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					N E W M E X I C O M A G I S T R AT E R E T I R E M E N T F U N D
ANNUAL ACTUARIAL VALUATION
JUNE 30, 2009
November 5, 2009



The Retirement Board
Public Employees Retirement Association
Santa Fe, New Mexico

Ladies and Gentlemen:

This report contains the results of an actuarial valuation of the statutory obligations associated with benefits
provided by the New Mexico Magistrate Retirement Fund and their relationship to the Fund's contribution
resources.

The valuation was made as of June 30, 2009 using financial and individual people information furnished by the
Public Employees Retirement Association.

The report is divided into sections as follows:

          Section 1 - Purpose of the Valuation, Valuation Results, Comments and Conclusions
          Section 2 - Summary of Benefit Provisions, Financial and People Information
          Section 3 - Description of Actuarial Cost Methods, Summary of Estimates of Future Fiscal
                      and People Activities, and Definitions of Technical Terms
          Section 4 - Information for Governmental Accounting Standards Board Statement No. 25

CERTIFICATION: To the best of our knowledge and belief, the actuarial valuation is complete and
accurate and the techniques and assumptions used are reasonable. Several inconsistencies with the data
provided this year compared to previous years’ data were identified. System staff is continuing to work to
resolve these inconsistencies. All significant benefits and expenses expected to be paid from Fund assets are
included in the actuarial present values and contribution requirements. The estimates of future Fund activities
(actuarial assumptions) take into account the net effect of all known events and trends which would, if
ignored, have a material effect on future contribution requirements.

One or more of the undersigned are Members of the American Academy of Actuaries (MAAA) as indicated
and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion
contained herein.

Respectfully submitted,




Kenneth G. Alberts




David T. Kausch, FSA, EA, MAAA

KGA:bd
1746
SECTION 1
P U R P O S E O F VA L U AT I O N
VA L U AT I O N R E S U LT S
COMMENTS AND CONCLUSIONS
New Mexico Magistrate Retirement Fund                                                                    Section 1




                           PURPOSE OF THE ACTUARIAL VALUATION

The statutory obligations of the Retirement Fund are:

        pension payments to current and future retired magistrates, vested former magistrates and
        survivor pension beneficiaries

        administrative and investment expenses incurred in the operation of the Retirement Fund


The sources of funding to meet the statutory obligations are:

        9.0% of salary by members

        9.5% of salary by the employers

        a portion of Magistrate Court civil case docket and jury fees

        investment earnings on Magistrate Retirement Fund assets


The portion of docket and jury fees is fixed by statute.

The basic funding objective of the Fund is to avoid transfers of the cost of statutory obligations between
generations of taxpayers. This objective will be realized if the sources of funding are sufficient to:


        fund costs allocated to the current year on account of service rendered by magistrates in the
        current year (Normal Cost).

        fund over a 30-year period costs allocated to prior years on account of service rendered by
        magistrates in prior years (Unfunded Actuarial Accrued Liability). This is in accordance
        with the funding objective set by the PERA Board in October of 1996.


The actuarial valuation measures the relationship between the statutory obligation and funding resources to
determine if the funding objective is being met.




 Gabriel Roeder Smith & Company                                                                               1
New Mexico Magistrate Retirement Fund                                                           Section 1




                          RESULTS OF THE ACTUARIAL VALUATION



STATUTORY OBLIGATIONS
The actuarial present value of the statutory obligations of the New Mexico Magistrate Retirement Fund was
calculated to be $56,329,094 for covered persons as of June 30, 2009. The funding value of assets totaled
$31,524,204.

                                                                  Present Value of
                                                  Actuarial           Future             Total
                                                  Accrued             Normal           Actuarial
                                                  Liability            Cost          Present Value

    Retired Magistrates                         $ 29,327,794         $           -      $29,327,794
    Vested Former Magistrates                      3,099,779                     0        3,099,779
    Active Magistrates                            15,140,031             8,761,490       23,901,521

    Total Actuarial Obligation                  $ 47,567,604         $   8,761,490      $56,329,094

    Less Funding Value of Assets                    31,524,204

    Unfunded Actuarial Accrued Liability        $ 16,043,400

    Funded Ratio                                        66.3%


The funding value of assets is a smoothed market value. Please refer to page 13.




 Gabriel Roeder Smith & Company                                                                       2
New Mexico Magistrate Retirement Fund                                                                    Section 1



                  STATUTORY OBLIGATIONS AND SOURCES OF FUNDING
                                 JUNE 30, 2009


                                                                    Future Employer
                                                                    Normal Cost plus
                                                                   Unfunded Actuarial
                                                                   Accrued Liability#
                                                                          30%




                                                                                   Future Member
                                                                                    Contributions
                                                                                         4%

                      Present Assets
                           66%




                                                   Sources of Funds



    # Current statutory employer contributions are insufficient to cover this obligation.



                                              To Future Retirees
                                             for Service Already
                                                  Rendered
                                                     27%
                                                                                    To Future Retirees
                                                                                       for Service
                                                                                     Expected to be
                       To Present Vested                                                Rendered
                       Inactive Members                                                   16%
                               5%




                                                       To Present Retirees
                                                              52%



                                                      Uses of Funds




 Gabriel Roeder Smith & Company                                                                               3
 New Mexico Magistrate Retirement Fund                                                                              Section 1




                        FUNDING OBJECTIVE CONTRIBUTION REQUIREMENT
 The contribution required for the 2009/2010 fiscal year to finance the normal cost and amortize the unfunded
 actuarial accrued liability over 30 years is shown in the following schedule. The statutory contribution
 resources are also shown.

       Computed Contributions for Funding Objective versus Statutory Contributions
                             For the July 1, 2009 / June 30, 2010 Fiscal Year

                                                                                                           Dollars Based on
                                                                             Percent of                     Val. Payroll of
                                                                          Payroll of Present                 $4,128,599,
                        Contributions for                                   Magistrates                       Projected#

Normal Cost

  Age & service pensions                                                           33.04 %                 $ 1,425,473
  Pre-retirement survivor pensions                                                  1.97                        84,993
  Disability pensions                                                               0.00                              0
  Refund of member contributions                                                     0.35                       15,100
Total Normal Cost                                                                  35.36 %                    1,525,566

Unfunded Actuarial Accrued Liability -
financed as a level percent of projected
payroll over a period of 30 years                                                  19.94 %                     860,289

Total Required Contributions (30-year amortization)                                55.30 %                 $ 2,385,855

Total Statutory Contributions
  Docket and Jury Fees*                                                            14.17 %                     611,203
  Employer Contributions                                                            9.50                       409,867
  Member Contributions                                                              9.00                       388,295

Total Statutory Contributions                                                      32.67 %                 $ 1,409,365

   *    Based on reported 2008/2009 fiscal year income and 6/30/2009 valuation payroll.
   #    Dollars based on valuation payroll projected to next year. Projection factor is currently 1.045.




