 2010 1,100,162 2,068,714 (968,552) 11,986,920 11,018,368 2011 1,096,674 2,117,392 (1,020,718) 11,018,368 9,997,650 2012 1,004,312 1,957,726 (953,414) 9,997,650 9,044,236

PENSION TRUST 2003 3,237,030,196 4,892,934,309 (1,655,904,113) 65,928,956,800 64,273,052,687 FUNDS TOTAL 2004 11,208,508,544 5,334,133,700 5,874,374,844 64,273,052,687 70,147,427,531

2005 8,726,059,635 5,812,528,239 2,913,531,396 70,147,427,531 73,060,958,927 2006 9,823,372,832* 5,499,272,145* 4,324,100,687 73,059,043,068* 77,383,143,755 2007 15,560,423,020 6,000,666,253 9,559,756,767 77,383,143,755 86,942,900,522 2008 2,548,806,533 6,534,182,716 (3,985,376,183) 86,942,900,522 82,957,524,339 2009 (8,437,293,911) 7,004,767,547 (15,442,061,458) 82,957,524,339 67,515,462,881 2010 11,919,357,861 7,427,976,668 4,491,381,193 67,515,462,881 72,006,844,074 2011 13,996,491,101 8,141,194,810 5,855,296,291 72,006,844,074 77,862,140,365 2012 5,761,617,027 8,712,611,993 (2,950,994,966) 77,862,140,365 74,911,145,399




ATLANTIC COUNTY (*)BERGEN COUNTY BURLINGTON COUNTY/PAYROLL DEPT CAMDEN CO BOARD OF CHOSEN FREE-HOLDERS CAPE MAY COUNTY CUMBERLAND COUNTY ESSEX COUNTY GLOUCESTER COUNTY HUDSON COUNTY (*)HUNTERDON COUNTY MERCER COUNTY (*)MIDDLESEX COUNTY MONMOUTH COUNTY/HALL OF RECORDS MORRIS COUNTY OCEAN COUNTY (*)PASSAIC COUNTY SALEM COUNTY (*)SOMERSET COUNTY FINANCE OFFICE SUSSEX COUNTY UNION COUNTY WARREN CO BD OF CHOSEN FREEHOLDERS

ATLANTIC COUNTY WELFARE BOARD (*)BERGEN CO BOARD OF SOCIAL SERVICES BURLINGTON CO BD OF SOC SERVICES (*)CAMDEN CO BD OF SOCIAL SERVICES (*)CAPE MAY CO BOARD SOCIAL SERVICES CUMBERLAND CO BD SOCIAL SERVICES (*)GLOUCESTER CO BD OF SOCIAL SERVICES HUNTERDON CO BOARD SOCIAL SERVICES MERCER CO BOARD OF SOCIAL SERVICE (*)MIDDLESEX CO BD OF SOCIAL SERVICES MONMOUTH CO DIV OF SOCIAL SERVICES OCEAN CO BOARD OF SOCIAL SERVICES (*)PASSAIC CO BOARD OF SOCIAL SERVICES SALEM CO BOARD OF SOCIAL SERVICES (*)SOMERSET CO BD OF SOCIAL SERVICES (*)UNION CO BOARD OF SOCIAL SERVICES

NJ ASSOC OF COUNTIES (*)NJ SCHOOL BOARDS ASSOCIATION (*)NJ STATE LEAGUE OF MUNICIPALITIES (*)

COMM WORKERS OF AMERICA # 1034 COMM WORKERS OF AMERICA #1037 COMM WORKERS OF AMERICA # 1033

ABERDEEN TOWNSHIP ABSECON CITY (*)ALEXANDRIA TOWNSHIP (*)ALLAMUCHY TOWNSHIP (*)ALLENDALE BOROUGH ALLENHURST BOROUGH (*)ALLENTOWN BOROUGH ALLOWAY TOWNSHIP ALPHA BOROUGH (*)ALPINE BOROUGH ANDOVER BOROUGH ANDOVER TOWNSHIP (*)

ASBURY PARK CITY ATLANTIC CITY ATLANTIC HIGHLANDS (*)AUDUBON BOROUGH (*)AUDUBON PARK BOROUGH (*)AVALON BOROUGH AVON BY THE SEA BARNEGAT LIGHT BOROUGH (*)BARNEGAT TOWNSHIP BARRINGTON BOROUGH BASS RIVER TWP MUNICIPAL BLDG BAY HEAD BOROUGH (*)BAYONNE CITY (*)BEACH HAVEN BOROUGH (*)BEACHWOOD BOROUGH BEDMINSTER TOWNSHIP (*)BELLEVILLE TOWNSHIP BELLMAWR BOROUGH BELMAR BOROUGH (*)BELVIDERE TOWN (*)BERGENFIELD BOROUGH (*)BERKELEY HEIGHTS TOWNSHIP BERKELEY TWP MUNICIPAL BLDG (*)BERLIN BOROUGH (*)BERLIN TOWNSHIP (*)BERNARDS TOWNSHIP (*)BERNARDSVILLE BORO (*)BETHLEHEM TOWNSHIP (*)BEVERLY CITY MUNICIPAL BLDG (*)BLAIRSTOWN TOWNSHIP (*)BLOOMFIELD TOWNSHIP BLOOMINGDALE BOROUGH (*)BLOOMSBURY BOROUGH (*)BOGOTA BOROUGH BOONTON TOWN (*)BOONTON TOWNSHIP (*)BORDENTOWN CITY (*)BORDENTOWN TWP BOUND BROOK BOROUGH (*)BRADLEY BEACH BOROUGH (*)BRANCHBURG TOWNSHIP BRANCHVILLE BOROUGH (*)BRICK TOWNSHIP BRIDGETON CITY BRIDGEWATER TWP BRIELLE BOROUGH BRIGANTINE CITY BROOKLAWN BOROUGH BUENA BOROUGH (*)BUENA VISTA TOWNSHIP (*)BURLINGTON CITY (*)BURLINGTON TOWNSHIP BUTLER BOROUGH BYRAM TOWNSHIP CALDWELL BOROUGH CALIFON BOROUGH (*)CAMDEN CITY CAPE MAY CITY (*)CAPE MAY POINT BOROUGH (*)CARLSTADT BOROUGH

CARNEYS POINT TOWNSHIP CARTERET BOROUGH CEDAR GROVE TOWNSHIP (*)CHATHAM BOROUGH CHATHAM TOWNSHIP CHERRY HILL TOWNSHIP CHESILHURST BOROUGH CHESTER BOROUGH (*)CHESTER TOWNSHIP (*)CHESTERFIELD TOWNSHIP (*)CINNAMINSON TOWNSHIP CLARK TOWNSHIP (*)CLAYTON BOROUGH (*)CLEMENTON BOROUGH (*)CLIFFSIDE PARK BOROUGH (*)CLIFTON CITY CLINTON TOWN (*)CLINTON TOWNSHIP (*)CLOSTER BOROUGH (*)COLLINGSWOOD BOROUGH (*)COLTS NECK TOWNSHIP COMMERCIAL TOWNSHIP (*)CORBIN CITY (*)CRANBURY TOWNSHIP (*)CRANFORD TOWNSHIP CRESSKILL BOROUGH (*)DEAL BOROUGH (*)DEERFIELD TOWNSHIP (*)DELANCO TOWNSHIP (*)DELAWARE TOWNSHIP (*)DELRAN TOWNSHIP DEMAREST BOROUGH (*)DENNIS TOWNSHIP (*)DENVILLE TOWNSHIP (*)DEPTFORD TOWNSHIP (*)DOVER TOWN DOWNE TOWNSHIP DUMONT BOROUGH (*)DUNELLEN BOROUGH (*)EAGLESWOOD TOWNSHIP (*)EAST AMWELL TOWNSHIP (*)EAST BRUNSWICK TOWNSHIP EAST GREENWICH TOWNSHIP EAST HANOVER TOWNSHIP EAST NEWARK BOROUGH EAST ORANGE CITY EAST RUTHERFORD BOROUGH (*)EAST WINDSOR TOWNSHIP EASTAMPTON TOWNSHIP (*)EATONTOWN BOROUGH EDGEWATER BOROUGH EDGEWATER PARK TOWNSHIP (*)EDISON TOWNSHIP EGG HARBOR CITY EGG HARBOR TOWNSHIP (*)ELIZABETH CITY (*)ELK TOWNSHIP (*)ELMER BOROUGH ELMWOOD PARK BOROUGH (*)ELSINBORO TOWNSHIP

EMERSON BOROUGH ENGLEWOOD CITY (*)ENGLEWOOD CLIFFS BOROUGH (*)ENGLISHTOWN BOROUGH ESSEX FELLS BOROUGH (*)ESTELL MANOR CITY (*)EVESHAM TOWNSHIP EWING TOWNSHIP (*)FAIR HAVEN BOROUGH (*)FAIR LAWN BOROUGH FAIRFIELD TOWNSHIP (CUMBERLAND) FAIRFIELD TOWNSHIP (ESSEX) FAIRVIEW BOROUGH (*)FANWOOD BOROUGH FAR HILLS BOROUGH (*)FARMINGDALE BOROUGH (*)FIELDSBORO BOROUGH FLEMINGTON BOROUGH (*)FLORENCE TOWNSHIP (*)FLORHAM PARK BOROUGH FOLSOM BOROUGH (*)FORT LEE BOROUGH FRANKFORD TOWNSHIP (*)FRANKLIN BOROUGH (*)FRANKLIN LAKES BOROUGH (*)FRANKLIN TOWNSHIP (GLOUCESTER) FRANKLIN TOWNSHIP (HUNTERDON) FRANKLIN TOWNSHIP (SOMERSET) FRANKLIN TOWNSHIP (WARREN) FREDON TOWNSHIP FREEHOLD BOROUGH (*)FREEHOLD TOWNSHIP FRELINGHUYSEN TWP (*)FRENCHTOWN BOROUGH (*)GALLOWAY TOWNSHIP GARFIELD CITY GARWOOD BOROUGH (*)GIBBSBORO BOROUGH GLASSBORO BOROUGH GLEN GARDNER BOROUGH (*)GLEN RIDGE BOROUGH (*)GLEN ROCK BOROUGH (*)GLOUCESTER CITY GLOUCESTER TOWNSHIP GREEN BROOK TOWNSHIP (*)GREEN TOWNSHIP (*)GREENWICH TOWNSHIP (CUMBERLAND) GREENWICH TOWNSHIP (GLOUCESTER) GREENWICH TOWNSHIP (WARREN) (*)GUTTENBERG TOWN HACKENSACK CITY HACKETTSTOWN TOWN (*)HADDON HEIGHTS BOROUGH (*)HADDON TOWNSHIP HADDONFIELD BOROUGH HAINESPORT TOWNSHIP (*)HALEDON BOROUGH (*)HAMBURG BOROUGH (*)HAMILTON TOWNSHIP (ATLANTIC) (*)HAMILTON TOWNSHIP (MERCER)


PARTICIPATING COUNTY AND MUNICIPAL EMPLOYERS

*In addition to participating in the retirement system, also participates in the State Health Benefits Program



HAMMONTON TOWN (*)HAMPTON BOROUGH (*)HAMPTON TOWNSHIP (*)HANOVER TOWNSHIP HARDING TOWNSHIP HARDWICK TOWNSHIP (*)HARDYSTON TOWNSHIP HARMONY TOWNSHIP (*)HARRINGTON PARK BOROUGH (*)HARRISON TOWN (HUDSON) HARRISON TOWNSHIP (GLOUCESTER) (*)HARVEY CEDARS BOROUGH (*)HASBROUCK HEIGHTS BOROUGH (*)HAWORTH BOROUGH (*)HAWTHORNE BOROUGH HAZLET TOWNSHIP HELMETTA BOROUGH (*)HIGH BRIDGE BOROUGH HIGHLAND PARK BOROUGH (*)HIGHLANDS BOROUGH HIGHTSTOWN BOROUGH HILLSBOROUGH TOWNSHIP (*)HILLSDALE BOROUGH HILLSIDE TOWNSHIP HI-NELLA BOROUGH HOBOKEN CITY HO-HO-KUS BOROUGH (*)HOLLAND TOWNSHIP (*)HOLMDEL TOWNSHIP HOPATCONG BOROUGH HOPE TOWNSHIP (*)HOPEWELL BOROUGH (*)HOPEWELL TOWNSHIP (CUMBERLAND) HOPEWELL TOWNSHIP (MERCER) HOWELL TOWNSHIP INDEPENDENCE TWP/ MUN. BLDG (*)INTERLAKEN BOROUGH IRVINGTON TWP DEPT OF REV & FINANCE ISLAND HEIGHTS BOROUGH (*)JACKSON TOWNSHIP (*)JAMESBURG BOROUGH (*)JEFFERSON TOWNSHIP (*)JERSEY CITY KEANSBURG BOROUGH KEARNY TOWN (*)KENILWORTH BOROUGH (*)KEYPORT BOROUGH KINGWOOD TOWNSHIP (*)KINNELON BOROUGH KNOWLTON TOWNSHIP (*)LACEY TOWNSHIP (*)LAFAYETTE TOWNSHIP (*)LAKE COMO BOROUGH (*)LAKEHURST BOROUGH (*)LAKEWOOD TOWNSHIP LAMBERTVILLE CITY (*)LAUREL SPRINGS BOROUGH (*)LAVALLETTE BOROUGH (*)LAWNSIDE BOROUGH LAWRENCE TOWNSHIP (CUMBERLAND) (*)LAWRENCE TOWNSHIP (MERCER) (*)LEBANON BOROUGH (*)LEBANON TOWNSHIP (*)

