|Public Release Date: January 15, 1999||No. 99-2|
The Public Employees Retirement Association (PERA) administers pension funds that serve approximately 220,000 county, school, and local public employees, their survivors and dependents. Approximately 2,000 separate Minnesota government units participate in the retirement funds administered by PERA. These units include counties, cities, townships, and school districts.
The association administers three defined benefit funds. These funds provide retirement annuities and survivor and disability benefits to members. PERA also administers a defined contribution plan. The PERA Board of Trustees is responsible for administering these funds in accordance with state statutes. The board has a fiduciary obligation to PERA's members, the employers, and to the state. PERA assets at June 30, 1998, totaled approximately $13.3 billion for all of its retirement plans.
The primary objective of our audit was to render an opinion on PERA's financial statements. These financial statements are included in both PERA's and in the state of Minnesota's Comprehensive Annual Financial Report for fiscal year 1998. Our objective included determining whether PERA's financial statements presented fairly its financial position and results of operations in conformity with generally accepted accounting principles.
As part of our work, we gained an understanding of the internal control structure and ascertained whether PERA complied with laws and regulations that may have a material effect on its financial statements. During our audit, we gained an understanding of the contributions, annuities, refunds, Police and Fire Consolidation Fund mergers, and the financial statement preparation cycles.
PERA's Comprehensive Annual Financial Report for the year ended June 30, 1998, includes our qualified audit opinion dated December 1, 1998. PERA's financial statements were fairly presented; however, we qualified our report because sufficient audit evidence did not exist to verify PERA's disclosures with respect to the year 2000. We do not provide assurance that PERA is or will be year 2000 ready, that its year 2000 remediation efforts will be successful in whole or in part, or that parties with which PERA does business will be year 2000 ready. PERA designed internal controls to provide reasonable assurance that it properly administered its material financial activities, except that management needs to ensure that contributions to the Defined Contribution Plan are made in accordance with statutory specifications. PERA complied with material financial legal provisions for the items tested, except for the contributions to the Defined Contribution Plan.