   Gabriel Roeder Smith & Company                                                                                         4
New Mexico Magistrate Retirement Fund                                                                                Section 1



               COMPUTED CONTRIBUTION VERSUS ACTUAL CONTRIBUTION
                            THE HISTORICAL RECORD
                   Valuation                                                                      Contribution Rates
 Fiscal              Year             Valuation                 Dollar Contribution                as a % of Payroll
 Year               June 30            Payroll                 Computed      Actual             Computed        Actual

 87/88                 --             $1,622,315               $ 571,542 $ 576,856                 35.23 %          35.56 %
 88/89                1988 *           2,109,926                 688,515   526,820                 35.23            24.97
 89/90                1989 **          2,193,807                 739,971   587,312                 35.23            26.77
 90/91                1990             2,861,652                 952,072   601,823                 35.23            21.03
 91/92                1991             3,109,151               1,030,062   612,680                 35.23            19.71
 92/93                1992              3,064,151               1,021,589        914,852           35.23            29.86
 93/94                1993              3,202,500               1,060,349      1,224,183           33.11            37.72
 94/95                1994              3,245,662 ##            1,083,401      1,349,868           33.38            41.59
 95/96                1995              3,500,829               1,183,981      1,383,397           33.82            39.52
 96/97                1996              3,361,667               1,113,384      1,252,639           33.12            37.26
 97/98                1997 @            3,178,106               1,027,164      1,235,793           32.75            38.89
 98/99                1998              3,136,017                 942,373      1,238,688           30.05            39.50
 99/00                1999 ***          3,263,639                 880,529      1,120,748           25.70            32.71
 00/01                2000 ***          3,485,366                 869,380      1,477,130           23.76            40.36
 01/02                2001              3,650,670                 963,469      1,339,240           25.13            34.94
 02/03                2002              3,996,832               1,111,996      1,347,811           26.50            32.12
 03/04                2003 ###          3,081,850               1,056,146        928,011           32.64            28.68
 04/05                2004 ***          3,002,422               1,102,213        935,027           34.64            29.66
 05/06                2005              3,196,052               1,227,334      1,057,722           36.57            31.52
 06/07                2006              3,149,560               1,191,912      1,205,943           36.04            36.47
 07/08                2007              3,464,587               1,302,702      1,365,168           35.81            37.53
 08/09                2008              3,363,342               1,414,664      1,307,696           40.25            37.21
 09/10                2009              4,128,599               2,385,855                          55.30            32.67 #

          * No report issued. Valuation includes revision of estimates of future Fund activities (actuarial assumptions).
      ** Amortization period for unfunded actuarial accrued liability was reduced to 40 years from 50 years, consistent
         with objective established by the Retirement Board for PERA.
     *** Dollars based on projected valuation payroll to account for pay increases effective 7/1.
          -- Projected from June 30, 1985 valuation results.
          # Estimate based on fiscal year docket and jury fees and valuation year payroll.
      ## Reported payroll was $3,132,878. Valuation payroll was adjusted to account for the portion of pay increases
         effective 1/1/94 not included in the active member data.
     ### Metropolitan Judges transferred into the Judicial Retirement Fund.
      @ Amortization period for unfunded actuarial accrued liability was reduced to 30 years from 40 years, consistent
        with objectives established by the Retirement Board for PERA.


 Gabriel Roeder Smith & Company                                                                                             5
New Mexico Magistrate Retirement Fund                                                                            Section 1




                         DEVELOPMENT OF EXPERIENCE GAIN (LOSS)
                               YEAR ENDED JUNE 30, 2009

Actual experience will never (except by coincidence) coincide exactly with assumed experience. It is
expected that gains and losses will cancel each other over a period of years, but sizable year-to-year
fluctuations are common. Detail on the derivation of the experience gain (loss) is shown below:




         (1) UAAL* at start of year                                                            $       2,854,825

         (2) Normal cost                                                                               1,261,423

         (3) Actual contributions (employer, member, and docket fees)                                  1,307,696

         (4) Interest accrual                                                                           226,535

         (5) Expected UAAL before changes: (1) + (2) - (3) + (4)                                       3,035,087

         (6) Change from benefit improvements                                                                   0

         (7) Change in method                                                                                   0

                                           #
         (8) Change from assumptions                                                                    581,776

         (9) Expected UAAL after changes: (5) + (6) + (7) + (8)                                        3,616,863

        (10) Actual UAAL at end of year                                                              16,043,400

        (11) Gain (loss): (9) – (10)                                                           $    (12,426,537)

        (12) Gain (loss) as percent of actuarial accrued liability at start of year
             ($41,721,278)                                                                             (29.78)%

     * Unfunded actuarial accrued liability.
     #
       Change in mortality rates pursuant to PERA 4-year experience study. Also includes small change in liabilities due to
       the change in member contributions.




 Gabriel Roeder Smith & Company                                                                                        6
  New Mexico Magistrate Retirement Fund                                                               Section 1




COMMENT A:            In aggregate, Retirement Fund experience was less favorable than expected for the year
                      ending June 30, 2009. The primary sources of experience losses were losses related to data
                      adjustments and a rate of return on the funding value of assets less than the long-term
                      assumption [(16.2)% vs. 8.0%] and retired and deferred experience.

                      Aggregate experience resulted in a loss of $12,426,537 or approximately 29.78% of
                      beginning of year accrued liabilities.

                      Of the $12.4 million loss, approximately $9.3 was due to investment losses. The rest was
                      due to data issues including 2 new active members with prior service and 2 new retired
                      members that were not reported in last year’s data.

COMMENT B:            As of June 30, 2009, the funding status of the plan was 66.25%, down from the year
                      before.


COMMENT C:            The principal source of Retirement Fund obligations are the pensions being paid and
                      accruing to magistrates and their dependents. Pensions are directly related to magistrate
                      payroll. The sources of contribution revenue to the Retirement Fund are 9.0% of salary by
                      the magistrates, 9.5% of salary by the employers, and a portion of docket and jury fee
                      revenue. Docket and jury fee revenue continues to account for almost 50% of contribution
                      revenue and is related to the volume of activity in magistrate courts and the willingness of
                      the legislature to increase future unit fees. Historically, there has been a poor correlation
                      between docket fee revenue and magistrate payroll.



COMMENT D:            The assumed rates of mortality used in the June 30, 2009 were changed from the prior
                      valuation pursuant to the July 1, 2004 – June 30, 2008 PERA Experience study dated June
                      10, 2009.
                      Also, employee contributions were increased from 7.50% to 9.00% of payroll while
                      employer contributions were decreased from 11.00% to 9.50% of payroll for the 2-year
                      period beginning July 1, 2009.

                      These changes resulted in an increase in the unfunded actuarial liability of approximately
                      $0.58 million.




    Gabriel Roeder Smith & Company                                                                         7
  New Mexico Magistrate Retirement Fund                                                             Section 1



COMMENT E:            The number of reported active members increased by 20% (from 45 to 54). As a result,
                      total payroll has also increased by 23% compared with a 4.5% expected increase. This has
                      had the effect of substantially decreasing the docket fees as a percent of payroll.



COMMENT F:            The amortization period of the unfunded actuarial accrued liability (UAAL) based on the
                      statutory contribution is infinite for the second year in a row since 2008. The Board
                      adopted a policy on recommended contribution rate changes in this circumstance. On a
                      market value basis, the contribution rate needed to amortize the UAAL over 30-years
                      (with a margin) is 62.83% of payroll. This is 30.16% of payroll higher than the statutory
                      contributions. The Board policy recommends the increase in contribution rate be phased
                      in over a period of no more than 5 years.


COMMENT G:            There is currently a negative non-investment cash flow (benefits minus contributions) of
                      over $1 million. If future investment income is, on average, sufficient to cover the future
                      growth of this amount, this fund will become insolvent (be unable to meet cash flow) in
                      20 to 25 years if the contribution deficiency is not addressed. Only 2 years ago, this fund
                      was 100.7% funded. In 2 short years it has dropped to 66.3%. In addition, the retiree
                      liability is less than 90% funded on a market value basis as of June 30, 2009.


RECOMMENDATION:       We recommend that all employer contributions be related to payroll and that the employer
                      contribution rate be increased by 30% of payroll. Moreover, we recommend that serious
                      action be taken to mitigate this fund’s deficiencies within the next couple of years.