LEONIA BOROUGH (*)LIBERTY TOWNSHIP (*)LINCOLN PARK BOROUGH LINDEN CITY (*)LINDENWOLD BOROUGH (*)LINWOOD CITY LITTLE EGG HARBOR TOWNSHIP LITTLE FALLS TWP (*)LITTLE FERRY BOROUGH (*)LITTLE SILVER BOROUGH LIVINGSTON TOWNSHIP (*)LOCH ARBOUR VILLAGE LODI BOROUGH LOGAN TOWNSHIP LONG BEACH TOWNSHIP (*)LONG BRANCH CITY LONG HILL TOWNSHIP (*)LONGPORT BOROUGH (*)LOPATCONG TOWNSHIP LOWER ALLOWAYS CREEK TOWNSHIP LOWER TOWNSHIP LUMBERTON TOWNSHIP (*)LYNDHURST TOWNSHIP MADISON BOROUGH MAGNOLIA BOROUGH MAHWAH TOWNSHIP MANALAPAN TOWNSHIP (*)MANASQUAN BOROUGH MANCHESTER TOWNSHIP MANNINGTON TOWNSHIP (*)MANSFIELD TOWNSHIP (BURLINGTON) MANSFIELD TOWNSHIP (WARREN) MANTOLOKING BOROUGH (*)MANTUA TOWNSHIP (*)MANVILLE BOROUGH (*)MAPLE SHADE TOWNSHIP MAPLEWOOD TOWNSHIP (*)MARGATE CITY MARLBORO TOWNSHIP (*)MATAWAN BOROUGH MAURICE RIVER TOWNSHIP (*)MAYWOOD BOROUGH MEDFORD LAKES BOROUGH (*)MEDFORD TOWNSHIP (*)MENDHAM BOROUGH (*)MENDHAM TOWNSHIP (*)MERCHANTVILLE BOROUGH METUCHEN BOROUGH MIDDLE TOWNSHIP (*)MIDDLESEX BOROUGH (*)MIDDLETOWN TOWNSHIP MIDLAND PARK BOROUGH (*)MILFORD BOROUGH (*)MILLBURN TOWNSHIP (*)MILLSTONE BOROUGH MILLSTONE TOWNSHIP (*)MILLTOWN BOROUGH (*)MILLVILLE CITY MINE HILL TOWNSHIP (*)MONMOUTH BEACH BOROUGH (*)MONROE TOWNSHIP (GLOUCESTER) MONROE TOWNSHIP (MIDDLESEX) MONTAGUE TOWNSHIP (*)

MONTCLAIR TOWNSHIP (*)MONTGOMERY TOWNSHIP (*)MONTVALE BOROUGH MONTVILLE TOWNSHIP (*)MOONACHIE BOROUGH MOORESTOWN TOWNSHIP MORRIS PLAINS BOROUGH (*)MORRIS TOWNSHIP (*)MORRISTOWN TOWN MOUNT ARLINGTON BOROUGH (*)MOUNT EPHRAIM BOROUGH MOUNT HOLLY TOWNSHIP (*)MOUNT LAUREL TOWNSHIP (*)MOUNT OLIVE TOWNSHIP MOUNTAIN LAKES BOROUGH (*)MOUNTAINSIDE BOROUGH (*)MULLICA TOWNSHIP (*)NATIONAL PARK BOROUGH NEPTUNE CITY BOROUGH NEPTUNE TOWNSHIP NETCONG BOROUGH (*)NEW BRUNSWICK CITY NEW HANOVER TOWNSHIP (*)NEW MILFORD BOROUGH NEW PROVIDENCE BOROUGH NEWARK CITY NEWFIELD BOROUGH (*)NEWTON TOWN (*)NORTH ARLINGTON BOROUGH NORTH BERGEN TOWNSHIP NORTH BRUNSWICK TOWNSHIP (*)NORTH CALDWELL BOROUGH (*)NORTH HALEDON BOROUGH (*)NORTH HANOVER TOWNSHIP (*)N. HUNTERDON MUNICIPAL COURT (*)NORTH PLAINFIELD BOROUGH (*)NORTH WILDWOOD CITY NORTHFIELD CITY (*)NORTHVALE BOROUGH (*)NORWOOD BOROUGH (*)NUTLEY TOWNSHIP (*)OAKLAND BOROUGH OAKLYN BOROUGH OCEAN CITY OCEAN GATE BOROUGH (*)OCEAN TOWNSHIP (MONMOUTH) (*)OCEAN TOWNSHIP (OCEAN) OCEANPORT BOROUGH OGDENSBURG BOROUGH OLD BRIDGE TOWNSHIP OLD TAPPAN BOROUGH OLDMANS TOWNSHIP ORADELL BOROUGH (*)ORANGE CITY OXFORD TOWNSHIP (*)PALISADES PARK BOROUGH PALMYRA BOROUGH (*)PARAMUS BOROUGH (*)PARK RIDGE BOROUGH PARSIPPANY TROY HILLS TOWNSHIP PASSAIC CITY (*)PATERSON CITY PAULSBORO BOROUGH

PEAPACK GLADSTONE BOROUGH (*)PEMBERTON BOROUGH (*)PEMBERTON TOWNSHIP PENNINGTON BOROUGH (*)PENNS GROVE BOROUGH PENNSAUKEN TOWNSHIP PENNSVILLE TOWNSHIP PEQUANNOCK TOWNSHIP PERTH AMBOY CITY PHILLIPSBURG TOWN PILESGROVE TOWNSHIP (*)PINE BEACH BOROUGH (*)PINE HILL BOROUGH PINE VALLEY BOROUGH (*)PISCATAWAY TOWNSHIP PITMAN BOROUGH PITTSGROVE TOWNSHIP (*)PLAINFIELD CITY (*)PLAINSBORO TOWNSHIP PLEASANTVILLE CITY (*)PLUMSTED TOWNSHIP POHATCONG TOWNSHIP POINT PLEASANT BEACH BOROUGH POINT PLEASANT BOROUGH POMPTON LAKES BOROUGH (*)PORT REPUBLIC CITY (*)PRINCETON BOROUGH (*)PRINCETON TOWNSHIP PROSPECT PARK BOROUGH (*)QUINTON TOWNSHIP RAHWAY CITY RAMSEY BOROUGH RANDOLPH TOWNSHIP RARITAN BOROUGH (*)RARITAN TOWNSHIP READINGTON TOWNSHIP (*)RED BANK BOROUGH RIDGEFIELD BOROUGH (*)RIDGEFIELD PARK VILLAGE RIDGEWOOD VILLAGE (*)RINGWOOD BOROUGH RIVER EDGE BOROUGH (*)RIVER VALE TOWNSHIP (*)RIVERDALE BOROUGH (*)RIVERSIDE TOWNSHIP RIVERTON BOROUGH (*)ROBBINSVILLE TOWNSHIP ROCHELLE PARK TOWNSHIP (*)ROCKAWAY BOROUGH (*)ROCKAWAY TOWNSHIP (*)ROCKLEIGH BOROUGH (*)ROCKY HILL BOROUGH ROOSEVELT BOROUGH (*)ROSELAND BOROUGH (*)ROSELLE BOROUGH ROSELLE PARK BOROUGH ROXBURY TOWNSHIP RUMSON BOROUGH (*)RUNNEMEDE BOROUGH RUTHERFORD BOROUGH SADDLE BROOK TOWNSHIP SADDLE RIVER BOROUGH SALEM CITY (*)

PARTICIPATING COUNTY AND MUNICIPAL EMPLOYERS, Continued




SANDYSTON TOWNSHIP (*)SAYREVILLE BOROUGH SCOTCH PLAINS TOWNSHIP SEA BRIGHT BORO (*)SEA GIRT BOROUGH (*)SEA ISLE CITY SEASIDE HEIGHTS BOROUGH (*)SEASIDE PARK BOROUGH (*)SECAUCUS TOWN SHAMONG TOWNSHIP (*)SHILOH BOROUGH SHIP BOTTOM BOROUGH SHREWSBURY BOROUGH SHREWSBURY TOWNSHIP SOMERDALE BOROUGH (*)SOMERS POINT CITY SOMERVILLE BOROUGH (*)SOUTH AMBOY CITY SOUTH BOUND BROOK BOROUGH (*)SOUTH BRUNSWICK TOWNSHIP (*)SOUTH HACKENSACK TOWNSHIP SOUTH HARRISON TOWNSHIP SOUTH ORANGE VILLAGE (*)SOUTH PLAINFIELD BOROUGH SOUTH RIVER BOROUGH (*)SOUTH TOMS RIVER BOROUGH (*)SOUTHAMPTON TOWNSHIP (*)SPARTA TOWNSHIP SPOTSWOOD BOROUGH (*)SPRING LAKE BOROUGH (*)SPRING LAKE HEIGHTS BOROUGH (*)

SPRINGFIELD TOWNSHIP (UNION) SPRINGFIELD TWP (BURLINGTON) (*)STAFFORD TOWNSHIP STANHOPE BOROUGH (*)STILLWATER TOWNSHIP (*)STOCKTON BOROUGH STONE HARBOR BOROUGH STOW CREEK TOWNSHIP STRATFORD BOROUGH (*)SUMMIT CITY (*)SURF CITY BOROUGH SUSSEX BOROUGH (*)SWEDESBORO BOROUGH TABERNACLE TOWNSHIP (*)TAVISTOCK BOROUGH TEANECK TOWNSHIP (*)TENAFLY BOROUGH (*)TETERBORO BOROUGH (*)TEWKSBURY TOWNSHIP (*)TINTON FALLS BOROUGH TOMS RIVER TOWNSHIP TOTOWA BOROUGH (*)TRENTON CITY (*)TUCKERTON BOROUGH (*)UNION BEACH BOROUGH (*)UNION CITY UNION TOWNSHIP (HUNTERDON) (*)UNION TOWNSHIP (UNION) UPPER DEERFIELD TOWNSHIP (*)UPPER FREEHOLD TOWNSHIP (*)UPPER PITTSGROVE TOWNSHIP (*)

UPPER SADDLE RIVER BORO (*)UPPER TOWNSHIP VENTNOR CITY VERNON TOWNSHIP VERONA TOWNSHIP (*)VICTORY GARDENS BOROUGH VINELAND CITY VOORHEES TOWNSHIP (*)WALDWICK BOROUGH (*)WALL TOWNSHIP WALLINGTON BOROUGH WALLPACK TOWNSHIP WANAQUE BOROUGH WANTAGE TOWNSHIP WARREN TOWNSHIP (*)WASHINGTON BOROUGH (*)WASHINGTON TOWNSHIP (BERGEN) (*)WASHINGTON TWP (BURLINGTON) WASHINGTON TWP (GLOUCESTER) WASHINGTON TWP (MORRIS) WASHINGTON TWP (WARREN) WATCHUNG BOROUGH (*)WATERFORD TOWNSHIP (*)WAYNE TOWNSHIP WEEHAWKEN TOWNSHIP (*)WENONAH BOROUGH WEST AMWELL TOWNSHIP (*)WEST CALDWELL TOWNSHIP WEST CAPE MAY BOROUGH (*)WEST DEPTFORD TOWNSHIP WEST LONG BRANCH BOROUGH

