Exhibit II
Page 1 of 2
OKLAHOMA PUBLIC EMPLOYEES RETIREMENT PLAN
ADMINISTERED BY THE OKLAHOMA PUBLIC EMPLOYEES RETIREMENT SYSTEM
NOTE TO EXHIBIT I REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2000
Actuarial Assumptions and Methods
The information presented in the required supplemental schedules was determined as part of the
actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation
date, July 1, 2000, is as follows:
Funding Method
Costs are developed using the entry age normal cost method (based on a level percentage of
covered payrolls). Under the method used for this plan, the accrued liability and the present
value of future normal costs are determined by summing the individual entry age results for each
participant. The normal cost is then determined in aggregate by spreading the present value of
future normal costs as a level percentage of expected future covered payrolls. Entry age is
defined as the first day service is credited under the Plan.
Experience gains and losses, i.e., decreases or increases in accrued liabilities attributable to
deviations in experience from the actuarial assumptions, adjust the unfunded actuarial accrued
liability.
Asset Valuation Method
For actuarial purposes, assets are determined equal to the prior year's actuarial value of assets
plus cash flow (excluding realized and unrealized gains or losses) for the year ended on the
valuation date assuming 7.5% interest return. Prior year's unrecognized gains and losses are
added to this amount to develop expected actuarial value. The expected actuarial value is then
compared to the market value of the assets at the valuation date, and 20% of any gain (loss) for
the last five years is added to the expected actuarial value. The gain (loss) is amortized over five
years with the actuarial value of the assets being constrained to a range of 80% to 120%) of the
market value at the valuation date.
Amortization
The unfunded actuarial accrued liability for valuations as of July 1, 1998, and prior were
amortized on a level dollar method over a 25-year closed period from July 1, 1987. For the
July 1, 1999 and subsequent valuation, the amortization period was changed to 40 years from
July 1, 1987 (27 years remaining as of July 1, 2000).