    Gabriel Roeder Smith & Company                                                                       8
New Mexico Magistrate Retirement Fund                                                                        Section 1




                         UNFUNDED ACTUARIAL ACCRUED LIABILITY
                         COMPARISON WITH PREVIOUS VALUATION



                                                                     June 30, 2009               June 30, 2008

   A. Actuarial present value of future benefits                 $     56,329,094               $    49,378,170

   B. Actuarial present value of future normal costs                    8,761,490                     7,656,892

   C. Actuarial accrued liability                                      47,567,604                    41,721,278

   D. Funding value of assets*                                         31,524,204                    38,866,453

   E. Unfunded actuarial accrued liability                       $     16,043,400               $     2,854,825




  * The asset value which is being used for actuarial valuations of the Magistrate Retirement Fund is a smoothed market
    value. This method spreads the annual differences between actual and assumed investment earnings over a closed
    period of 4 years. Smoothed market values were first implemented with the June 30, 1991 valuation.




 Gabriel Roeder Smith & Company                                                                                    9
SECTION 2
S U M M A RY O F B E N E F I T P R O V I S I O N S ,
F I N A N C I A L A N D P E O P L E I N F O R M AT I O N
New Mexico Magistrate Retirement Fund                                                                 Section 2



                    RETIREMENT CONDITIONS AND BENEFITS EVALUATED
                                   (JUNE 30, 2009)

Membership
Includes all magistrates. Magistrates with service prior to the effective date of the Magistrate Retirement
Fund (1984) may elect to remain under the provisions of PERA and forfeit any benefits payable under the
Magistrate Retirement Fund. The irrevocable election must have been made prior to July 1, 1984.


Voluntary Retirement
A magistrate may voluntarily retire: (1) at age 64 with 5 or more years of service; (2) at age 60 with 15 or
more years of service; or (3) at any age with 24 or more years of service. Magistrates with one or more
years of service in PERA, ERA or JRA may combine service credits to satisfy these voluntary retirement
conditions.


Final Average Salary
The magistrate's salary received during the last 1 year in office prior to retirement.


Retirement Pension
Annual pension is 37.5% of final average salary (FAS) plus 3.75% of FAS for each year of service in excess
of 5 years. Maximum is 75% of FAS (15 or more years of service).


Survivor's Pension - Retired Magistrates
The surviving spouse of a retired magistrate receives a pension of 75 percent of the magistrate's pension until
death. Pension is payable to deceased magistrate's minor and dependent children if there is no eligible
surviving spouse.


Survivor's Pension - Active Magistrates
Applicable if magistrate had 5 or more years of magistrate service. The surviving spouse would receive 75
percent of the magistrate's vested pension until death. Pension is payable to deceased magistrate's minor and
dependent children if there is no eligible surviving spouse.




  Gabriel Roeder Smith & Company                                                                          10
New Mexico Magistrate Retirement Fund                                                                      Section 2



                        RETIREMENT CONDITIONS AND BENEFITS EVALUATED
                                              (JUNE 30, 2009)
Disability
Applicable if magistrate has 5 or more years of magistrate service and becomes incapacitated to perform
duties of office. Magistrate would receive vested pension. Five year service requirement is waived if the
disability is duty-related.


Deferred Retirement Pension (Vested Retirement)
If magistrate service terminates after 5 years of such service, the magistrate and spouse retain entitlement to
benefits of the fund.

Annual pension is: 37.5% of FAS plus 3.75% of FAS for each year of service in excess of 5 years.
Maximum is 75% of FAS (15 or more years of service).

Payment of the magistrate's pension commences at age 60 years if the magistrate has 15 or more years of
service; or at age 64 years if the magistrate has 5 or more years of service but less than 15 years of service.


Post-Retirement Pension Adjustments
Pensions are increased 3% annually with the first increase effective on the July 1 following (i) 2 years of
retirement or (ii) 1 year of retirement if age 65 has been attained or the retirement is disability related.


Member Contributions
Members contribute 9.0% of salary for fiscal years 2010 and 2011 and 7.5% thereafter.


Refund of Judge’s Contributions
If a magistrate leaves service or dies and no pension becomes payable, the accumulated contributions are
refunded or paid to the designated beneficiary.


Public Payments
$25.00 from each civil action docket fee and $10 from each civil jury fee paid in the magistrate court.
Statutory employer contributions are 9.5% of salary for fiscal years 2010 and 2011 and 11% thereafter.




  Gabriel Roeder Smith & Company                                                                               11
New Mexico Magistrate Retirement Fund                                                                    Section 2



              ACCOUNTING INFORMATION SUBMITTED FOR VALUATION
                                  REVENUES AND EXPENDITURES
                                                                       Year Ended June 30
                                                                     2009              2008
        Market Value Beginning of Year                        $ 36,332,845          $ 40,624,570
        Revenues:
         a. Member Contributions                                      307,516                286,883
         b. Employer Contributions
              Docket Fees                                             611,203                629,957
              Other                                                   388,977                448,328
         c. Investment Income
              Adjustment of Investment to Market Value           (4,253,699)               (7,106,119)
              Net Realized Gain/Loss                             (4,888,954)                3,151,346
              Other                                                 282,851                   829,670
         d. Other                                                       116                    18,485

          e. Total Revenues                                      (7,551,990)               (1,741,450)
        Expenditures:
         a. Benefits Paid                                            2,447,739             2,293,969
         b. Refunds of Member Contributions                                  0                20,401
         c. Administrative Expenses                                     62,946                94,757
          d. Total Expenditures                                      2,510,685             2,409,127
        Audit Adjustment                                                     0              (141,148)
        Market Value End of Year                              $ 26,270,170          $ 36,332,845

                                        SUMMARY OF ASSETS
                                                                         6/30/2009
                                                                        Market Value
                   Cash & Receivables                                    $     533,067
                   Short Terms & Accruals                                    3,930,801

                   US Gov't., Agency Securities, & Municipal Bonds           3,683,981
                   Corporate Bonds                                           3,560,039
                   Corporate Stocks                                          8,598,812
                   International Stocks                                      4,531,654
                   Venture Capital and Partnerships                          2,596,087
                   Securities Lending Collateral Investments                 2,233,375
                   Other Investments                                           953,373

                   Accounts Payable                                          (4,351,019)

                   Net Assets                                           $ 26,270,170

 Gabriel Roeder Smith & Company                                                                              12
 New Mexico Magistrate Retirement Fund                                                                                                  Section 2


                               DERIVATION OF FUNDING VALUE OF RETIREMENT FUND ASSETS
                                                                                  Fiscal Years Ending June 30:
                                                        2004          2005            2006          2007           2008          2009
  A. Funding Value Beginning of Year                 $29,629,462 $30,071,628 $31,303,435 $33,694,422 $37,241,628 $38,866,453
  B. Market Value End of Year                         30,201,556 32,365,257 35,394,514 40,624,570 36,332,845 26,270,170
  C. Market Value Beginning of Year                   26,368,248 30,201,556 32,365,257 35,394,514 40,624,570 36,332,845
  D. Non-Investment Net Cash Flow                       (663,219)     (689,193)       (680,529)     (957,711)      (949,202)   (1,140,043)
   E. Investment Income
      E1. Market Total: B - C - D - G                  4,496,527     2,852,894       3,709,786     6,187,767     (3,201,375) (8,922,632)
      E2. Amount for Immediate Recognition (8.0%)      2,343,828     2,378,163       2,477,054     2,657,245      2,941,362    3,063,715
      E3. Amount for Phased-In Recognition: E1-E2      2,152,699       474,731       1,232,732     3,530,522     (6,142,737) (11,986,347)
   F. Phased-In Recognition of Investment Income
      F1. Current Year: 0.25 x E3                        538,175       118,683         308,183      882,631      (1,535,684)   (2,996,587)
      F2. First Prior Year                              (370,579)      538,175         118,683      308,183         882,631    (1,535,684)
      F3. Second Prior Year                             (743,442)     (370,579)        538,175      118,683         308,183       882,631
      F4. Third Prior Year                              (662,597)     (743,442)       (370,579)     538,175         118,683       308,183
     F5. Total Recognized Investment Gain             (1,238,443)     (457,163)       594,462      1,847,672       (226,187)   (3,341,457)
  G. Audit Adjustment                                          0             0               0             0       (141,148)            0
  H. Transfer to Judicial Retirement Fund                      0             0               0             0              0             0
   I. Preliminary Funding Value: A + D + E2 + F5      30,071,628    31,303,435      33,694,422    37,241,628     38,866,453    37,448,668
   J. Application of 20% Corridor
      J1. Minimum Funding Value: 80% x B                                                                         29,066,276    21,016,136
      J2. Maximum Funding Value: 120% x B                                                                        43,599,414    31,524,204
      J3. Corridor Adjustment                                                                                             0    (5,924,464)
      J4. Funding Value End of Year: H + I3                                                                      38,866,453    31,524,204
  K. Funding Value as Percent of Market Value: I/B         99.6%         96.7%           95.2%         91.7%        107.0%        120.0%
Asset information was furnished by PERA prior to availability of audited financial statements and may differ from information contained in the
audited financial statements.