WEST MILFORD TOWNSHIP WEST NEW YORK TOWN WEST ORANGE TOWNSHIP (*)WEST PATERSON BOROUGH WEST WILDWOOD BOROUGH (*)WEST WINDSOR TOWNSHIP WESTAMPTON TOWNSHIP (*)WESTFIELD TOWN WESTVILLE BOROUGH WESTWOOD BOROUGH WEYMOUTH TOWNSHIP (*)WHARTON BOROUGH (*)WHITE TOWNSHIP (*)WILDWOOD CITY (*)WILDWOOD CREST BOROUGH (*)WILLINGBORO TOWNSHIP WINFIELD TOWNSHIP (*)WINSLOW TOWNSHIP WOODBINE BOROUGH (*)WOODBRIDGE TOWNSHIP WOODBURY CITY WOODBURY HEIGHTS BOROUGH (*)WOODCLIFF LAKE BOROUGH (*)WOODLAND TOWNSHIP (*)WOODLYNNE BOROUGH (*)WOOD-RIDGE BOROUGH WOODSTOWN BOROUGH (*)WOOLWICH TOWNSHIP WRIGHTSTOWN BOROUGH (*)WYCKOFF TOWNSHIP (*)

PARTICIPATING COUNTY AND MUNICIPAL EMPLOYERS, Continued




ATLANTIC CO AUDIO VISUAL AIDS COMMISSION (*)BURLINGTON CO AUDIO VISUAL AIDS COMMISSION (*)GLOUCESTER CO AUDIO VISUAL AID COMMISSION (*)MORRIS AUDIO VISUAL COMMISSION OCEAN CO AUDIO VISUAL AIDS COMMISSION (*)WARREN CO AUDIO VISUAL AIDS

ABSECON BOARD OF EDUCATION ALEXANDRIA TWP BOARD OF EDUCATION ALLAMUCHY BOARD OF EDUCATION ALLENDALE BORO BOARD OF EDUCATION ALLENHURST BOARD OF EDUCATION (*)ALLOWAY TWP BOARD OF EDUCATION ALPHA BOARD OF EDUCATION (*)ALPINE BOARD OF EDUCATION (*)ANDOVER REGIONAL BOARD OF EDUCATION (*)ASBURY PARK BOARD OF EDUCATION (*)ATLANTIC CITY BOARD OF EDUCATION ATLANTIC HIGHLANDS BOARD OF EDUCATION (*)AUDUBON BOROUGH BOARD OF EDUCATION AVALON BOROUGH BOARD OF EDUCATION AVON BY THE SEA BORO BOARD OF EDUCATION (*)BARNEGAT TWP BOARD OF EDUCATION BARRINGTON BORO BOARD OF EDUCATION (*)BASS RIVER TWP BOARD OF EDUCATION (*)BAY HEAD BOARD OF EDUCATION BAYONNE BOARD OF EDUCATION BEACH HAVEN BOROUGH BOARD OF EDUCATION (*)BEDMINSTER TWP BOARD OF EDUCATION BELLEVILLE BOARD OF EDUCATION BELLMAWR BOROUGH BOARD OF EDUCATION (*)BELMAR BORO BOARD OF EDUCATION BELVIDERE TOWN BOARD OF EDUCATION BERGENFIELD BOARD OF EDUCATION (*)BERKELEY HEIGHTS BOARD OF EDUCATION BERKELEY TWP BOARD OF EDUCATION BERLIN BOROUGH BOARD OF EDUCATION BERLIN TOWNSHIP BOARD OF EDUCATION BERNARDS TWP BOARD OF EDUCATION BETHLEHEM TWP BOARD OF EDUCATION BEVERLY CITY BOARD OF EDUCATION (*)BLACK HORSE PIKE REGIONAL SCHOOL DISTRICT BLAIRSTOWN TWP BOARD OF EDUCATION BLOOMFIELD TWP BOARD OF EDUCATION BLOOMINGDALE BOARD OF EDUCATION BLOOMSBURY BOROUGH BOARD OF EDUCATION (*)BOGOTA BORO BOARD OF EDUCATION (*)BOONTON TOWN BOARD OF EDUCATION BOONTON TWP BOARD OF EDUCATION BORDENTOWN REGIONAL SCHOOL DISTRICT (*)BOUND BROOK BORO BOARD OF EDUCATION BRADLEY BEACH BOARD OF EDUCATION BRANCHBURG TWP BOARD OF EDUCATION BRANCHVILLE BOARD OF EDUCATION BRICK TWP BOARD OF EDUCATION BRIDGETON BOARD OF EDUCATION BRIDGEWATER-RARITAN REGIONAL SCHOOL DISTRICT BRIELLE BORO BOARD OF EDUCATION BRIGANTINE CITY BOARD OF EDUCATION (*)BROOKLAWN BORO BOARD OF EDUCATION

BUENA REGIONAL SCHOOL DISTRICT BURLINGTON CITY BOARD OF EDUCATION BURLINGTON TWP BOARD OF EDUCATION BUTLER BORO BOARD OF EDUCATION BYRAM TWP BOARD OF EDUCATION CALDWELL WEST CALDWELL BOARD OF EDUCATION (*)CALIFON BORO BOARD OF EDUCATION (*)CAMDEN CITY BOARD OF EDUCATION (*)CAPE MAY CITY BOARD OF EDUCATION (*)CAPE MAY PT BORO BOARD OF EDUCATION CARLSTADT BOROUGH BOARD OF EDUCATION CARLSTADT EAST RUTHERFORD BOARD OF EDUCATION CARTERET BOARD OF EDUCATION CEDAR GROVE TWP BOARD OF EDUCATION CENTRAL REGIONAL HIGH SCHOOL DISTRICT CHATHAMS SCHOOL DISTRICT CHERRY HILL TWP BOARD OF EDUCATION CHESILHURST BORO BOARD OF EDUCATION (*)CHESTER TWP BOARD OF EDUCATION CHESTERFIELD TWP BOARD OF EDUCATION (*)CINNAMINSON TWP BOARD OF EDUCATION CLARK TWP BOARD OF EDUCATION CLAYTON BOROUGH BOARD OF EDUCATION CLEARVIEW REGIONAL BOARD OF EDUCATION CLEMENTON BOARD OF EDUCATION CLIFFSIDE PARK BOARD OF EDUCATION CLIFTON CITY BOARD OF EDUCATION CLINTON TOWN BOARD OF EDUCATION CLINTON TWP BOARD OF EDUCATION CLOSTER BOARD OF EDUCATION (*)COLLINGSWOOD BOROUGH BOARD OF EDUCATION COLTS NECK TWP BOARD OF EDUCATION COMMERCIAL TWP BOARD OF EDUCATION CORBIN CITY BOARD OF EDUCATION (*)CRANBURY TOWNSHIP BOARD OF EDUCATION CRANFORD TWP BOARD OF EDUCATION (*)CRESSKILL BOARD OF EDUCATION CUMBERLAND REGIONAL SCHOOL DIST DEAL BORO BOARD OF EDUCATION (*)DEERFIELD TOWNSHIP BOARD OF EDUCATION DELANCO TWP BOARD OF EDUCATION DELAWARE TWP BOARD OF EDUCATION (*)DELAWARE VALLEY REGIONAL HIGH SCHOOL DISTRICT DELRAN TWP BOARD OF EDUCATION DELSEA REGIONAL HIGH SCHOOL DISTRICT DEMAREST BORO BOARD OF EDUCATION (*)DENNIS TWP BOARD OF EDUCATION DENVILLE TWP BOARD OF EDUCATION DEPTFORD TWP BOARD OF EDUCATION DOVER BOARD OF EDUCATION DOWNE TWP BOARD OF EDUCATION DUMONT BOROUGH BOARD OF EDUCATION DUNELLEN BOARD OF EDUCATION EAGLESWOOD TWP BOARD OF EDUCATION (*)EAST AMWELL TOWNSHIP BOARD OF EDUCATION (*)EAST BRUNSWICK TWP BOARD OF EDUCATION EAST GREENWICH BOARD OF EDUCATION (*)EAST HANOVER TWP BOARD OF EDUCATION (*)EAST NEWARK BOROUGH BOARD OF EDUCATION (*)EAST ORANGE CITY BOARD OF EDUCATION (*)

EAST RUTHERFORD BORO BOARD OF EDUCATION EAST WINDSOR REGIONAL SCHOOL DIST EASTAMPTON TOWNSHIP BOARD OF EDUCATION EASTERN CAMDEN CO REGIONAL SCHOOL DISTRICT EATONTOWN BOARD OF EDUCATION (*)EDGEWATER BORO BOARD OF EDUCATION EDGEWATER PARK TWP BOARD OF EDUCATION (*)EDISON TWP BOARD OF EDUCATION EGG HARBOR CITY BOARD OF EDUCATION (*)EGG HARBOR TWP BOARD OF EDUCATION ELIZABETH BOARD OF EDUCATION (*)ELK TWP BOARD OF EDUCATION ELMER BOARD OF EDUCATION ELMWOOD PARK BOROUGH BOARD OF EDUCATION (*)ELSINBORO TOWNSHIP BOARD OF EDUCATION (*)EMERSON BOROUGH BOARD OF EDUCATION (*)ENGLEWOOD CITY BOARD OF EDUCATION (*)ENGLEWOOD CLIFFS BOARD OF EDUCATION (*)ESSEX FELLS BOARD OF EDUCATION ESTELL MANOR BOARD OF EDUCATION (*)EVESHAM TWP BOARD OF EDUCATION EWING TOWNSHIP BOARD OF EDUCATION (*)FAIR HAVEN BOROUGH BOARD OF EDUCATION FAIR LAWN BOARD OF EDUCATION FAIRFIELD TWP BD OF EDUCATION (CUMBERLAND) (*)FAIRFIELD TWP BOARD OF EDUCATION (ESSEX) FAIRVIEW BORO BOARD OF EDUCATION (*)FARMINGDALE BOARD OF EDUCATION (*)FLEMINGTON RARITAN BOARD OF EDUCATION FLORENCE TOWNSHIP BOARD OF EDUCATION FLORHAM PARK BOARD OF EDUCATION (*)FOLSOM BOROUGH BOARD OF EDUCATION (*)FORT LEE BOARD OF EDUCATION FRANKFORD TOWNSHIP BOARD OF EDUCATION FRANKLIN BORO BOARD OF EDUCATION (*)FRANKLIN LAKES BOARD OF EDUCATION FRANKLIN TWP BOARD OF EDUCATION (GLOUCESTER) FRANKLIN TWP BOARD OF EDUCATION (SOMERSET) FRANKLIN TWP BOARD OF EDUCATION (WARREN) FRANKLIN TWP BOARD OF EDUCATION HUNTERDON) FREDON TOWNSHIP BOARD OF EDUCATION FREEHOLD BORO BOARD OF EDUCATION FREEHOLD REGIONAL HIGH SCHOOL DISTRICT FREEHOLD TWP BOARD OF EDUCATION FRELINGHUYSEN TWP BOARD OF EDUCATION FRENCHTOWN BOROUGH BOARD OF EDUCATION (*)GALLOWAY TOWNSHIP BOARD OF EDUCATION GARFIELD CITY BOARD OF EDUCATION (*)GARWOOD BOROUGH BOARD OF EDUCATION GATEWAY REGIONAL HIGH SCHOOL GIBBSBORO BOROUGH BOARD OF EDUCATION GLASSBORO BOARD OF EDUCATION GLEN RIDGE BOARD OF EDUCATION GLEN ROCK BOROUGH BOARD OF EDUCATION (*)GLOUCESTER CITY BOARD OF EDUCATION (*)GLOUCESTER TWP BOARD OF EDUCATION GREAT MEADOWS REGIONAL BOARD OF EDUCATION GREATER EGG HARBOR REGIONAL GREEN BROOK BOARD OF EDUCATION GREEN TOWNSHIP BOARD OF EDUCATION


