University of Oregon 2019 Annual Financial Report
Notes to the Financial Statements
For the Year Ended June 30, 2019 (dollars in thousands)
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary
net position is available in the separately issued PERS
financial report.
Pension Liabilities, Pension Expense, Deferred
Outflows of Resources, and Deferred Inflows of
Resources Related to Pensions
At June 30, 2019, the UO reported a liability of $305,554
for its proportionate share of the net pension liability, and
pension expense of $43,214. The net pension liability
was measured as of June 30, 2018, and the total pension
liability used to calculate the net pension liability was
determined by an actuarial valuation as of December
31, 2016, and rolled forward to June 30, 2018. At June
30, 2018, the UO reported a liability of $298,606 for
its proportionate share of the net pension liability, and
pension expense of $85,304. The net pension liability
was measured as of June 30, 2017, and the total pension
liability used to calculate the net pension liability was
determined by an actuarial valuation as of December
31, 2015, and rolled forward to June 30, 2017. The UO's
proportionate share of the net pension liability was based
Year Ended
June 30
Net Pension
Expense (Revenue)
2020
$
39,537
2021
28,319
2022
(2,507)
2023
3,522
2024
1,712
$
70,583
Rates of every employer have at least two major
components:
1. Normal Cost Rate: The economic value is stated
as a percent of payroll for the portion of each active
member's total projected retirement benefit that is
allocated to the upcoming year of service. The rate
is in effect for as long as each member continues in
PERS-covered employment. The current value of all
projected future Normal Cost Rate contributions is the
Present Value of Future Normal Costs (PVFNC). The
PVFNC represents the portion of the projected long-
term contribution effort related to future service.
2. UAL Rate: If system assets are less than the actuarial
on its projected long-term contribution effort as compared liability, an Unfunded Actuarial Liability (UAL) exists.
to the total projected long-term contribution effort of all
employers. At June 30, 2019 and 2018, the university's
proportionate share was 2.017 percent and 2.215 percent,
respectively. Since the prior measurement date the UO's
proportionate share of the collective net pension liability
has decreased by 0.198 percent.
Differences between expected and
actual experience
Deferred Outflows of Deferred Inflows of
Resources
Resources
$
10,394 $
71,041
6,322
Changes of assumptions
Net difference between projected and
actual earnings on investments
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
Total (prior to post-measurement date
contributions)
$
87,757
$
Net Deferred Outflow/Inflow of
Resources before contributions
subsequent to Measurement Date
Contributions made subsequent to
measurement date
Net Deferred Outflows/Inflows
of Resources
70,583
29,069
$
99,652
13,568
3,606
17,174
Of the $99,652 reported as deferred outflows of
resources, $29,069 related to pensions resulting from
UO contributions subsequent to the measurement date
will be recognized as a reduction of the net pension
liability in the year ended June 30, 2020. Other
amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will
be recognized in pension expense (revenue) as follows:
UAL can arise in a biennium when an event such as
experience differing from the assumptions used in the
actuarial valuation occurs. An amortization schedule is
established to eliminate the UAL that arises in a given
biennium over a fixed period of time if future experience
follows assumption. The UAL rate is the upcoming year's
component of the cumulative amortization schedules,
stated as a percent of payroll. The present value of all
projected UAL rate contributions is simply the UAL
itself. The UAL represents the portion of the projected
long-term contribution effort related to past service.
Looking at both rate components, the projected long-
term contribution effort is just the sum of the PVFNC
and the UAL. The PVFNC part of the contribution effort
pays for the value of future service while the UAL part of
the contribution effort pays for the value of past service
not already funded by accumulated contributions and
investment earnings.
The UAL has Tier One/Tier Two and OPSRP components.
The Tier One/Tier Two piece is based on the employer's
Tier One/Tier Two pooling arrangement. The UO
participates in the SLGRP. As a result, its Tier One/Tier
Two UAL is the UO's pro-rata share of the pool's UAL.
The pro-rata calculation is based on the employer's
payroll in proportion to the pool's total payroll. For
example, if the employer's payroll is one percent of
the pool's total payroll, the employer will be allocated
one percent of the pool's UAL. The OPSRP piece of the
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