Gabriel Roeder Smith & Company                                                                                                                 13
 New Mexico Magistrate Retirement Fund                                                                                                      Section 2


                                             VALUATION ASSETS - HISTORICAL COMPARISON
                                     Revenues                                           Expenses
 Year Ended Assets Beginning               Investment                         Retirement     Administrative             Funding Value     Assets
  June 30       of Year      Contributions   Income                            Benefits         Expenses                Adjustment**     Year End

    1991         $ 4,326,282             $     601,823 $ 382,385 $ 50,410         $                            8,650     $    (9,039)   $ 5,242,391
    1992           5,242,391                   612,680     469,996     78,209                                  9,406          97,331      6,334,783
    1993           6,334,783                   914,852     499,184    152,940                                 12,923         131,298      7,714,253
    1994           7,714,254                 1,224,183     517,518    228,476                                 12,158         276,313 #    9,491,634
    1995           9,491,634                 1,349,868     592,601    411,603                                 13,685         603,777     11,612,592
    1996          11,612,592                 1,383,397     569,037    550,958                                 10,209       1,064,052     14,067,911
    1997          14,067,911                 1,252,639   1,196,022    653,661                                  7,634         822,325 ##  16,677,602
    1998          16,677,602                 1,235,793   1,857,667    736,380                                  7,588       1,961,073     19,988,167
    1999          19,988,167                 1,238,668   3,987,153    935,147                                 10,851        (899,286)    23,368,704
    2000          23,368,704                 1,120,748   2,982,835  1,065,140                                108,333         798,561     27,097,375
    2001          27,097,375                 1,477,130  (1,611,736) 1,135,989                                 66,889       4,498,204     30,258,095
    2002          30,258,095                 1,339,240  (1,536,685) 1,199,002                                 67,477       3,245,417     32,039,588
    2003          32,039,588                 1,347,811     150,094  4,753,101 ###                             63,146         908,216     29,629,462
    2004          29,629,462                   928,011   3,549,509  1,591,230                                 53,936      (2,390,188)    30,071,628
    2005          30,071,628                   935,027   2,015,587  1,624,220                                 80,772         (13,815)    31,303,435
    2006          31,303,435                 1,057,722   2,746,825  1,738,251                                104,986         429,677     33,694,422
    2007          33,694,422                 1,205,943   1,255,236  2,163,654                                 94,907       3,344,588     37,241,628
    2008          37,241,628                 1,365,168  (3,936,288) 2,314,370                                 94,757       6,605,072     38,866,453
    2009          38,866,453                 1,307,696  (8,859,686) 2,447,739                                 62,946       2,720,426     31,524,204
    **   A smoothed market value was used beginning with the June 30, 1991 actuarial valuation.
     #   Includes a post '93 valuation audit adjustment of $78,971.
    ##   Includes a post ‘96 valuation audit adjustment of $(2,101,581).
   ###   Includes an estimated asset transfer of $ 3,290,962 to the Judicial Retirement Fund for Metropolitan Judges.


Gabriel Roeder Smith & Company                                                                                                               14
 New Mexico Magistrate Retirement Fund                                                     Section 2



                               RECONCILIATION OF MEMBERSHIP
                            FOR THE PLAN YEAR ENDED JUNE 30, 2009



                                                    Vested             Pension Recipients
                                         Active   Terminated   Service   Disability       All
                                     Members       Members     Retired    Retired     Beneficiaries


No. at Start of Year                       45         19          50           2             4

Increase (Decrease) From
    Service Retirement                                (3)          3
    Disability Retirement
    Deaths                                                        (2)                        2
    Other Terminations
    Vested Terminations                                1
    Non-Vested Terminations
    New Entrants/Rehires                    9         (4)
    Data Corrections                                  (1)          2

No. at End of Year                         54         12         53            2             6




   Gabriel Roeder Smith & Company                                                                15
New Mexico Magistrate Retirement Fund                                                                        Section 2




Active magistrates included in the valuation totaled 54, involving a valuation payroll of $4,128,599.

    Valuation                                                                   Average
      Date    Active            Valuation                                           Magis.            Total
     June 30 Magis.              Payroll            Salary            Age           Service          Service
       1995    63              $ 3,500,829         $ 55,569           50.1   yrs.     5.4 yrs.          7.5 yrs.
       1996    62                3,361,667           54,220           51.0            6.3               9.4
       1997    58                3,178,106           54,795           51.2            6.9               9.6
       1998    57                3,136,017           55,018           51.0            7.4              10.4
       1999    59                3,263,642           55,316           49.3            6.1               9.3
       2000    60                3,485,366           58,089           50.1            6.4              10.1
       2001    61                3,650,670           59,847           50.9            7.2              10.5
       2002    63                3,996,832           63,442           51.3            7.4              11.0
       2003#   52                3,081,850           59,266           51.5            5.3               8.2
       2004    50                3,002,422           60,048           52.8            5.6               8.6
       2005    50                3,196,052           63,921           52.8            6.7               7.2
       2006    50                3,149,560           62,991           53.6            6.9               7.7
       2007    52                3,464,587           66,627           53.7            5.9               7.8
       2008    45                3,363,342           74,741           54.0            7.1               9.3
       2009    54                4,128,599           76,456           54.4            7.3              10.2
# 15 Metropolitan Judges transferred into the Judicial Retirement Fund.

Retired magistrates and beneficiaries included in the valuation totaled 61, involving total annual benefits of
$2,546,555.

              Valuation                                                                Average
                Date    Retired                  Annual                          Annual
               June 30 Magistrates              Pensions         Liability      Pensions     Age
                 1995               23         $ 571,902 $ 6,568,372 $ 24,865                    68.3 yrs.
                 1996               22           550,642   6,272,724   25,029                    68.9
                 1997               26           704,576   7,924,060   27,099                    69.1
                 1998               27           759,609   8,513,562   28,134                    69.8
                 1999               35         1,079,080 12,209,396    30,831                    69.2
                 2000               35         1,113,919 12,776,549    31,826                    69.7
                 2001               36         1,149,365 13,659,061    31,927                    70.3
                 2002               37         1,234,244 14,056,788    33,358                    70.3
                 2003               46         1,594,404 18,728,541    34,661                    69.3
                 2004               44         1,647,239 19,465,866    37,437                    69.7
                 2005               44         1,657,108 19,498,351    37,662                    70.3
                 2006               48         1,824,031 21,057,235    38,001                    70.5
                 2007               55         2,174,981 25,128,887    39,545                    70.5
                 2008               56         2,256,196 25,590,320    40,289                    71.4
                 2009               61         2,546,555 29,327,794    41,747                    71.6
  Gabriel Roeder Smith & Company                                                                                 16
New Mexico Magistrate Retirement Fund                                                                                                                                                   Section 2



                         STATUTORY OBLIGATIONS AND SOURCES OF FUNDING
                                        JUNE 30, 2009
                                                                            Active and Retired Members