PARTICIPATING EDUCATION EMPLOYERS




GREENWICH TWP BD OF EDUCATION (CUMBERLAND) (*)GREENWICH TWP BOARD OF EDUCATION (GLOUCESTER) GREENWICH TWP BOARD OF EDUCATION (WARREN) GUTTENBERG BORO BOARD OF EDUCATION HACKENSACK CITY BOARD OF EDUCATION (*)HACKETTSTOWN BOARD OF EDUCATION HADDON HEIGHTS BOARD OF EDUCATION HADDON TOWNSHIP BOARD OF EDUCATION HADDONFIELD BOARD OF EDUCATION HAINESPORT TOWNSHIP BOARD OF EDUCATION HALEDON BOROUGH BOARD OF EDUCATION (*)HAMBURG BOROUGH BOARD OF EDUCATION HAMILTON TWP BOARD OF EDUCATION (ATLANTIC) HAMILTON TWP BOARD OF EDUCATION (MERCER) HAMMONTON TOWN BOARD OF EDUCATION HAMPTON BOROUGH BOARD OF EDUCATION (*)HAMPTON TOWNSHIP BOARD OF EDUCATION (*)HANOVER PARK REGIONAL HIGH SCHOOL DISTRICT (*)HANOVER TOWNSHIP BOARD OF EDUCATION (*)HARDING TOWNSHIP BOARD OF EDUCATION HARDWICK TWP BOARD OF EDUCATION HARDYSTON TOWNSHIP BOARD OF EDUCATION HARMONY TOWNSHIP BOARD OF EDUCATION (*)HARRINGTON PARK BOARD OF EDUCATION HARRISON TOWN BOARD OF EDUCATION (HUDSON) HARRISON TWP BOARD OF EDUCATION (GLOUCESTER) HASBROUCK HEIGHTS BOARD OF EDUCATION HAWORTH BOROUGH BOARD OF EDUCATION (*)HAWTHORNE BOARD OF EDUCATION HAZLET TWP BOARD OF EDUCATION HELMETTA BORO BOARD OF EDUCATION (*)HENRY HUDSON REGIONAL SCHOOL DISTRICT HIGH BRIDGE BOROUGH BOARD OF EDUCATION HIGH POINT REGIONAL HIGH SCHOOL HIGHLAND PARK BOARD OF EDUCATION HIGHLANDS BORO BOARD OF EDUCATION HILLSBOROUGH TWP BOARD OF EDUCATION HILLSDALE BOROUGH BOARD OF EDUCATION (*)HILLSIDE BOARD OF EDUCATION HOBOKEN BOARD OF EDUCATION HO-HO-KUS BOARD OF EDUCATION (*)HOLLAND TWP BOARD OF EDUCATION HOLMDEL TOWNSHIP BOARD OF EDUCATION (*)HOPATCONG BOARD OF EDUCATION HOPE TWP BOARD OF EDUCATION (*)HOPEWELL TWP BOARD OF EDUCATION (CUMBERLAND) HOPEWELL VALLEY REGIONAL SCHOOL DISTRICT HOWELL TWP BOARD OF EDUCATION HUNTERDON CENTRAL HIGH SCHOOL INTERLAKEN BOROUGH BOARD OF EDUCATION IRVINGTON BOARD OF EDUCATION ISLAND HEIGHTS BORO BOARD OF EDUCATION (*)JACKSON TOWNSHIP BOARD OF EDUCATION JAMESBURG BOROUGH BOARD OF EDUCATION (*)JEFFERSON TOWNSHIP BOARD OF EDUCATION JERSEY CITY PUBLIC SCHOOLS (*)KEANSBURG BOARD OF EDUCATION KEARNY TOWN BOARD OF EDUCATION KENILWORTH BOROUGH BOARD OF EDUCATION KEYPORT BOROUGH BOARD OF EDUCATION KINGSWAY REGIONAL SCHOOL DISTRICT KINGWOOD TOWNSHIP BOARD OF EDUCATION

KINNELON BOROUGH BOARD OF EDUCATION KITTATINNY REGIONAL HIGH SCHOOL KNOWLTON TWP BOARD OF EDUCATION LACEY TOWNSHIP BOARD OF EDUCATION (*)LAFAYETTE TWP BOARD OF EDUCATION LAKEHURST BOROUGH BOARD OF EDUCATION LAKELAND REGIONAL HIGH SCHOOL DISTRICT LAKEWOOD TWP BOARD OF EDUCATION (*)LAMBERTVILLE CITY BOARD OF EDUCATION (*)LAUREL SPRINGS BOROUGH BOARD OF EDUCATION LAVALLETTE BOROUGH BOARD OF EDUCATION LAWNSIDE BOROUGH BOARD OF EDUCATION LAWRENCE TWP BOARD OF EDUCATION (CUMBERLAND) LAWRENCE TWP BOARD OF EDUCATION (MERCER) LEBANON BOROUGH BOARD OF EDUCATION (*)LEBANON TOWNSHIP BOARD OF EDUCATION LENAPE REGIONAL HIGH SCHOOL DISTRICT LENAPE VALLEY REGIONAL HIGH SCHOOL DISTRICT LEONIA BOROUGH BOARD OF EDUCATION LINCOLN PARK BORO BOARD OF EDUCATION LINDEN CITY BOARD OF EDUCATION LINDENWOLD BOROUGH BOARD OF EDUCATION LINWOOD BOARD OF EDUCATION (*)LITTLE EGG HARBOR TWP BOARD OF EDUCATION LITTLE FALLS BOARD OF EDUCATION LITTLE FERRY BOARD OF EDUCATION (*)LITTLE SILVER BOARD OF EDUCATION LIVINGSTON BOARD OF EDUCATION LODI BOARD OF EDUCATION LOGAN TOWNSHIP BOARD OF EDUCATION LONG BEACH ISLAND BOARD OF EDUCATION (*)LONG BRANCH BOARD OF EDUCATION LONG HILL TWP BOARD OF EDUCATION LONGPORT BOROUGH BOARD OF EDUCATION (*)LOPATCONG TOWNSHIP BOARD OF EDUCATION LOWER ALLOWAYS CREEK BOARD OF EDUCATION (*)LOWER CAPE MAY REGIONAL SCHOOL DISTRICT (*)LOWER TOWNSHIP BOARD OF EDUCATION (*)LUMBERTON TWP BOARD OF EDUCATION LYNDHURST TWP BOARD OF EDUCATION MADISON BORO BOARD OF EDUCATION MAGNOLIA BOROUGH BOARD OF EDUCATION MAHWAH BOARD OF EDUCATION MAINLAND REGIONAL HIGH SCHOOL (*)MANALAPAN ENGLISHTOWN REGIONAL SCHOOLS (*)MANASQUAN BOROUGH BOARD OF EDUCATION MANCHESTER TOWNSHIP BOARD OF EDUCATION MANNINGTON TOWNSHIP BOARD OF EDUCATION MANSFIELD TWP BOARD OF EDUCATION (BURLINGTON) MANSFIELD TWP BOARD OF EDUCATION (WARREN) MANTOLOKING BORO BOARD OF EDUCATION MANTUA TOWNSHIP BOARD OF EDUCATION MANVILLE BOROUGH BOARD OF EDUCATION MAPLE SHADE BOARD OF EDUCATION MARGATE CITY BOARD OF EDUCATION (*)MARLBORO TOWNSHIP BOARD OF EDUCATION MATAWAN-ABERDEEN REGIONAL SCHOOL MAURICE RIVER TOWNSHIP BOARD OF EDUCATION MAYWOOD BOARD OF EDUCATION MEDFORD LAKES BORO BOARD OF EDUCATION MEDFORD TOWNSHIP BOARD OF EDUCATION MENDHAM BORO BOARD OF EDUCATION (*)

MENDHAM TOWNSHIP BOARD OF EDUCATION MERCHANTVILLE BORO BOARD OF EDUCATION (*)METUCHEN BORO BOARD OF EDUCATION MIDDLE TOWNSHIP BOARD OF EDUCATION (*)MIDDLESEX BOARD OF EDUCATION MIDDLETOWN TWP BOARD OF EDUCATION MIDLAND PARK BORO BOARD OF EDUCATION (*)MILFORD BOROUGH BOARD OF EDUCATION (*)MILLBURN TWP PUBLIC SCHOOLS MILLSTONE BOROUGH BOARD OF EDUCATION MILLSTONE TOWNSHIP BOARD OF EDUCATION MILLTOWN BOROUGH BOARD OF EDUCATION MILLVILLE BOARD OF EDUCATION MINE HILL TWP BOARD OF EDUCATION (*)MONMOUTH BEACH BOARD OF EDUCATION (*)MONMOUTH REGIONAL SCHOOL MONROE TWP BOARD OF EDUCATION (GLOUCESTER) MONROE TWP BOARD OF EDUCATION (MIDDLESEX) MONTAGUE BOARD OF EDUCATION MONTCLAIR BOARD OF EDUCATION MONTGOMERY TWP BOARD OF EDUCATION MONTVALE BOROUGH BOARD OF EDUCATION (*)MONTVILLE TWP BOARD OF EDUCATION MOONACHIE BOROUGH BOARD OF EDUCATION MOORESTOWN TOWNSHIP BOARD OF EDUCATION (*)MORRIS HILLS REGIONAL DISTRICT MORRIS PLAINS BOARD OF EDUCATION MORRIS SCHOOL DISTRICT MOUNT ARLINGTON BOARD OF EDUCATION MOUNT EPHRAIM BOARD OF EDUCATION MOUNT HOLLY TWP BOARD OF EDUCATION MOUNT LAUREL TWP BOARD OF EDUCATION MOUNT OLIVE TWP BOARD OF EDUCATION MOUNTAIN LAKES BORO BOARD OF EDUCATION (*)MOUNTAINSIDE BORO BOARD OF EDUCATION (*)MULLICA TWP BOARD OF EDUCATION (*)NATIONAL PARK BOROUGH BOARD OF EDUCATION NEPTUNE CITY BOARD OF EDUCATION NEPTUNE TWP BOARD OF EDUCATION NETCONG BOROUGH BOARD OF EDUCATION NEW BRUNSWICK BOARD OF EDUCATION NEW HANOVER TWP BOARD OF EDUCATION NEW MILFORD BOARD OF EDUCATION NEW PROVIDENCE BOARD OF EDUCATION NEWARK PUBLIC SCHOOLS (*)NEWTON BOARD OF EDUCATION NORTH ARLINGTON BOARD OF EDUCATION NORTH BERGEN BOARD OF EDUCATION (*)NORTH BRUNSWICK BOARD OF EDUCATION NORTH CALDWELL BOARD OF EDUCATION NORTH HALEDON BORO BOARD OF EDUCATION (*)NORTH HANOVER TOWNSHIP BOARD OF EDUCATION NORTH HUNTERDON-VOORHEES NORTH PLAINFIELD BOARD OF EDUCATION NORTH WARREN REGIONAL HIGH SCHOOL NORTH WILDWOOD BOARD OF EDUCATION (*)NORTHERN BURLINGTON CO REGIONAL NORTHERN HIGHLANDS REGIONAL HIGH SCHOOL (*)NORTHERN VALLEY REGIONAL HIGH SCHOOL DISTRICT NORTHFIELD BOARD OF EDUCATION NORTHVALE BOARD OF EDUCATION (*)NORWOOD BOARD OF EDUCATION (*)


PARTICIPATING EDUCATION EMPLOYERS, Continued



NUTLEY BOARD OF EDUCATION OAKLAND BOARD OF EDUCATION OAKLYN BOROUGH BOARD OF EDUCATION OCEAN CITY BOARD OF EDUCATION OCEAN GATE BOARD OF EDUCATION (*)OCEAN TWP BOARD OF EDUCATION (MONMOUTH) OCEAN TWP BOARD OF EDUCATION (OCEAN) (*)OCEANPORT SCHOOLS OGDENSBURG BOARD OF EDUCATION OLD BRIDGE BOARD OF EDUCATION OLD TAPPAN BOARD OF EDUCATION OLDMANS TWP BOARD OF EDUCATION ORADELL BOARD OF EDUCATION ORANGE CITY BOARD OF EDUCATION (*)OXFORD TWP BOARD OF EDUCATION PALISADES PARK BOARD OF EDUCATION PALMYRA BOROUGH BOARD OF EDUCATION PARAMUS BOARD OF EDUCATION PARK RIDGE BORO BOARD OF EDUCATION PARSIPPANY TROY HILLS BOARD OF EDUCATION PASCACK VALLEY REGIONAL HIGH SCHOOL DISTRICT (*)PASSAIC BOARD OF EDUCATION (*)PASSAIC CO MANCHESTER REGIONAL HIGH (*)PASSAIC CO REGIONAL HIGH SCHOOL DISTRICT 1 (*)PATERSON BOARD OF EDUCATION (*)PAULSBORO BORO BOARD OF EDUCATION PEMBERTON BOROUGH BOARD OF EDUCATION PEMBERTON TOWNSHIP BOARD OF EDUCATION PENNS GROVE CARNEYS POINT REGIONAL PENNSAUKEN TWP BOARD OF EDUCATION PENNSVILLE TWP BOARD OF EDUCATION PEQUANNOCK TWP BOARD OF EDUCATION PERTH AMBOY BOARD OF EDUCATION PHILLIPSBURG TOWN BOARD OF EDUCATION PINE HILL BOROUGH BOARD OF EDUCATION PINELANDS REGIONAL SCHOOL DISTRICT (*)PISCATAWAY BOARD OF EDUCATION ADMN BLDG PITMAN BOARD OF EDUCATION PITTSGROVE TWP BOARD OF EDUCATION PLAINFIELD BOARD OF EDUCATION PLEASANTVILLE BOARD OF EDUCATION PLUMSTED TWP BOARD OF EDUCATION POHATCONG TWP BOARD OF EDUCATION POINT PLEASANT BEACH BOARD OF EDUCATION POINT PLEASANT BORO BOARD OF EDUCATION POMPTON LAKES BOARD OF EDUCATION PORT REPUBLIC CITY BOARD OF EDUCATION (*)PRINCETON REGIONAL SCHOOL PROSPECT PARK BOARD OF EDUCATION (*)QUINTON TOWNSHIP BOARD OF EDUCATION (*)RAHWAY CITY BOARD OF EDUCATION (*)RAMAPO INDIAN HILLS REG HIGH SCHOOL DISTRICT RAMSEY BOROUGH BOARD OF EDUCATION RANCOCAS VALLEY REGIONAL HIGH SCHOOL RANDOLPH TOWNSHIP BOARD OF EDUCATION READINGTON TWP BOARD OF EDUCATION RED BANK BOARD OF EDUCATION (*)RED BANK REGIONAL HIGH SCHOOL DISTRICT RIDGEFIELD BORO BOARD OF EDUCATION (*)RIDGEFIELD PARK BOARD OF EDUCATION (*)RIDGEWOOD TWP BOARD OF EDUCATION

