CGFO Fin Adm

Sharpe ratio measures the volatitlity combing two risk elements, 1 return premiums compared to T-bill rate and 2 the portfolios' STANDARD DEVIATION of return.

A mesure of a portfolio's excess return relative to the toal variability of the portfolio.

Return in portfolio compared to its RISK.

NPO is Net Pension Obligation

FALSE

This automatically increase pension cost thru calculation of ARC.

Annual Required Contribution

An Actuarial Valuation is the process of assessing viability of PERS.

1.  Jurisdictions using funds

2.  Insufficient contributions to plans (ARC not being funded).

Other reason may be return on investments has decreased.

A pension plan obliging the sponsor to make specified dollar payments to qualify employees. Pension obligations are effectively the debt obligation of the plan sponsor.

DB guarantees employees fixed periodic payments.

2% x years of credited service x average final compensation.

Retirement income usually based on average income during last 3-5 years or 3-5 years highest salary.

1/12 of average annual compensation of the 5 best years of the last 10 years of credible service

Defined Contribution Plan is a pension plan where a sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants.

Like a 401K plan.

Defined Benefit Plan

Jensen Index is used to indicate if the fund manager outperformed the market.

ROE is an indicator of profitability.

Ratio of net income to total equity is the return of equity.

Common stockholder

How a company is using its money.

Determined by dividing the net income for the past 12 months by common stockholder equity (adjusted for stock splits)

Chapter 175 - Fire

Chapter 185 - Police

2% x years of credited service x average final compensation.

Retirement income usually based on average income during last 3-5 years or 3-5 years highest salary.

1/12 of average annual compensation of the 5 best years of the last 10 years of credible service

The State sets contribution rates for the FRS.

Yes, but can not be less.

Net Pension Obligation (NPO) occurs when Annual Retirement Contributions (ARC) are not funded.

NPO is the difference between employer required contribution vs actual contribution.

Fiduciary other peoples money!!!

Transactions on the Statemen to Activities is as additions and deductions.

• Five members
• -Two - Full-time firefighters ACTIVE
• -Two - legal residents appointed by a governing body
• -One - chosen by majority of the other four members

If plan is joint Fire & Police one full-time active fire and one full-time active police

Each serve 2 year term may succeed himself.

State excise tax is on real and personal property insurance 1.85%

State excise tax is on auto insurance

1. Not more thatn 5% in common stock or capital stock, not more than 5% of aggregate

2. Not more than 25% in foreign securities

3. Hire professional consultants.

Performance review every 3 years.

• Actuary
• Legal Counsel
• Technical Advisors
• Performance Review - every 3 years (at least)
• Money manager (may be more than one)
• Custodians - reports, pay retirees

• 10yrs - age 55
• 25 yrs - age 52

True