                                                                                                                                                      Active Members
                                                                                                                                                      Retirees & Beneficiaries

      80


      70
           64       63        63                                                                       63
                                        62                                                  61                                                                             61
                                                                        59        60
      60                                          58         57
                                                                                                                                                          55       56
                                                                                                                                                                        54
                                                                                                                 52                                     52
                                                                                                                            50        50        50 48
      50                                                                                                              46
                                                                                                                                 44                             45
                                                                                                                                           44

      40                                                                                          36        37
                                                                             35        35


      30                                                26        27
                                   23        22
      20


      10
                         3
                0
       0
           85       90        95         96        97        98         99        00         01        02         03        04        05         06      07      08       09
                                                                                       Valuation Year




                                                         Benefits & Contributions as Percents of Payroll
                                                                                                                                                           Pension Payments
                                                                                                                                                           Computed Contribution

                                                                                                                                                                           70%


                                                                                                                                                                          60%


                                                                                                                                                                          50%


                                                                                                                                                                          40%


                                                                                                                                                                         30%
                                                                                                                                                                                 % of Payroll

                                                                                                                                                                         20%


                                                                                                                                                                        10%


                                                                                                                                                                        0%
                                                                                                                                                  08 09
                                                                                                                 01    02    03       04 05 06 07
                                                                                   97       98    99    00
                                                       93    94        95    96
                               90       91    92
                         85

                                                                                  Valuation Year




 Gabriel Roeder Smith & Company                                                                                                                                                                 17
New Mexico Magistrate Retirement Fund                                                               Section 2




Vested inactive magistrates included in the valuation totaled 12, involving pensions of $377,075.


             Valuation  Vested                                             Average
               Date    Inactive    Annual                            Annual
              June 30 Magistrates Pensions             Liability     Pension     Age

                1990            2         $ 24,369    $ 146,315      $12,184         53.7 yrs.
                1991            3           42,088      366,244       14,029         57.5
                1992            3           42,088      397,431       14,029         58.5
                1993            4           68,668      463,769       17,167         54.4
                1994            3           66,859      167,998       22,286         44.9
                1995            7          159,910       553,706      22,844         45.3
                1996            7          162,912       822,102      23,273         50.4
                1997            8          209,410       787,344      26,176         48.1
                1998            9          231,372     1,156,882      25,708         51.0
                1999            7          183,563       849,319      26,223         50.8
                2000           8           203,773       950,487      25,472         50.9
                2001           8           231,084     1,332,408      28,886         51.7
                2002          10           305,496     1,865,692      30,550         52.4
                2003          14           477,162     2,534,375      34,083         50.9
                2004          12           394,618     2,356,406      32,885         52.1
                2005          16           510,738     3,254,658      31,921         53.2
                2006          13           444,806     3,274,608      34,216         55.0
                2007          13           422,086     2,916,253      32,468         54.2
                2008          19           543,401     4,702,193      28,600         56.9
                2009          12           377,075     3,099,779      31,423         56.2




 Gabriel Roeder Smith & Company                                                                         18
New Mexico Magistrate Retirement Fund                                                       Section 2




                           ACTIVE MEMBERS JUNE 30, 2009
                     BY NEAREST AGE AND YEARS OF TOTAL SERVICE

                                                                          Totals
        Nearest             Years of Service to Valuation Date              Reported
         Age         0-4     5-9 10-14 15-19 20-24 25-29 30 Plus      No.    Payroll

         35-39        1                                                 1     $    76,478
         40-44        1              1        2      1      1           6         458,869
         45-49        2        4     2        1                         9         688,911
         50-54        4        1     2               1                  8         611,825
         55-59        1        3     5        2             1          12         915,913
           60         1               1                                 2         152,955
           61
           63                        1                                  1          76,478
           64         1                                                 1          76,478
           65                  1                                        1          76,478
           66                  1     1                                  2         152,956
           67                  1     1               1                  3         229,434
           68
           72

         Totals      14      13      16       5      3      3          54    $ 4,128,599


While not used in the financial computations, the following group averages are computed and shown
because of their general interest.



                                             Group Averages:

                                                Age: 54.4
                                             Service: 10.2
                                          Annual Pay: $76,456




 Gabriel Roeder Smith & Company                                                                 19
New Mexico Magistrate Retirement Fund                                             Section 2




      RETIREES AND BENEFICIARIES ADDED TO AND REMOVED FROM ROLLS


             Period                          Net Increase     Rolls End of Year
             Ended Added Removed                    Annual              Annual
            June 30 to Rolls from Rolls     No.    Pensions   No.      Pensions

              1999                                             35    $1,079,080
              2000         3            3    0     $ 34,839    35     1,113,919
              2001         3            2    1       35,446    36     1,149,365
              2002         2            1    1       84,879    37     1,234,244
              2003         9            0    9      360,160    46     1,594,404
              2004         1            3   (2)      52,835    44     1,647,239
              2005         1            1    0        9,869    44     1,657,108
              2006         6            2    4      166,923    48     1,824,031
              2007         7            0    7      350,950    55     2,174,981
              2008         1            0    1       81,215    56     2,256,196
              2009         7            2    5      290,359    61     2,546,555




 Gabriel Roeder Smith & Company                                                       20
New Mexico Magistrate Retirement Fund                            Section 2




                                    RETIRED LIVES
                              TABULATED BY ATTAINED AGES


                               Attained              Annual
                                Ages      No.       Pensions

                                 56        3    $      190,332
                                 58        1            75,401
                                 59        2            80,340
                                 60        2           116,584
                                 61        3           134,673
                                 63        1            45,814
                                 65        6           211,435
                                 66        5           203,462
                                 67        2            61,167
                                 68        3           100,488
                                 69        1            54,032
                                 71        1            43,453
                                 72        3           106,007
                                 73        2            78,193
                                 74        2           110,840
                                 75        2            87,446
                                 76        3           111,407
                                 77        3           111,511
                                 78        3           123,279
                                 79        1            17,623
                                 80        4           180,762
                                 81        2            88,500
                                 82        2            93,190
                                 83        1            49,080
                                 85        1            19,743
                                 89        1            25,469
                                 90        1            26,324
                                Totals    61        $2,546,555




 Gabriel Roeder Smith & Company                                      21
New Mexico Magistrate Retirement Fund                                                       Section 2




        RETIRED MEMBERS AND SURVIVOR PENSION BENEFICIARIES
        DISPLAYED BY TYPE OF PENSION BEING PAID -- JUNE 30, 2009


                         Type of Pension            Number       Pension       Average


       Normal Retirement Pensions

       Regular benefit - 75% joint and survivor       53          $2,313,701 $     43,655

       Benefit being paid survivor beneficiary of
       deceased retirant                               6            165,207        27,535

       Total Normal Retirement Pensions               59         2,478,908         42,015

       Disability Retirement Pensions

       Duty disability                                 1             46,222        46,222

       Non duty disability                             1             21,425        21,425

       Total Disability Pensions                       2            67,647            n/a

       Pre-retirement Survivor Pensions

           Spouse recipient                            0                   0          n/a

           Child recipient                             0                   0          n/a

       Total Pre-retirement Survivor Pensions          0                   0          n/a

       Total Pensions Being Paid                      61     $   2,546,555     $   41,747




 Gabriel Roeder Smith & Company                                                                 22
New Mexico Magistrate Retirement Fund                          Section 2




                       VESTED INACTIVE MEMBERS JUNE 30, 2009
                           TABULATED BY ATTAINED AGES



                                Attained          Annual
                                 Ages      No.   Pensions
                                    44      1    $ 27,339
                                    46      1      22,473
                                    53      2      75,747
                                    55      3      89,398
                                    58      1      24,582
                                    59      1      31,410
                                    61      1      42,673
                                    64      1      29,237
                                    65      1      34,216

