Mendocino County
Retirement System
(MCERA) Section
Choices -
Introduction
Pension Debt
Unfunded Obligations
Causes
Chronically Underfunded
Meeting With MCERA
MCERA Flawed Response
Inaccurate-Misleading Financial Reports
Changes in Net Assets
Net Assets
Mendocino County Employees Retirement AssociationInaccurate and Misleading Financial Reports |
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We've analyzed 10 years of MCERA's audited financial reports, 1998 through 2007. MCERA's statements for 1998 through 2002 showed Pension and Healthcare Funds separately. But since then MCERA has not reported its Retirement (Pension) and Healthcare activities separately; they've been combined into one set of overall numbers. There are several important issues related to this:
As an example of how inaccurate and misleading MCERA's audited statements are from 1998 through 2002, consider the table below. It is based on MCERA's financial statement for 1998 (click to see - 800K pdf file, version 5 or later). The Net Investment Income and Beginning Asset values are taken directly from the statement. The Return values were calculated from those values.
Investment Returns for Retireement (Pension) Fund and Healthcare Fund
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| Health | Pension | |
| Beginning Net Assets | $1.8 | $132.0 |
| Investment Profit | $6.7 | $6.2 |
| Return on Beginning Assets | 375.5% | 4.7% |
According to MCERA's audited financial statement, the Healthcare Fund started 1998 with $1.8 million of Assets and made a Net Investment Return of $6.7 million. The Pension Fund started with $132.0 million and its Net Return was $6.2 million? Healthcare got a return of 375% based on Beginning Assets and Pension got 4.6%?
These numbers are absurd on their face.
A table showing Net Investment Income, Average and Beginning Net Assets with calculated Returns is shown below the page buttons if you want to see how unrealistic MCERA's audited statements are during these years.
The next two pages are MCERA's financial statements. Further infomation about MCERA will be added later.
Net Investment Income and Assets
Pension and Healthcare Funds
MCERA 1998 - 2002
| 1998 | 1999 | 2000 | 2001 | 2002 | |||
| Net Investment Income | |||||||
| Healthcare | 6,721,779 | (5,148) | (1,604,495) | 2,504,434 | 1,385,086 | ||
| Pensions | 6,170,087 | 10,052,540 | 18,356,026 | (15,266,240) | (10,594,691) | ||
| Total | 12,891,866 | 10,047,392 | 16,751,531 | (12,761,806) | (9,209,605) | ||
| Average Net Assets | |||||||
| Healthcare | 4,722,431 | 6,975,155 | 4,686,257 | 3,660,786 | 3,789,487 | ||
| Pensions | 137,012,648 | 145,189,611 | 162,117,339 | 146,699,200 | 137,416,446 | ||
| Total | 141,735,078 | 152,164,765 | 166,803,596 | 150,359,986 | 141,205,933 | ||
| Beginning Value of Net Assets | |||||||
| Healthcare | 1,789,949 | 7,654,912 | 6,295,397 | 3,077,116 | 4,244,456 | ||
| Pensions | 132,115,943 | 135,739,265 | 144,587,416 | 161,291,236 | 147,373,404 | ||
| Total | 133,905,892 | 143,394,177 | 150,882,813 | 164,368,352 | 151,617,860 | ||
| Return on Average Net Assets | |||||||
| Health Care | 142.3% | -0.1% | -34.2% | 68.4% | 36.6% | ||
| Pension | 4.5% | 6.9% | 11.3% | -10.4% | -7.7% | ||
| Difference | 137.8% | -7.0% | -45.6% | 78.8% | 44.3% | ||
| Return on Beginning Assets | |||||||
| Health Care | 375.5% | -0.1% | -25.5% | 81.4% | 32.6% | ||
| Pension | 4.7% | 7.4% | 12.7% | -9.5% | -7.2% | ||
| Difference | 370.9% | -7.5% | -38.2% | 90.9% | 39.8% | ||
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