RINGWOOD BORO BOARD OF EDUCATION (*)RIVER DELL REGIONAL SCHOOL DISTRICT (*)RIVER EDGE BORO BOARD OF EDUCATION RIVER VALE TWP BOARD OF EDUCATION RIVERDALE BOROUGH BOARD OF EDUCATION (*)RIVERSIDE TOWNSHIP BOARD OF EDUCATION RIVERTON BORO SCHOOL BOARD ROBBINSVILLE TWP BOARD OF EDUCATION ROCHELLE PARK TWP BOARD OF EDUCATION (*)ROCKAWAY BOROUGH BOARD OF EDUCATION (*)ROCKAWAY TOWNSHIP BOARD OF EDUCATION ROCKLEIGH BOROUGH BOARD OF ED ROCKY HILL BOARD OF EDUCATION ROOSEVELT BOROUGH BOARD OF EDUCATION (*)ROSELAND BOARD OF EDUCATION ROSELLE BORO BOARD OF EDUCATION ROSELLE PARK BORO BOARD OF EDUCATION ROXBURY TWP BOARD OF EDUCATION RUMSON BORO BOARD OF EDUCATION RUMSON FAIR HAVEN REGIONAL HIGH SCHOOL RUNNEMEDE BOROUGH BOARD OF EDUCATION RUTHERFORD BORO BOARD OF EDUCATION SADDLE BROOK BOARD OF EDUCATION (*)SADDLE RIVER BOARD OF EDUCATION (*)SALEM CITY BOARD OF EDUCATION SANDYSTON WALPACK SCHOOL DIST (*)SAYREVILLE BOARD OF EDUCATION SELOVER ELM SCOTCH PLAINS FANWOOD BOARD OF EDUCATION SEA BRIGHT BORO BOARD OF EDUCATION (*)SEA GIRT BOARD OF EDUCATION (*)SEA ISLE CITY BOARD OF EDUCATION (*)SEASIDE HEIGHTS BOARD OF EDUCATION SEASIDE PARK BOARD OF EDUCATION (*)SECAUCUS TOWN BOARD OF EDUCATION SHAMONG TWP BOARD OF EDUCATION SHILOH BOROUGH BOARD OF EDUCATION SHORE REGIONAL HIGH SCHOOL DISTRICT SHREWSBURY BOROUGH BOARD OF EDUCATION SOMERDALE BORO BOARD OF EDUCATION SOMERS POINT CITY BOARD OF EDUCATION SOMERSET HILLS BOARD OF EDUCATION SOMERVILLE BOARD OF EDUCATION SOUTH AMBOY BOARD OF EDUCATION SOUTH BELMAR BOARD OF EDUCATION SOUTH BOUND BROOK BOARD OF EDUCATION SOUTH BRUNSWICK BOARD OF EDUCATION (*)SOUTH HACKENSACK BOARD OF EDUCATION (*)SOUTH HARRISON TWP BOARD OF EDUCATION SOUTH HUNTERDON REGIONAL BD OF EDUCATION (*)SOUTH ORANGE-MAPLEWOOD BOARD OF EDUCATION (*)SOUTH PLAINFIELD BOARD OF EDUCATION SOUTH RIVER BORO BOARD OF EDUCATION SOUTHAMPTON TWP BOARD OF EDUCATION SOUTHERN REGIONAL HIGH SCHOOL DISTRICT SPARTA BOARD OF EDUCATION SPOTSWOOD BOARD OF EDUCATION SPRING LAKE BORO BOARD OF EDUCATION SPRING LAKE HEIGHTS BOARD OF EDUCATION SPRINGFIELD TWP BOARD OF EDUCATION (UNION) SPRINGFIELD TWP BOARD OF EDUCATION (BURLINGTON) STAFFORD TOWNSHIP BOARD OF EDUCATION

STANHOPE BOROUGH BOARD OF EDUCATION STERLING HIGH SCHOOL DISTRICT STILLWATER TOWNSHIP BOARD OF EDUCATION (*)STOCKTON BOROUGH BOARD OF EDUCATION (*)STONE HARBOR BOARD OF EDUCATION (*)STOW CREEK TOWNSHIP BOARD OF EDUCATION STRATFORD BOARD OF EDUCATION SUMMIT BOARD OF EDUCATION SUSSEX-WANTAGE REGIONAL SCHOOL DISTRICT SWEDESBORO WOOLWICH BOARD OF EDUCATION TABERNACLE TWP BOARD OF EDUCATION TEANECK BOARD OF EDUCATION (*)TENAFLY BOARD OF EDUCATION (*)TEWKSBURY TWP BOARD OF EDUCATION TINTON FALLS BOARD OF EDUCATION (*)TOMS RIVER SCHOOL DISTRICT TOTOWA BOROUGH BOARD OF EDUCATION (*)TRENTON CITY BOARD OF EDUCATION TUCKERTON BORO BOARD OF EDUCATION UNION BEACH BORO BOARD OF EDUCATION UNION CITY BOARD OF EDUCATION UNION TWP BOARD OF EDUCATION (UNION) UNION TWP OF ED (HUNTERDON) UPPER DEERFIELD TWP BOARD OF EDUCATION UPPER FREEHOLD REGIONAL UPPER PITTSGROVE TWP BOARD OF EDUCATION UPPER SADDLE RIVER BOARD OF EDUCATION (*)UPPER TOWNSHIP BOARD OF EDUCATION VENTNOR CITY BOARD OF EDUCATION VERNON TOWNSHIP BOARD OF EDUCATION VERONA BOARD OF EDUCATION VICTORY GARDENS BORO BOARD OF EDUCATION (*)VINELAND CITY BOARD OF EDUCATION VOORHEES TWP BOARD OF EDUCATION WALDWICK BORO BOARD OF EDUCATION (*)WALL TOWNSHIP BOARD OF EDUCATION WALLINGTON BOROUGH BOARD OF EDUCATION (*)WALLKILL VALLEY REGIONAL HIGH SCHOOL WANAQUE BOARD OF EDUCATION WARREN HILLS REGIONAL SCHOOLS WARREN TOWNSHIP BOARD OF EDUCATION WASHINGTON BORO BOARD OF EDUCATION WASHINGTON TWP BOARD OF EDUCATION (MORRIS) WASHINGTON TWP BOARD OF EDUCATION (WARREN) WASHINGTON TWP BOARD OF EDUCATION (BURL) (*)WASHINGTON TWP BOARD OF EDUCATION (GLOUCESTER) WATCHUNG BOROUGH BOARD OF EDUCATION WATCHUNG HILLS REGIONAL HIGH SCHOOL WATERFORD TWP BOARD OF EDUCATION WAYNE BOARD OF EDUCATION WEEHAWKEN TWP BOARD OF EDUCATION (*)WENONAH BOROUGH BOARD OF EDUCATION (*)WEST AMWELL TWP BOARD OF EDUCATION (*)WEST CAPE MAY BORO BOARD OF EDUCATION (*)WEST DEPTFORD TWP BOARD OF EDUCATION WEST ESSEX REGIONAL SCHOOL DISTRICT (*)WEST LONG BRANCH BOARD OF EDUCATION WEST MILFORD TOWNSHIP BOARD OF EDUCATION WEST MORRIS REGIONAL HIGH SCHOOL DISTRICT (*)WEST NEW YORK BOARD OF EDUCATION (*)WEST ORANGE TOWNSHIP BOARD OF EDUCATION


*In addition to participating in the retirement system, also participates in the State Health Benefits Program1Reporting authority only per N.J.S.A. 18A:66-14.2



WEST PATERSON BORO BOARD OF EDUCATION (*)WEST WINDSOR PLAINSBORO REGIONAL (*)WESTAMPTON TOWNSHIP BOARD OF EDUCATION WESTFIELD TOWN BOARD OF EDUCATION WESTVILLE BOARD OF EDUCATION (*)WESTWOOD REGIONAL SCHOOL DISTRICT (*)WEYMOUTH TOWNSHIP BOARD OF EDUCATION (*)WHARTON BOROUGH BOARD OF EDUCATION (*)WHITE TOWNSHIP BOARD OF EDUCATION WILDWOOD CITY BOARD OF EDUCATION (*)WILDWOOD CREST BOARD OF EDUCATION (*)WILLINGBORO TWP BOARD OF EDUCATION (*)WINFIELD TOWNSHIP BOARD OF EDUCATION (*)WINSLOW TOWNSHIP BOARD OF EDUCATION WOODBINE BOROUGH BOARD OF EDUCATION WOODBRIDGE TOWNSHIP BOARD OF EDUCATION WOODBURY CITY BOARD OF EDUCATION WOODBURY HEIGHTS BOARD OF EDUCATION (*)WOODCLIFF LAKE BOARD OF EDUCATION (*)WOODLAND TWP BOARD OF EDUCATION (*)WOODLYNNE BOARD OF EDUCATION (*)WOOD-RIDGE BOARD OF EDUCATION (*)WOODSTOWN-PILESGROVE REGIONAL SCHOOL WYCKOFF TOWNSHIP BOARD OF EDUCATION (*)

ATLANTIC CAPE COMMUNITY COLLEGE (*)BERGEN COMMUNITY COLLEGE (*)BROOKDALE COMMUNITY COLLEGE (*)BURLINGTON CO COLLEGE (*)CAMDEN COUNTY COLLEGE (*)CUMBERLAND COUNTY COLLEGE (*)ESSEX COUNTY COLLEGE (*)GLOUCESTER COUNTY COLLEGE (*)HUDSON CO COMMUNITY COLLEGE (*)MERCER CO COMMUNITY COLLEGE (*)MIDDLESEX COUNTY COLLEGE MORRIS COUNTY COLLEGE (*)OCEAN COUNTY COLLEGE (*)PASSAIC COUNTY COMMUNITY COLLEGE (*)RARITAN VALLEY COMMUNITY COLLEGE (*)SALEM COMMUNITY COLLEGE (*)SUSSEX COUNTY COMM. COLLEGE (*)UNION COUNTY COLLEGE (*)WARREN COUNTY COMMUNITY COLLEGE (*)

ACADEMY FOR URBAN LEADERSHIPACADEMY CHARTER HIGH SCHOOL ADELAIDE SANFORD CHARTER SCHOOLBARACK OBAMA GREEN CHARTER HIGH SCHOOLBERGEN ARTS AND SCIENCE CHARTER SCHOOLBURCH CHARTER SCHOOL FOR EXCELLENCECAMDEN ACADEMY CHARTER HIGH SCHOOL CAMDEN PROMISE CHARTER SCHOOL CAMDEN’S PRIDE CHARTER SCHOOLCENTRAL JERSEY ARTS CHARTER SCHOOL (*)CENTRAL JERSEY COLLEGE PREP CHARTER CHARTER TECH (*)CLASSICAL ACAD. CHARTER SCHOOL (*)COMMUNITY CHARTER SCHOOL OF PATERSONDR LENA EDWARDS ACADEMY CHATER SCHOOLD.U.E. SEASON CHARTER SCHOOL (*)DISCOVERY CHARTER SCHOOL (*)EAST ORANGE COMMUNITY CHART SCHOOL