                                 Totals    12    $377,075




 Gabriel Roeder Smith & Company                                    23
                                  ACTIVE MEMBER EXPERIENCE - HISTORICAL COMPARISON

         Year          No. Added   Normal                 Died-In         Withdrawals                          Active Members
         Ended        During Year Retirement   Disabled   Service   Vested Other    Total     End of    Annual        Avg. Annual Pay
        June 30        A      E    A     E     A     E    A     E     A      A     A      E    Year     Payroll        $       % Incr.
          1991         16    11     4   5.8    0    0.4   0   0.4     1      6      7   1.2    68      $3,109,151   $45,723     0.7 %
          1992          1     2     1   2.9    0    0.5   1   0.4                   0   1.6    67       3,064,151    45,734     0.0
          1993         10     8     2   2.1    0    0.4   0   0.5     1      5      6   1.5    69       3,202,500    46,413     1.5

          1994          6     7     3   2.0    0    0.4   0   0.5     1      3      4   1.6    68       3,245,662    47,730     2.8
          1995         14    19     9   2.0    0    0.4   0   0.5     4      6     10   1.6    63       3,500,829    55,569    16.4
          1996          0     1     0   0.7    0    0.4   0   0.4     1      0      1   1.5    62       3,361,667    54,220     2.4
          1997          2     6     2   0.8    0    0.3   0   0.3     3      1      4   1.3    58       3,178,106    54,795     1.1

          1999         15    13     8   2.5    0    0.3   0   0.3     1      4      5   1.2    59       3,263,642    55,316     0.5
          2000          4     3     1   0.6    0    0.4   0   0.3     1      1      2   1.2    60       3,485,366    58,089     5.0
          2001          4     3     1   0.6    0    0.4   0   0.3     1      1      2   1.2    61       3,650,670    59,847     3.0
          2002          6     3     1   1.6    1    0.4   0   0.3     1      0      1   1.2    63       3,996,832    63,442     9.2

          2003         20    31     8   1.8    0    0.4   0   0.3     5     18     23   1.2    52       3,081,850    59,266    (6.6)
          2004          3     5     1   0.7    0    0.3   0   0.2     0      4      4   1.4    50       3,002,422    60,048     1.3
          2005          6     6     1   0.8    0    0.2   0   0.2     1      4      5   1.0    50       3,196,052    63,921     6.4

          2006          4     4     2   0.5    0    0.3   0   0.2     1      1      2   1.2    50       3,149,560    62,991    (1.5)
          2007         14    12     6   0.7    0    0.2   0   0.2     1      5      6   1.1    52       3,464,587    66,627     5.8
          2008          1     8     0   0.8    0    0.3   0   0.2     5      3      8   1.1    45       3,363,342    74,741    12.2

         2009           9     0     0   1.4    0    0.0   0   0.2     0      0      0   1.6    54      4,128,599    76,456     2.3

       5-Yr. Total     34    30     9   4.2    0    1.0   0   1.0     8     13     21   6.0

       A: Actual
       E : Expected



Gabriel Roeder Smith & Company                                                                                                           24
SECTION 3
DESCRIPTION OF ACTUARIAL COST METHODS
S U M M A RY O F E S T I M AT E S O F F U T U R E F I S C A L
AND PEOPLE ACTIVITIES
DEFINITIONS OF TECHNICAL TERMS
New Mexico Magistrate Retirement Fund                                                                  Section 3




                 ACTUARIAL COST METHODS USED FOR THE VALUATION

An actuarial cost method is a procedure for allocating the actuarial present value of benefits and expenses to
time periods. The method used for this valuation is known as the individual entry-age actuarial cost method,
and has the following characteristics:


        (i)    The annual normal costs for each individual active magistrate are sufficient to
               accumulate the value of the magistrate's pension at time of retirement.
       (ii)    Each annual normal cost is a constant percentage of the magistrate's year-by-
               year projected compensation.

The individual entry-age actuarial cost method allocates the actuarial present value of each magistrate's
projected benefits on a level basis over the magistrate's compensation between the entry-age of the
magistrate and the pattern of projected exit ages.

The portion of the actuarial present value allocated to the valuation year is called the normal cost. The
portion of the actuarial present value not provided for by the actuarial present value of future normal costs is
called the actuarial accrued liability.      Deducting accrued assets from the actuarial accrued liability
determines the unfunded actuarial accrued liability. Unfunded actuarial accrued liability was amortized as a
level percent of payroll over 30 years to determine the computed contribution for fiscal integrity. This
period is consistent with the policy established by the Retirement Board in October 1996.

Active magistrate payroll was projected to increase 4.5% per year for the purpose of determining the
contribution needed to amortize the unfunded actuarial accrued liability. This estimate is consistent with the
base rate of increase in salaries used to calculate actuarial present values.


The valuation assets used for funding purposes are derived as follows: prior year valuation assets are
increased by contributions and expected investment income and reduced by refunds, benefit payments and
expenses. To this amount 25% of the difference between expected and actual investment income for each
of the previous four years is added. The funding value of assets for each division is allocated in proportion
to the total fund balances. If the funding value of assets is not within 20% of the Market Value, it will be
adjusted accordingly.




  Gabriel Roeder Smith & Company                                                                           25
New Mexico Magistrate Retirement Fund                                                                 Section 3



      ESTIMATES OF FUTURE MAGISTRATE RETIREMENT FUND EXPERIENCE
                        USED FOR THE VALUATION

Funding objective contribution requirements and actuarial present values are calculated by applying
estimates of future experience (actuarial assumptions) to the benefit provisions and people information of the
Magistrate Retirement Fund, using the actuarial cost methods described on the previous page.



The principal areas of activity which require estimates are:

               (i)    long-term rates of investment return to be generated by the assets of the
                      Magistrate Retirement Fund
              (ii)    patterns of salary increases to magistrates
              (iii)   rates of mortality among magistrates, retired magistrates, and beneficiaries
              (iv)    rates of withdrawal of active magistrates
               (v)    rates of disability among active magistrates
              (vi)    the age patterns of actual retirements

In making a valuation, the monetary effect of each activity is calculated for as long as a present covered
person survives - - - a period of time which can be as long as a century.




Actual activities of the Magistrate Retirement Fund will not coincide exactly with estimated activities, due to
the nature of the activities. Each valuation provides a complete recalculation of estimated future activities
and takes into account the effect of past differences between estimated and actual activities. The result is a
continual series of adjustments (usually small). From time to time one or more of the estimates are modified
to reflect experience trends (but not random or temporary year-to-year fluctuations).




 Gabriel Roeder Smith & Company                                                                           26
New Mexico Magistrate Retirement Fund                                                                Section 3



ASSUMED RATE OF INVESTMENT RETURN. 8% of net administrative and investment expenses.

The fiscal estimates of future INFLATION, REAL INVESTMENT RETURN in excess of inflation and
SALARY INCREASES are used in combination with the demographic estimates to determine the present
value of amounts expected to be paid in the future.

PRICE INFLATION. 4% per annum, compounded annually (beginning with the June 30, 2008 valuation.)
This is the rate at which growth in the supply of money and credit is assumed to exceed growth in the supply
of goods and services. It may be thought of as the rate of depreciation of the purchasing power of the dollar.
There are a number of indices for measuring the inflation rate. The recent inflation rate, as measured by the
Consumer Price Index, has been:
                                                                                   Average for
                               Year Ended June 30                          Last       Last     Last
                 2009        2008     2007     2006             2005      5 Yrs.     10 Yrs. 30 Yrs.

