Office of the Legislative Auditor - Financial Audit Division

Report Summary
Public Employees Retirement Association
Financial Statement Report

 

Financial Audit Division Report 09-04

Released February 13, 2009

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Conclusion

The Public Employees Retirement Association’s (PERA) financial statements were fairly stated in all material respects. However, PERA had some weaknesses in internal control over financial reporting as noted below.

Findings

• PERA did not have adequate controls to assure that employers reported and remitted the correct amount of wages and retirement contributions.
• PERA did not have adequate controls to ensure computer users’ access was appropriate on an ongoing basis, and it did not restrict access to some computer systems to eliminate incompatible duties.

Audit Scope

We audited PERA’s financial statements for the fiscal year ended June 30, 2008.

Background

PERA was established in 1931 by the Minnesota Legislature. It serves local governmental entities, including cities, counties, townships, and school districts located throughout the state. PERA administers four separate retirement funds consisting of three defined benefit plans and one defined contribution plan. In 2008, PERA served as a fiscal agent for the City of Duluth to track the investments placed in a trust for the city’s nonpension postemployment obligations. For financial reporting purposes, PERA is considered a pension trust fund of the State of Minnesota.

PERA had net assets totaling approximately $18 billion at June 30, 2008. For the year ended June 30, 2008, they received contributions of about $750 million and paid benefits and refunds of over $1.1 billion.