ECO CHARTER SCHOOL ELYSIAN CHARTER SCHOOL OF HOBOKEN (*)EMILY FISHER CHARTER SCHOOL (*)ENGLEWOOD ON THE PALISADES CHAR (*)ETHICAL COMMUNITY CHARTER SCHOOL JERSEY CITYFOUNDATION ACADEMY CHARTER SCHOOL (*)FRANKLIN CHARTER SCHOOL FREEDOM ACADEMY CHARTER SCHOOL GALLOWAY COMMUNITY CHARTER SCHOOL GATEWAY CHARTER SCHOOL GRANVILLE CHARTER MIDDLE SCHOOL GRAY CHARTER SCHOOL (*)GREAT OAKS CHARTER SCHOOLGREATER BRUNSWICK CHART SCHOOL (*)HATIKVAH INTERNATIONAL ACADEMY CHARTER SCHOOLHOBOKEN CHARTER SCHOOLHOBOKEN DUAL LANGUAGE CHARTER SCHOOLHOPE ACADEMY CHARTER SCHOOLINSTITUTE FOR EXCELLENCE CHARTER SCHOOL INTERNATIONAL CHARTER SCHOOL JERSEY CITY COMM CHARTER SCHOOL (*)JERSEY CITY GOLDEN DOOR CHARTER JOHN P HOLLAND CHARTER SCHOOLLADY LIBERTY ACADEMY CHARTER SCHOOL LEAP ACADEMY CHARTER SCHOOL LEARNING COMM. CHARTER SCHOOL (*)LIBERTY ACADEMY CHARTER SCHOOL MARIA L. VARISCO-ROGERS CHARTER (*)MARION P. THOMAS CHARTER SCHOOL (*)METS CHATER SCHOOLMILLVILLE PUBLIC CHARTER SCHOOLNEW HORIZON COMMUNITY CHARTER SCHOOL NEWARK LEGACY CHARTER SCHOOLNEWARK CHARTER SCHOOL (*)NEWARK EDUCATORS’ COMMUNITY CHARTER SCHOOLNORTH STAR ACADEMY CHARTER SCHOOL OCEANSIDE CHARTER SCHOOL PACE CHARTER SCHOOL OF HAMILTON (*)PATERSON CHART SCHOOL - SCIENCE/TECHPAUL ROBESON CHARTER SCHOOL PEOPLES PREPARATORY CHATER SCHOOLPLEASANTECH ACADEMY CHARTER SCHOOLPRIDE ACADEMY CHARTER SCHOOLPRINCETON CHARTER SCHOOL QUEEN CITY ACADEMY CHARTER SCHOOL RED BANK CHARTER SCHOOL RENAISSANCE REGIONAL LEADERSHIP CHARTER SCHOOLRIDGE AND VALLEY CHARTER SCHOOLRIVERBANK CHARTER SCHOOL OF EXCELLENCE ROBERT TREAT ACADEMY CHARTER SCHOOL ROSEVILLE COMMUNITY CHARTER SCHOOLSCHOMBURG CHARTER SCHOOL SOARING HEIGHTS CHARTER SCHOOL (*)SUSSEX COUNTY CHARTER SCHOOL TEAM ACADEMY CHARTER SCHOOL TEANECK COMMUNITY CHARTER SCHOOL (*)TRENTON COMMUNITY CHARTER SCHOOL (*)UNION COUNTY TEAMS CHARTER SCHOOL UNITY CHARTER SCHOOL (*)UNIVERSITY ACADEMY CHARTER HIGH SCHOOL UNIVERSITY HEIGHTS CHARTER SCHOOL (*)VILLAGE CHARTER SCHOOL (*)VINELAND PUBLIC CHARTER SCHOOL

VISIONS ACADEMY CHARTER HIGH SCHOOL

COMMUNICATIONS WORKERS OF AMERICA NEWARK TEACHERS' UNION NJ STATE FEDERATION OF TEACHERS NJEA PISCATAWAY TWP EDUCATION ASSOCIATION TRENTON EDUCATION ASSOCIATION WOODBRIDGE TWP ED ASSOCIATION CAMDEN CO ED SERVICES COMMISSION

ESSEX CO EDUCATIONAL SERVICE COMMISSIONHUNTERDON CO EDUCATION SERVICES COMMISSIONMIDDLESEX CO ED SERVICES COMMISSIONMONMOUTH OCEAN EDUCATION SERVICE COMMISSIONMORRIS CO EDUCATION SERVICES COMMISSIONPASSAIC CO. EDUCATION SERVICES COMMISSION (*)SOMERSET CO EDUCATIONAL SERVICES COMMISSION (*)SUSSEX CO ED SERVICES COMM BD OF EDUCATION (*)UNION CO EDUCATIONAL SERVICES COMMISSION (*)

RAMAPO COLLEGE OF NEW JERSEY (*)RICHARD STOCKTON COLLEGE OF NJ (*)STATE LIBRARY AFFILIATED W/TESC (*)THE COLLEGE OF NEW JERSEY (*)THOMAS EDISON STATE COLLEGE (*)

ATLANTIC CO SPECIAL SERVICES (*)BERGEN CO BD OF SPECIAL SERVICES BURLINGTON CO BD SPECIAL SERVICES CAPE MAY CO SPECIAL SERVICES (*)GLOUCESTER CO SP SERVICES SCHOOL DISTRICT MERCER CO SPECIAL SER SCHOOL DIST SALEM CO SP SERVICES SCHOOL DIST (*)STOCKTON AFFILIATED SERVICES INCWARREN CO SP SERVICES SCHOOL DIST

KEAN UNIVERSITY (*)MONTCLAIR STATE UNIVERSITY (*)NEW JERSEY CITY UNIVERSITY (*)NJ INSTITUTE OF TECHNOLOGY (*)ROWAN UNIVERSITY (*)RUTGERS UNIVERSITY (*)UNIV. OF MEDICINE & DENTISTRY - NEW BRUNSWICK (*)UNIV. OF MEDICINE & DENTISTRY - NEWARK (*)UNIV. OF MEDICINE & DENTISTRY - STRATFORD (*)WILLIAM PATERSON UNIVERSITY OF NJ (*)

ATLANTIC CO VOCATIONAL SCHOOLS (*)BERGEN CO VOCATIONAL SCHOOL BURLINGTON CO INSTITUTE OF TECH CAMDEN COUNTY TECHNICAL SCHOOLS (*)CAPE MAY CO TECHNICAL SCHOOL DIST CUMBERLAND CO BD OF VOC ED ESSEX CO VOCATIONAL SCHOOL GLOUCESTER CO VO-TECH SCHOOL DIST HUDSON CO SCHOOLS OF TECHNOLOGY HUNTERDON COUNTY VOCATIONAL (*)MERCER CO VOCATIONAL SCHOOLS MIDDLESEX CO VOCATIONAL SCHOOL (*)MONMOUTH CO VOCATIONAL SCHOOLS (*)MORRIS CO VOCATIONAL SCHOOL DISTRICT OCEAN COUNTY VOCATIONAL SCHOOL (*)PASSAIC CO VOCATIONAL SCHOOL





ABERDEEN TWP FIRE DIST 2 ABERDEEN TWP FIRE DISTRICT 1 (*)BORDENTOWN FIRE DISTRICT #1 (*)BORDENTOWN TWP FIRE DISTRICT 2 (*)BRICK TOWNSHIP FIRE DIST 2 BRICK TWP FIRE DISTRICT 1 BRICK TWP JOINT BOARD OF FIRE COMMISSION (*)BURLINGTON TWP FIRE DISTRICT 1 CHERRY HILL FIRE DISTRICT 13 CHESTERFIELD-HAM. FIRE DISTRICT #1 (*)CINNAMINSON TWP FIRE DIST #1 DELRAN TWP FIRE DISTRICT #1 (*)DEPTFORD TWP FIRE DISTRICT (*)DOVER TWP FIRE DISTRICT 2 EAST BRUNSWICK TWP FIRE DISTRICT #1 FLORENCE TWP. FIRE DISTRICT #1 GLOUCESTER TWP FIRE DISTRICT 2 GLOUCESTER TWP FIRE DISTRICT 3 (*)GLOUCESTER TWP FIRE DISTRICT 4 GLOUCESTER TWP FIRE DISTRICT 5 (*)GLOUCESTER TWP FIRE DISTRICT 6 (*)HADDON TWP FIRE DISTRICT 1 (*)HAMILTON TWP FIRE DISTRICT 2 (*)HAMILTON TWP FIRE DISTRICT 3 (*)HAMILTON TWP FIRE DISTRICT 4 (*)HAMILTON TWP FIRE DISTRICT 5 (*)HAMILTON TWP FIRE DISTRICT 6 (*)HAMILTON TWP FIRE DISTRICT 7 (*)HAMILTON TWP FIRE DISTRICT 8 (*)HAMILTON TWP FIRE DISTRICT 9 (*)HANOVER TWP FIRE DISTRICT 2 HANOVER TWP FIRE DISTRICT 3 HARRISON TOWNSHIP FIRE DISTRICT #1 HAZLET TOWNSHIP FIRE DISTRICT #1 HOPEWELL TWP FIRE DISTRICT 1 (*)HOWELL TWP FIRE DISTRICT 1 HOWELL TWP FIRE DISTRICT 2 HOWELL TWP FIRE DISTRICT 3 (*)HOWELL TWP FIRE DISTRICT 4 JACKSON BD FIRE DISTRICT 2 (*)JACKSON TWP FIRE DISTRICT 3 (*)JACKSON TWP FIRE DISTRICT 4 JERSEY CITY FIRE DEPARTMENTLAKEWOOD TWP FIRE DISTRICT 1 LAMBERTVILLE CITY FIRE DISTRICT #1 LINDENWOLD TWP FIRE DISTRICT 1 (*)MANALAPAN FIRE DISTRICT 2 MANALAPAN TWP FIRE DISTRICT 1 MANASQUAN BORO FIRE DISTRICT 1 MARLBORO TWP FIRE DISTRICT 1 MARLBORO TWP FIRE DISTRICT 3 MIDDLE TOWNSHIP FIRE DISTRICT #1 (*)MILLSTONE TOWNSHIP FIRE DISTRICT #1 (*)MONROE TWP FIRE DISTRICT 1 (*)

MONROE TWP FIRE DISTRICT 2 (*)MONROE TWP FIRE DISTRICT 3 (*)MONTVILLE TWP FIRE DISTRICT 1 (*)MONTVILLE TWP FIRE DISTRICT 3 (*)MOORESTOWN TWP FIRE DISTRICT 1 (*)MOORESTOWN TWP FIRE DISTRICT 2 MOUNT LAUREL FIRE DISTRICT #1 (*)NEPTUNE FIRE DISTRICT 1 (*)NORTH HUDSON REGIONAL FIRE & RESCUE OCEAN GROVE BOARD OF FIRE COMMISSION OCEAN TWP FIRE DISTRICT 1 (*)OCEAN TWP FIRE DISTRICT 2 (*)OLD BRIDGE TWP DISTRICT 1 OLD BRIDGE TWP FIRE DISTRICT 2 OLD BRIDGE TWP FIRE DISTRICT 3 (*)OLD BRIDGE TWP FIRE DISTRICT 4 PINE HILL FIRE DISTRICT 1 PINE HILL FIRE DISTRICT 1 PLAINSBORO TWP FIRE DISTRICT 1 (*)PLUMSTED FIRE DISTRICT #1 (*)RIVERSIDE TWP FIRE DISTRICT # 1 TOMS RIVER TWP FIRE DISTRICT 1 TOWACO FIRE DISTRICT 2 VOORHEES FIRE DISTRICT (*)WALL TOWNSHIP FIRE DISTRICT 2 WALL TOWNSHIP FIRE DISTRICT 3 WASHINGTON TWP BOARD OF FIRE COMMISSION WASHINGTON TWP FIRE DISTRICT #1 WESTVILLE FIRE DISTRICT # 1 WINSLOW TWP FIRE DISTRICT 1 (*)WOODBRIDGE BD OF FIRE COMMISSION 9 WOODBRIDGE FIRE DISTRICT 5 (*)WOODBRIDGE TWP FIRE DISTRICT 2 (*)WOODBRIDGE TWP FIRE DISTRICT #12 WOODBRIDGE TWP FIRE DISTRICT 1 (*)WOODBRIDGE TWP FIRE DISTRICT 11 WOODBRIDGE TWP FIRE DISTRICT 8 WOODBRIDGE TWP FIRE DISTRICT 7 (*)

