CGFO Fin Adm

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Author:
FSUmom
ID:
200750
Filename:
CGFO Fin Adm
Updated:
2013-02-15 11:46:35
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CGFO Financial Adminstration Fin Adm
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CGFO Financial Adminstration exam
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  1. What is Sharpe Ration?
    Sharpe ratio measures the volatitlity combing two risk elements, 1 return premiums compared to T-bill rate and 2 the portfolios' STANDARD DEVIATION of return.

    A mesure of a portfolio's excess return relative to the toal variability of the portfolio.

    Return in portfolio compared to its RISK.
  2. What does NPO standard for?
    NPO is Net Pension Obligation
  3. True or False?

    NPO should it be reported by an employer if there was a temporaty delay as a result of timing of payments?
    FALSE
  4. What happens to the ARC when special termination benefits to employees are paid?
    This automatically increase pension cost thru calculation of ARC.
  5. What is ARC?
    Annual Required Contribution
  6. What is the reason for an Actuarial Valuation of PERS?
    An Actuarial Valuation is the process of assessing viability of PERS.
  7. What are the reasons a PERS may not be financially sound?

    (2)
    1.  Jurisdictions using funds

    2.  Insufficient contributions to plans (ARC not being funded).

    Other reason may be return on investments has decreased.
  8. Define Defined Benefit Plan.
    A pension plan obliging the sponsor to make specified dollar payments to qualify employees. Pension obligations are effectively the debt obligation of the plan sponsor.

    DB guarantees employees fixed periodic payments.
  9. What is the formula for Define Benefit Plan?
    2% x years of credited service x average final compensation.

    Retirement income usually based on average income during last 3-5 years or 3-5 years highest salary.

    1/12 of average annual compensation of the 5 best years of the last 10 years of credible service
  10. Define Defined Contribution Plan
    Defined Contribution Plan is a pension plan where a sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants.

    Like a 401K plan.
  11. Which plan quarantees employees fixed periodic payments Defined Benefit Plan or Defined Contribution Plan?
    Defined Benefit Plan
  12. What is the Jensen Index?
    Jensen Index is used to indicate if the fund manager outperformed the market.
  13. 3 trillion pension plans are managed
  14. What is Return on Equity (ROE)?
    ROE is an indicator of profitability.

    Ratio of net income to total equity is the return of equity.

    Common stockholder

    How a company is using its money.
  15. What is the ROE test?
    Determined by dividing the net income for the past 12 months by common stockholder equity (adjusted for stock splits)
  16. Question #4 Investment manager style

    Value, yield and small cap ??????
  17. What are the FS for Fire and Police Pensions?
    Chapter 175 - Fire

    Chapter 185 - Police
  18. What is the calculation of Average Final Compensation?
    2% x years of credited service x average final compensation.

    Retirement income usually based on average income during last 3-5 years or 3-5 years highest salary.

    1/12 of average annual compensation of the 5 best years of the last 10 years of credible service
  19. Who sets contribution for FRS (Florida Retirement System)
    The State sets contribution rates for the FRS.
  20. Can Local Law Plan override state statutues
    Yes, but can not be less.
  21. When does NPO arise?
    Net Pension Obligation (NPO) occurs when Annual Retirement Contributions (ARC) are not funded.

    NPO is the difference between employer required contribution vs actual contribution.
  22. What type of fund is a Pension Fund?

    What are transactions recorded?
    Fiduciary other peoples money!!!

    Transactions on the Statemen to Activities is as additions and deductions.
  23. Who is on the Board of Trustees for Pensions?
    • Five members
    • -Two - Full-time firefighters ACTIVE
    • -Two - legal residents appointed by a governing body
    • -One - chosen by majority of the other four members

    If plan is joint Fire & Police one full-time active fire and one full-time active police

    Each serve 2 year term may succeed himself.
  24. What is the excise tax the State funds Fire Pensions with?
    State excise tax is on real and personal property insurance 1.85%
  25. What is the excise tax the State funds Police Pensions with?
    State excise tax is on auto insurance
  26. What can pension invest in?
    1. Not more thatn 5% in common stock or capital stock, not more than 5% of aggregate

    2. Not more than 25% in foreign securities

    3. Hire professional consultants.
  27. Pensions need to have a what type of review and how often?
    Performance review every 3 years.
  28. What can be paid from Pension Trust Fund?
    • Actuary
    • Legal Counsel
    • Technical Advisors
    • Performance Review - every 3 years (at least)
    • Money manager (may be more than one)
    • Custodians - reports, pay retirees
  29. Fire retirement age
    • 10yrs - age 55
    • 25 yrs - age 52
  30. True or False?

    A municipality may exceed F.S. but can not provide less in a local pension plans
    True

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