    Actual      (1.4)%       5.0%       2.7%          4.3%     2.5%       2.6%        2.6%       3.7%


REAL INVESTMENT RETURN.                 4% per annum (3.5% over wage growth), compounded annually
(beginning with the June 30, 2008 valuation.) This is the rate of return (net of administrative and investment
expenses) to be produced by investing a pool of assets in an inflation-free environment. Recent real
investment return for the Retirement Fund has been:


                                                  Year Ended                      Average
                               6/30/2009 6/30/2008 6/30/2007 6/30/2006 6/30/2005 for Period

    Total Nominal Rate          (16.2)%        7.0%          13.6%     9.9%         6.5%          3.6%
     Less Inflation Rate          (1.4)         5.0           2.7       4.3          2.5          2.6
    Actual Real Rate             (14.8)        2.0           10.9       5.6          4.0          1.0
    Actual Exp.                    0.2         0.2            0.3       0.3          0.1          0.2
    Net Real Rate                (15.0)        1.8           10.6       5.3          3.9          0.8

    Assumed Real Rate             3.5          3.0           3.0        3.0         3.0           3.1


The total nominal rate of return was computed using the approximate formula i = I divided by ½
(A + B - I), where I is recognized investment income, A is the beginning of year asset value, and B is the
end-of-year asset value. These rates of return should not be used for measurement of an investment advisor's
performance or for comparisons with other systems -- to do so will mislead.


 Gabriel Roeder Smith & Company                                                                          27
New Mexico Magistrate Retirement Fund                                                                Section 3



SALARY INCREASES. A schedule of rates of increases is used to project salaries from valuation salaries
to final average salaries upon which pensions are based. Rates of increase for sample ages follow.


                                                   Percent Increase
                                     Sample            in Salary
                                      Ages         During Next Year

                                        20                 4.75 %
                                        25                 4.75
                                        30                 4.75
                                        35                 4.75
                                        40                 4.75

                                        45                 4.75
                                        50                 4.75
                                        55                 4.75
                                        60                 4.75
                                        65                 4.75


RATES OF SEPARATION FROM ACTIVE MEMBERSHIP. The rates are used to measure probabilities
of active members terminating that status for a reason other than disability or death. The rates do not apply
to magistrates who are eligible for retirement.


                                                        Percent of
                                              Active Magistrates Separating
                              Ages                 Within the Next Year

                                20                          4.00 %
                                25                          4.00
                                30                          4.00
                                35                          4.00
                                40                          4.00

                                45                          4.00
                                50                          4.00
                                55                          4.00




 Gabriel Roeder Smith & Company                                                                          28
New Mexico Magistrate Retirement Fund                                                                 Section 3



MORTALITY TABLE. The 2000 Group Annuity Mortality Table (1971 GAM projected), set back 3 years
for men and 7 years for women.

Present values and life expectancies are shown for sample ages in the following schedule. Note that sex
distinct mortality rates are used solely for determining the funded status and contribution rate adequacy.

                                                   Healthy Mortality Table
                                                       Present Value of
                           Present Value of        $1.00/Mo. for Two Years        Future Life
              Sample      $1 Monthly for Life   Increasing 3% /Yr. Thereafter   Expectancy Years
               Ages        Men       Women              Men        Women         Men       Women


                 40     $144.46     $147.07          $199.85      $206.58       40.37    44.22
                 45      140.12      143.69           189.77       197.99       35.61    39.41
                 50      134.44      139.09           177.83       187.52       30.97    34.67

                 55      127.43       133.15          164.26       175.25       26.53    30.06
                 60      118.84       125.85          148.97       161.34       22.32    25.67
                 65      108.26       116.89          131.76       145.67       18.33    21.50

                 70        95.83      105.91          113.19       128.13       14.67    17.57
                 75        82.60       93.21           94.74       109.43       11.48    13.99
                 80        69.10       79.97           77.06        91.19        8.78    10.91

                 85        56.19       66.37           61.13        73.63        6.60     8.29


                                           Disabled (or Impaired) Mortality Table
                                                      Present Value of
                           Present Value of       $1.00/Mo. for Two Years          Future Life
               Sample     $1 Monthly for Life Increasing 3% /Yr. Thereafter Expectancy Years
                Ages       Men       Women             Men         Women          Men     Women


                 40     $118.90      $118.93          $154.36      $156.55      26.19    28.52
                 45      115.65       117.01           147.56       152.22      23.65    26.48
                 50      110.58       113.71           138.32       145.93      20.89    24.18

                 55       104.12      109.63           127.39       138.62      18.11    21.85
                 60        96.18      105.28           114.90       130.98      15.36    19.61
                 65        86.79      100.60           101.11       122.91      12.71    17.45

                 70        76.18       95.11            86.48       113.80      10.25    15.26
                 75        64.75       88.02            71.65       102.78       8.02    12.98
                 80        53.12       77.97            57.36        88.61       6.09    10.52

                 85        41.98       65.22            44.34        72.12       4.48     8.06

 Gabriel Roeder Smith & Company                                                                              29
New Mexico Magistrate Retirement Fund                                                              Section 3



RATES OF RETIREMENT. These rates are used to measure the probability of an eligible magistrate
retiring at the indicated ages.


                                             Active Magistrates Retiring
                                                   Within the Year
                                               Following Attainment of
                                  Ages              Indicated Ages

                                  50-54                     15 %
                                  55-59                     10
                                  60-69                     20
                                   70                      100

A member was assumed to be eligible for normal retirement after attaining 24 years of service, regardless of
age; age 60 with 15 years of service; or age 64 with 5 or more years of service, provided that the member
had a minimum of 5 years of service under the Magistrate Retirement Fund.


RATES OF DISABILITY. Beginning with the June 30, 2008 valuation there are assumed to be no future
disabled retirees.




ADMINISTRATIVE AND INVESTMENT EXPENSES. All expenses are deducted from gross investment
income.

ACTIVE MEMBER GROUP SIZE. The valuation is based on stationary group size.




  Gabriel Roeder Smith & Company                                                                       30
New Mexico Magistrate Retirement Fund                                                           Section 3




                   MISCELLANEOUS AND TECHNICAL ASSUMPTIONS
                                         JUNE 30, 2009

Marriage Assumption:                100% of males and 100% of females are assumed to be married for
                                    purposes of death-in-service benefits. Male spouses are assumed to
                                    be three years older than female spouses. 87% of males and 87%
                                    of females were assumed to be married for purposes of the death
                                    after retirement benefit.

Pay Increase Timing:                Beginning of (Fiscal) year. This is equivalent to assuming that
                                    reported pays represent amounts paid to members during the year
                                    ended on the valuation date.

Decrement Timing:                   Decrements of all types are assumed to occur mid-year, in the
                                    following order of importance: disability, death, vesting, and
                                    retirement.

Eligibility Testing:                Eligibility for benefits is determined based upon the age nearest
                                    birthday and service nearest whole year on the date the decrement
                                    is assumed to occur.

Decrement Relativity:               Decrement rates are used directly from the experience study,
                                    without adjustment for multiple decrement table effects.

Decrement Operation:                Disability and mortality decrements operate during the first 5 years
                                    of service. Only mortality operates during retirement eligibility.

Liability Adjustments:              Active member liability was increased by 2% to account for data
                                    uncertainties.

Incidence of Contributions:         Contributions are assumed to be received continuously throughout
                                    the year based upon the computed percent of payroll shown in this
                                    report, and the actual payroll payable at the time contributions are
                                    made.

Normal Form of Benefit:             A 75% automatic joint and survivor payment is the assumed normal
                                    form of benefit.

Benefit Service:                    Exact fractional service is used to determine the amount of benefit
                                    payable.




 Gabriel Roeder Smith & Company                                                                     31
New Mexico Magistrate Retirement Fund                                                                   Section 3




                               DEFINITIONS OF TECHNICAL TERMS

Actuary. A person who is trained in the applications of probability and compound interest to problems in
business and finance that involve payment of money in the future, contingent upon the occurrence of future
events.



Accrued Service. Service credited under the system which was rendered before the date of the actuarial
valuation.