ASBURY PARK HOUSING AUTHORITY (*)ATLANTIC CITY HOUSING AUTHORITY (*)BAYONNE HOUSING AUTHORITY (*)BELMAR HOUSING AUTHORITY BERGEN CO HOUSING AUTHORITY BERKELEY TWP HOUSING AUTHORITY (*)BEVERLY CITY HOUSING AUTHORITY (*)BOONTON HOUSING AUTHORITY (*)BRICK TWP HOUSING AUTHORITY (*)BRIDGETON CITY HOUSING AUTH (*)BUENA BORO HOUSING AUTH (*)BURLINGTON CITY HOUSING AUTH (*)CAMDEN CITY HOUSING AUTHORITY (*)CAPE MAY CITY HOUSING AUTHORITY (*)CARTERET HOUSING AUTHORITY (*)

CLEMENTON HOUSING AUTHORITY CLIFFSIDE PARK HOUSING (*)COLLINGSWOOD BORO HOUSING AUTH (*)DOVER TOWN HOUSING AUTHORITY EAST ORANGE HOUSING AUTHORITY (*)EDGEWATER HOUSING AUTHORITY (*)EDISON TWP HOUSING AUTHORITY (*)ELIZABETH CITY HOUSING AUTHORITY (*)ENGLEWOOD HOUSING AUTHORITY (*)FLORENCE TWP HOUSING AUTHORITY FORT LEE HOUSING AUTHORITY (*)FRANKLIN TWP HOUSING AUTHORITY FREEHOLD BORO HOUSING AUTHORITY (*)GARFIELD HOUSING AUTHORITY (*)GLASSBORO BOROUGH HOUSING AUTHORITY (*)GLOUCESTER CO HOUSING AUTHORITY (*)GLOUCESTER TWP HOUSING AUTHORITY (*)GUTTENBERG HOUSING AUTHORITY (*)HACKENSACK HOUSING AUTHORITY (*)HADDON TOWNSHIP HOUSING AUTHORITY (*)HARRISON TOWN HOUSING AUTHORITY HIGHLAND PARK HOUSING AUTHORITY (*)HIGHLANDS HOUSING AUTHORITY (*)HIGHTSTOWN BORO HOUSING AUTHORITY (*)HOBOKEN HOUSING AUTHORITY (*)IRVINGTON HOUSING AUTHORITY (*)JERSEY CITY HOUSING AUTHORITY (*)KEANSBURG BORO HOUSING AUTHORITY (*)LAKEWOOD HOUSING AUTHORITY LINDEN CITY HOUSING AUTHORITY (*)LODI HOUSING AUTHORITY (*)LONG BRANCH CITY HOUSING AUTHORITY (*)MADISON BORO HOUSING AUTHORITY MIDDLETOWN TWP HOUSING AUTHORITY (*)MILLVILLE HOUSING AUTHORITY MORRIS COUNTY HOUSING AUTHORITY MORRISTOWN HOUSING AUTHORITY (*)NEPTUNE CITY HOUSING AUTHORITY NEPTUNE TWP HOUSING AUTHORITY (*)NEW BRUNSWICK HOUSING AUTHORITY (*)NEWARK HOUSING AUTHORITY (*)NEWTON TOWN HOUSING AUTHORITY (*)NORTH BERGEN HOUSING AUTHORITY (*)OCEAN CITY HOUSING AUTHORITY (*)OLD BRIDGE HOUSING AUTHORITY ORANGE CITY HOUSING AUTHORITY (*)PASSAIC CITY HOUSING AUTHORITY (*)PATERSON HOUSING AUTHORITY (*)PENNS GROVE HOUSING AUTHORITY (*)PERTH AMBOY HOUSING AUTHORITY PHILLIPSBURG HOUSING AUTHORITY PLAINFIELD HOUSING AUTHORITY (*)PLEASANTVILLE HOUSING AUTHORITY (*)PRINCETON HOUSING AUTHORITY (*)


PARTICIPATING AGENCIES AND AUTHORITIES


SALEM CO VOCATIONAL SCHOOL (*)SOMERSET CO VOCATIONAL SCHOOL SUSSEX COUNTY VOCATIONAL UNION CO VOCATIONAL SCHOOLS (*)WARREN CO VOCATIONAL SCHOOL (*)




RAHWAY CITY HOUSING AUTHORITY (*)RED BANK BORO HOUSING AUTH (*)SALEM CITY HOUSING AUTHORITY (*)SAYREVILLE HOUSING AUTHORITY (*)SECAUCUS HOUSING AUTHORITYSOUTH AMBOY HOUSING AUTHORITY (*)TRENTON HOUSING AUTHORITY (*)UNION CITY HOUSING AUTHORITY (*)VINELAND HOUSING AUTHORITY WEEHAWKEN TWP HOUSING AUTHORITY (*)WEST NEW YORK HOUSING AUTHORITY WILDWOOD CITY HOUSING AUTHORITY (*)WOODBRIDGE HOUSING AUTHORITY (*)

CAMDEN CO HEALTH SERVICES CENTER ESSEX REGIONAL HEALTH COMMISSION (*)HUDSON REGIONAL HEALTH COMMISSION (*)MID BERGEN REGIONAL HEALTH COMMISSION (*)MIDDLE BROOK REGIONAL HEALTH COMMISSION (*)MONMOUTH CO HEALTH DEPARTMENT (*)MONMOUTH CO REGIONAL HEALTH COMMISSION 1 NORTHWEST BERGEN HEALTH COMMISSION (*)OCEAN CO BOARD OF HEALTH

MIDDLESEX CO JOINT HEALTH INSURANCE FUND MIDDLESEX CO MUNICIPAL JOINT INSURANCE FUND (*)NJ SCHOOL BOARD ASSOCIATION INSURANCE GROUP (*)STATEWIDE INSURANCE FUND BAYSHORE JOINTURE COMMISSION (*)MORRIS-UNION JOINTURE COMMISSIONSOUTH BERGEN JOINTURE COMMISSION

BURLINGTON COUNTY BRIDGE COMMISSIONCAPE MAY CO BRIDGE COMMISSION (*)ESSEX & UNION JOINT MEETING (*)MADISON-CHATHAM JOINT MEETING (*)SECOND RIVER JOINT MEETING

GENERAL ASSEMBLY (*)SENATE (*)

BEDMINSTER & FAR HILLS PUB LIBRARY (*)CHATHAM JOINT FREE PUBLIC LIBRARY (*)CHESTER BORO/TWP PUBLIC LIBRARY (*)ELIZABETH PUBLIC LIBRARY (*)HILLSIDE PUBLIC LIBRARY LINDEN CITY FREE PUBLIC LIBRARY MATAWAN ABERDEEN PUBLIC LIBRARY (*)MONTCLAIR LIBRARY (*)MORRISTOWN/MORRIS JOINT LIBRARY (*)ORANGE CITY LIBRARY PRINCETON JOINT PUBLIC LIBRARY (*)RAHWAY PUBLIC LIBRARY RIDGEWOOD PUBLIC LIBRARY (*)ROSELLE BOROUGH UNION TOWNSHIP LIBRARY WEST ORANGE LIBRARY (*)

ATLANTIC CITY CONVENTION CENTER (*)NJ PUBLIC BROADCASTING AUTHORITYNORTHWEST BERGEN CENTRAL DISPATCH (*)TRENTON DOWNTOWN ASSOCIATION

MIDDLESEX CO MOSQUITO EXTERMINATION COMMISSION MONMOUTH CO MOSQUITO EXTERMINATION COMM (*)OCEAN CO MOSQUITO COMMISSION (*)SALEM CO MOSQUITO COMMISSION (*)WARREN CO MOSQUITO EXTERMINATION COMMISSION

CAMDEN COUNTY PARK POLICE MERCER COUNTY PARK COMMISSION (*)MORRIS COUNTY PARK COMMISSION SOMERSET CO PARK COMMISSION

BAYONNE CITY PARKING AUTHORITY (*)BLOOMFIELD PARKING AUTHORITY (*)CAMDEN CITY PARK AUTHORITY (*)DOVER TWP PARKING AUTHORITY DUNELLEN PARKING AUTHORITY (*)EAST ORANGE PARKING AUTHORITY (*)ELIZABETH CITY PARKING AUTHORITY (*)FORT LEE PARKING AUTHORITY HACKETTSTOWN PARKING AUTHORITY HOBOKEN CITY PARKING AUTHORITY JERSEY CITY PARKING AUTHORITY (*)LONG BRANCH PARKING AUTHORITY (*)METUCHEN PARKING AUTHORITY MONTCLAIR PARKING AUTHORITY (*)MORRISTOWN PARKING AUTHORITY NEW BRUNSWICK PARKING AUTHORITY (*)NEWARK PARKING AUTHORITY NORTH BERGEN PARKING AUTHORITY NORTH PLAINFIELD PARKING AUTHORITY (*)PATERSON PARKING AUTHORITY (*)PERTH AMBOY CITY PARKING AUTHORITY RAHWAY PARKING AUTHORITY (*)SOUTH ORANGE TWP PARKING AUTHORITY (*)SOUTH RIVER PARKING AUTHORITY TRENTON PARKING AUTHORITY (*)UNION CITY PARKING AUTHORITY WEST NEW YORK PARKING AUTHORITY WEST WINDSOR PARKING AUTHORITY (*)

CAMDEN CO POLLUTION CONTROL FIN UNION CO POLLUTION CONTROL AUTHORITY WARREN CO POLLUTION CONTROL (*)

CARTERET PORT AUTHORITY PERTH AMBOY PORT AUTHORITY SALEM CITY MUNICIPAL PORT AUTHORITY (*)

ATLANTIC CO IMPROVEMENT AUTHORITY (*)BAYONNE LOCAL REDEVELOPMENT AGENCY (*)BERGEN COUNTY IMPROVEMENT AUTHORITY (*)BRIDGETON ZONE DEVELOPMENT AUTHORITY (*)CAMDEN CITY REDEVELOPMENT AGENCY CAMDEN CO IMPROVEMENT AUTHORITY CARTERET REDEVELOPMENT AGENCY (*)CUMBERLAND CO IMPROVEMENT AUTHORITY (*)ESSEX CO IMPROVEMENT AUTHORITY (*)GLOUCESTER CO IMPROVEMENT AUTHORITY GREATER WILDWOOD TOURISM IMP & DA (*)HUDSON CO ECONOMIC DEVELOPMENT CORPORATION HUDSON CO IMPROVEMENT AUTHORITY (*)JERSEY CITY REDEVELOPMENT AGENCY (*)MERCER CO IMPROVEMENT AUTHORITY (*)MIDDLESEX COUNTY IMPROVEMENT AUTHORITY PASSAIC COUNTY IMPROVEMENT AUTHORITY RAHWAY CITY REDEVELOPMENT AGENCY SALEM CO IMPROVEMENT AUTHORITY (*)SAYREVILLE ECONOMIC & REDEVELOPMENT AGENCY (*)SOUTH JERSEY ECONOMIC DEVELOPMENT DISTRICT (*)VINELAND-MILLVILLE URBAN ENTERPRISE ZONE (*)WILDWOODS JOINT CONSTRUCTION

CASINO REINVESTMENT DEVELOPMENT AUTHORITY (*)

COMPENSATION RATING & INSURANCE BUREAU (*)DELAWARE RIVER BASIN COMMISSION (*)DELAWARE RIVER JOINT TOLL BRIDGE COMMISSION DELAWARE RIVER PORT AUTHORITY ED INFORMATION & RESOURCE CENTER FORT MONMOUTH PLANNING AUTHORITY (*)INTERSTATE ENVIRONMENTAL COMMISSION (*)LAKE HOPATCONG COMMISSION (*)MEADOWLANDS CONSERVATION TRUST NJ BUILDING AUTHORITY (*)NJ COMMERCE & ECONOMIC GROWTH COMMISSION (*)NJ ECONOMIC DEVELOPMENT AUTHORITY (*)NJ EDUCATIONAL FACILITIES AUTHORITY (*)NJ FIREMENS HOME (*)NJ HEALTH CARE FACILITIES (*)NJ HOUSING & MORTGAGE FINANCE AGENCY (*)NJ MEADOWLAND COMMISSION (*)NJ REDEVELOPMENT AUTHORITY (*)NJ SCHOOLS DEVELOPMENT AUTHORITY (*)NJ SPORTS & EXPOSITION AUTHORITY NJ TRANSIT CORPORATION NJ TURNPIKE AUTHORITY NJ WATER SUPPLY AUTHORITY (*)NORTH JERSEY WATER SUPPLY COMMISSION PALISADES INTERSTATE PARK COMMISSION (*)PASSAIC VALLEY SEWERAGE COMMISSION PINELANDS COMMISSION (*)ROWAN UNIVERSITY FOUNDATION SOUTH JERSEY PORT CORPORATION SOUTH JERSEY TRANSPORTATION AUTHORITY WATERFRONT COMMISSION OF NY HARBOR (*)