Actuarial Accrued Liability. The difference between the actuarial present value of future benefits payments
and the actuarial present value of future normal costs. Also referred to as "accrued liability" or "prior service
liability."



Actuarial Experience Estimates. Estimates of expected future experience with respect to rates of mortality,
disability, turnover, retirement, rate or rates of investment income and salary increases. Demographic
estimates (rates of mortality, disability, turnover and retirement) are generally based on past experience,
modified for projected changes in conditions.         Fiscal estimates (salary increases, inflation and real
investment return) consist of the underlying rates in an inflation-free environment plus a provision for a
long-term average rate of inflation.



Actuarial Cost Method. A mathematical budgeting procedure for allocating the dollar amount of the
"actuarial present value of future benefit payments" between future normal cost and actuarial accrued
liability. Sometimes referred to as the "actuarial valuation cost method."



Actuarial Equivalent. A single amount or series of amounts of equal actuarial present value to another
single amount or series of amounts, computed on the basis of appropriate actuarial experience estimates.




  Gabriel Roeder Smith & Company                                                                            32
New Mexico Magistrate Retirement Fund                                                                  Section 3




Actuarial Present Value. The amount of funds currently required to provide a payment or series of
payments in the future. It is determined by discounting future payments at predetermined rates of interest,
and by probabilities of payment. Also referred to as "present value."



Amortization. Paying off an interest-discounted amount with periodic payments of interest and principal --
as opposed to paying off with a lump sum payment.



Experience Gain (Loss). The difference between actual actuarial costs and anticipated actuarial costs --
during the period between two valuation dates.



Normal Cost. The actuarial cost allocated to the current year by the actuarial cost method. Sometimes
referred to as "current service cost."



Unfunded Actuarial Accrued Liability. The difference between the actuarial accrued liability and the
funding value of assets. Sometimes referred to as "unfunded prior service liability," "unfunded accrued
liability" or "unfunded supplemental present value."



Most retirement systems have an unfunded actuarial accrued liability. An amount arises each time new
benefits are added, an affiliated public employer adopts a new coverage plan, and an experience loss occurs.



The existence of an unfunded actuarial accrued liability is not in itself bad, any more than a mortgage on a
house is bad. An unfunded actuarial accrued liability does not represent a debt that is payable today. What
is important is control of the amount of unfunded actuarial accrued liability and the trend in the amount (after
due allowance for devaluation of the dollar from inflation and deliberate actions affecting the amount).




  Gabriel Roeder Smith & Company                                                                           33
SECTION 4
D I S C L O S U R E S A N D S U P P L E M E N TA RY
I N F O R M AT I O N R E Q U I R E D B Y S TAT E M E N T N O . 2 5
O F T H E G O V E R N M E N TA L A C C O U N T I N G
S TA N D A R D S B O A R D




This information is presented in draft form for review by the
Fund’s auditor. Please let us know if there are any items that the
auditor changes so that we may maintain consistency with the
Fund’s financial statements.
New Mexico Magistrate Retirement Fund                                                                Section 4




                               ACTUARIAL ACCRUED LIABILITY

The actuarial accrued liability is a measure intended to help users assess (i) a pension fund's funded status
on a going concern basis, and (ii) progress being made toward accumulating the assets needed to pay
benefits as due. Allocation of the actuarial present value of projected benefits between past and future
service was based on service using the individual entry-age actuarial cost method. Assumptions, including
projected pay increases, were the same as used to determine the System's level percent of payroll annual
required contribution between entry-age and assumed exit age. Entry-age was established by subtracting
credited service from current age on the valuation date.

The preceding methods comply with the financial reporting standards established by the Governmental
Accounting Standards Board.

The entry-age actuarial accrued liability was determined as part of an actuarial valuation of the plan as of
June 30, 2009. Significant actuarial assumptions used in determining the entry age actuarial accrued
liability include (a) a rate of return on the investment of present and future assets of 8.00% per year net of
expenses compounded annually, (b) projected salary increases of 4.5% per year compounded annually.


          Actuarial Accrued Liability:

            Active members                                                         $ 15,140,031

            Retired members and beneficiaries currently receiving benefits             29,327,794

            Vested terminated members not yet receiving benefits                        3,099,779

            Total Actuarial Accrued Liability                                          47,567,604

          Actuarial Value of Assets (market value was $26,270,170)                     31,524,204

          Unfunded Actuarial Accrued Liability                                     $ 16,043,400

          Funded Ratio                                                                     66.27%




Gabriel Roeder Smith & Company                                                                             34
New Mexico Magistrate Retirement Fund                                                                        Section 4



                         REQUIRED SUPPLEMENTARY INFORMATION
                         SCHEDULE OF EMPLOYER CONTRIBUTIONS
                                 Fiscal             Actuarial
                                  Year              Valuation                Annual
                                 Ended                Date                  Required
                                June 30              June 30               Contribution
                                2001                  2000                  $ 730,852
                                2002                  2001                     778,882
                                2003                  2002                     881,229
                                2004#                 2003                     894,349
                                2005                  2004                     927,233
                                2006                  2005                   1,009,203
                                2007                  2006                     943,884
                                2008                  2007                   1,029,865
                                2009                  2008                   1,151,061
                                2010                  2009                   1,997,560 *
       * For the valuation year ended June 30, 2009, the ARC is based on the required contribution rate
         multiplied by the valuation payroll projected to the following year. Projection factor is 1.045.
       # Plan change.




                         REQUIRED SUPPLEMENTARY INFORMATION
                            SCHEDULE OF FUNDING PROGRESS
                                        (2)                                                            (6)
                     (1)             Actuarial          (3)         (4)             (5)          Unfunded AAL
     Valuation    Actuarial          Accrued         Percent     Unfunded         Annual        as a Percentage
       Date       Value of        Liability (AAL)    Funded        AAL            Covered      of Covered Payroll
     June 30       Assets           Entry Age         (1)/(2)     (2)-(1)         Payroll            (4)/(5)
       2001      $ 30,258,095      $ 26,685,280       113.4%    $ (3,572,815)    $ 3,650,670           -
       2002        32,039,588        28,959,427       110.6       (3,080,161)      3,996,832           -
       2003#       29,629,462        29,078,050       101.9         (551,412)      3,081,850           -
       2004        30,071,628        30,194,583        99.6          122,955       3,002,422         4.1%
       2005        31,303,435        31,384,962        99.7           81,527       3,196,052         2.6%
       2006        33,694,422        33,362,138       101.0         (332,284)      3,149,560           -
       2007        37,241,628        36,964,449       100.7         (277,179)      3,464,587           -
       2008        38,866,453        41,721,278        93.2        2,854,825       3,363,342        84.9%
      2009*#      31,524,204        47,567,604         66.3     16,043,400        4,128,599        388.6%

       # Plan change.
       * Assumption change.




Gabriel Roeder Smith & Company                                                                                      35
 New Mexico Magistrate Retirement Fund                                                                            Section 4




                   NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
                  SUMMARY OF ACTUARIAL METHODS AND ASSUMPTIONS


                    Valuation Date                                 June 30, 2009

                    Actuarial Cost Method                          Individual Entry Age
                    Amortization Method                            Level Percent of payroll, Open
                    Remaining Amortization Period                  30 years**
                    Asset Valuation Method                         4-year smoothed market
                    Actuarial Assumptions:
                       Investment Rate of Return*                               8.00%
                       Projected Salary Increases*                              4.75%
                       *Includes Inflation at                                   4.00%
                       Cost-of-Living Adjustments                               3.00%


Membership data as of June 30, 2009 is contained in Section 2 of this report.


 **   ARC is computed using a 30-year funding objective that has been established by the PERA Board. As of the June 30, 2009
      valuation, the statutory contribution rate is not sufficient to meet the objective. The remaining period, based on the
      statutory rate, is infinite.




 Gabriel Roeder Smith & Company                                                                                          36

				
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