JOINT DISPATCH AUTHORITY FOR SPRING LAKE

BERGEN COUNTY SOIL CONSERVATION DISTRICT (*)BURLINGTON CO SOIL CONSERVATION DISTRICT (*)CAMDEN CO SOIL CONSERVATION DISTRICT (*)CAPE ATLANTIC SOIL CONSERVATION DISTRICT (*)CUMBERLAND-SALEM CONSERVATION DISTRICT (*)FREEHOLD SOIL CONSERVATION DISTRICT (*)GLOUCESTER CO SOIL CONSERVATION DISTRICT (*)HUNTERDON CO SOIL CONSERVATION DISTRICT (*)MERCER CO SOIL CONSERVATION DISTRICT (*)MORRIS CO SOIL CONSERVATION DISTRICT (*)OCEAN CO SOIL CONSERVATION DISTRICT (*)SUSSEX CO SOIL CONSERVATION (*)WARREN CO SOIL CONSERVATION DISTRICT (*)

ATLANTIC HIGHLANDS-HIGHLANDS REGIONAL SEWERAGEAUTHORITY ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY (*)ATLANTIC CO UTILITIES AUTHORITY (*)BAYONNE MUNICIPAL UTILITIES AUTHORITY (*)BAYSHORE REGIONAL SEWERAGE AUTHORITY (*)BEACH HAVEN SEWERAGE AUTHORITY (*)BEACHWOOD SEWERAGE AUTHORITY BERGEN CO UTILITIES AUTHORITY BERKELEY TWP SEWERAGE AUTHORITY (*)BERKELEY TWP MUNICIPAL UTILITIES AUTHORITY (*)BERNARDS TWP SEWERAGE AUTHORITY (*)BEVERLY SEWERAGE AUTHORITY (*)BORDENTOWN SEWERAGE AUTHORITY (*)BRICK TWP MUNICIPAL UTILITIES AUTHORITY (*)BUENA BORO MUNICIPAL UTILITIES AUTHORITY (*)CAMDEN CO MUNICIPAL UTILITIES AUTHORITY CAPE MAY COUNTY MUNICIPAL UTILITIES AUTHORITY CARLSTADT SEWERAGE AUTHORITY CARNEYS POINT TWP SEWERAGE AUTHORITY


PARTICIPATING AGENCIES AND AUTHORITIES, Continued



CINNAMINSON SEWERAGE AUTHORITY CLINTON TWP SEWERAGE AUTHORITY (*)CUMBERLAND CO UTILITIES AUTHORITY (*)DELANCO SEWERAGE AUTHORITY (*)DELAWARE TWP MUNICIPAL UTILITIES AUTHORITY DELRAN SEWERAGE AUTHORITY (*)DEPTFORD TWP MUNICIPAL UTILITIES AUTHORITY (*)EAST WINDSOR MUNICIPAL UTILITIES AUTHORITY (*)EATONTOWN SEWERAGE AUTHORITY EDGEWATER PARK SEWERAGE AUTHORITY EGG HARBOR TWP MUNICIPAL UTILITIES AUTHORITY (*)ELK TOWNSHIP MUNICIPAL UTILITIES AUTHORITY EVESHAM MUNICIPAL UTILITIES AUTHORITY (*)EWING LAWRENCE SEWERAGE AUTHORITY (*)FLORHAM PARK SEW AUTHORITY FRANKLIN TWP SEWERAGE AUTHORITY (*)GLOUCESTER CO UTILITIES AUTHORITY GLOUCESTER TWP MUNICIPAL UTILITIES AUTHORITY (*)HACKETTSTOWN MUNICIPAL UTILITIES AUTHORITY (*)HAMILTON TWP MUNICIPAL UTILITIES AUTHORITY (*)HANOVER SEWERAGE AUTHORITY (*)HAZLET TWP SEWERAGE AUTHORITY (*)HILLSBOROUGH TWP MUN. UTILITIES AUTHORITY (*)HUDSON-ESSEX PASSAIC (*)JACKSON TWP MUNICIPAL UTILITIES AUTHORITY (*)JERSEY CITY INCINERATOR AUTHORITY JERSEY CITY MUNICIPAL UTILITIES AUTHORITY KEARNY MUNICIPAL UTILITIES AUTHORITY (*)LACEY MUNICIPAL UTILITIES AUTHORITY (*)LAKEWOOD TWP MUNICIPAL UTILITIES AUTHORITY (*)LAMBERTVILLE SEWERAGE AUTHORITY (*)LANDIS SEWERAGE AUTHORITY LEBANON BORO SEW AUTHORITY (*)LINDEN ROSELLE SEWERAGE AUTHORITY (*)LITTLE EGG HARBOR MUN. UTILITIES AUTHORITY (*)

LOGAN TWP MUNICIPAL UTILITIES AUTHORITY (*)LONG BRANCH SEWERAGE AUTHORITY (*)LOWER TWP MUNICIPAL UTILITIES AUTHORITY (*)MANASQUAN RIVER REGIONAL SEWERAGE AUTHORITIESMANCHESTER UTILITIES AUTHORITY MANTUA TWP MUNICIPAL UTILITIES AUTHORITY (*)MARLBORO TWP MUNICIPAL UTILITIES AUTHORITY (*)MERCHANTVILLE PENNSAUKEN WATER COMMISSION MIDDLESEX CO UTILITIES AUTHORITY MIDDLETOWN TWP SEWERAGE AUTHORITY (*)MONMOUTH CO BAYSHORE OUTFILL AUTHORITY (*)MONROE TWP MUN. UTILITIES AUTH. (GLOUCESTER) (*)MONTVILLE TWP MUNICIPAL UTILITIES AUTHORITY MOUNT HOLLY MUNICIPAL UTILITIES AUTHORITY MOUNT LAUREL TWP MUNICIPAL UTILITIES AUTHORITY MUSCONETCONG SEWERAGE AUTHORITY (*)NEPTUNE TWP SEWERAGE AUTHORITY (*)NORTH BERGEN MUNICIPAL UTILITIES AUTHORITY NORTH HUDSON SEWERAGE AUTHORITY (*)NORTHWEST BERGEN CO UTILITY AUTHORITY (*)OCEAN CO UTILITIES AUTHORITY (*)OCEAN GROVE SEWERAGE AUTHORITY OCEAN TWP MUNICIPAL UTILITY AUTHORITY OCEAN TWP SEWERAGE AUTHORITY (*)OLD BRIDGE MUNICIPAL UTILITY AUTHORITY PASSAIC COUNTY UTILITY AUTHORITY PASSAIC VALLEY WATER COMMISSION PEMBERTON TWP MUNICIPAL UTILITIES AUTHORITY (*)PENNS GROVE SEWERAGE AUTHORITY PENNSAUKEN SEWERAGE AUTHORITY (*)PENNSVILLE SEWERAGE AUTHORITY PEQUANNOCK, LINCOLN PARK &FAIRFIELD (*)PINE HILL BORO MUNICIPAL UTILITIES AUTHORITY PLAINFIELD AREA REGIONAL SEWER AUTHORITY (*)PLAINFIELD MUNICIPAL UTILITIES AUTHORITY

POMPTON LAKES MUNICIPAL UTILITIES AUTHORITY (*)RAHWAY VALLEY SEWERAGE AUTHORITY (*)RARITAN TWP MUNICIPAL UTILITIES AUTHORITY (*)READINGTON-LEBANON SEWERAGE AUTHORITY (*)RIVERSIDE SEW AUTHORITY ROCKAWAY VALLEY REGIONAL SEWER AUTHORITY (*)ROCKLEIGH BORO SEWERAGE AUTHORITY RUNNEMEDE SEWERAGE AUTHORITY SECAUCUS MUNICIPAL UTILITIES AUTHORITY SOMERS POINT SEWERAGE AUTHORITY SOMERSET RARITAN VALLEY SEWERAGE AUTHORITY (*)SOMERSET REGIONAL ANIMAL SHELTER (*)SOUTH MONMOUTH REGIONAL SEWERAGE AUTHORITY (*)SOUTH TOMS RIVER SEWERAGE AUTHORITY (*)SOUTHEAST MORRIS CO MUNI UTILITIES AUTHORITY (*)STAFFORD MUNICIPAL UTILITIES AUTHORITY STONY BROOK REGIONAL SEWERAGE AUTHORITY (*)SUSSEX CO MUNICIPAL UTILITIES AUTHORITY (*)TOMS RIVER TWP MUNICIPAL UTILITIES AUTHORITY (*)TWO RIVERS WATER RECLAMATION AUTHORITY (*)UNION CO UTILITIES AUTHORITY WANAQUE BOROUGH SEWERAGE AUTHORITY (*)WANAQUE VALLEY REGIONAL SEWERAGE AUTHORITY (*)WARREN CO MUNICIPAL UTILITIES AUTHORITY (*)WASHINGTON TWP MUN. UTILITIES AUTH. (MERCER) WASHINGTON TWP MUN. UTILITY AUTH. (GLOUCESTER) (*)WASHINGTON TWP MUN. UTILITIES AUTH. (MORRIS) (*)WATERFORD TWP MUNICIPAL UTILITIES AUTHORITY (*)W. MILFORD TWP MUNICIPAL UTILITIES AUTHORITY (*)WESTERN MONMOUTH UTILITIES AUTHORITY (*)WEYMOUTH TWP MUNICIPAL UTILITIES AUTHORITY WILLINGBORO MUNICIPAL UTILITIES AUTHORITY (*)WOODBINE MUNICIPAL UTILITIES AUTHORITY (*)WOODSTOWN SEWERAGE AUTHORITY WRIGHTSTOWN MUNICIPAL UTILITIES AUTHORITY (*)


PARTICIPATING AGENCIES AND AUTHORITIES, Continued


PARTICIPATING STATE DEPARTMENTS AND PENSION FUNDS

ALL NEW JERSEY STATE GOVERNMENT DEPARTMENTS AND THEIR ASSOCIATED DIVISIONS

THE FOLLOWING LOCATIONS PARTICIPATE IN THE STATE HEALTH BENEFITS PROGRAM ONLY:

ESSEX COUNTY PENSION FUND

HUDSON COUNTY PENSION FUND

JERSEY CITY PENSION FUND

UMDNJ PENSION FUND

CONTACTING THE DIVISION OF PENSIONS AND BENEFITS

The Division of Pensions and BenefitsWEB SITE address (URL) is . . . . . . . . . . . . . . . . . . . . . . . . . .www.state.nj.us/treasury/pensions

You can send E-MAIL to the Division of Pensions and Benefits through our HOME PAGE or directly to . . . . . . . . . . . . . . . . . . . . [email protected]

You can CONTACT theOFFICE OF CLIENT SERVICESof the Division of Pensions and Benefits at . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(609) 292-7524

Monday through Fridayfrom 7:30 a.m. until 4:30 p.m.

The telephone number for individuals who are hearing impaired and use a TELECOMMUNICATION DEVICE FOR THE DEAF (TDD) is . . . . . . . . . .(609) 292-7718

You can hear personalized information about your account within the retirement system including:loans, retirement benefits, purchase costs, and withdrawals 24 hours a day, seven days a week when using theAUTOMATED INFORMATION SYSTEM at . . . . . . . . . . . . . . . . . . . . . . . . . . . .(609) 292-7524You will need your Social Security number and a touch-tone phone to access the system.

You can WRITE to the Division of Pensions and Benefits at . . . . . . . . . . . . . . . . . . . . .Division of Pensions and Benefits

P.O. Box 295Trenton, NJ 08625-0295

You can VISIT the Division of Pensionsand Benefits on the FIRST FLOOR at . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 West State Street

in downtown Trenton, New Jersey Monday through Friday

from 7:40 a.m. until 3:30 p.m.

We are on the corner of West State and North Willow Streets, a block east of the State House.Directions to our offices are available on our Web site.

State of New JerseyDepartment of the Treasury

Division of Pensions and BenefitsP.O. Box 295

Trenton, NJ 08625-0295

DIVISION OF PENSIONS AND BENEFITS · Benefits Processing — TO provide benefits to clients in a...

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