Rescue Case: The budget director says, I know the governor is going to ask what the state would have to do to bail out the current system. So, assume the conditions of the base case, except for the state contribution factor. Run a what-if scenario with that factor until you reach a ratio of 80 percent. How big a factor is needed? Call this question the rescue case. How much extra money would the state have to contribute versus the base case contribution by the state? Please provide logical explanation.

2016 2017 2018 2019 2021 2023 2024 2025 25 25 25 CONSTANTS Retiree Years of Service Average Increase in Teacher Salary Retiree Rate Mortality Rate Expected Average Final Salary Expected Administrative Expense 25 0.01 0.04 0.05 82,000 $ 25 0.01 0.04 25 0.01 0.04 0.05 83,648 $ $25,250,000 2020 25 0.01 0.04 0.05 85,330 $ $25,757,525 0.01 0.04 0.05 84,485 $ $25,502,500 2022 25 0.01 0.04 0.05 87,045 $ $26,275,251 0.01 0.04 0.05 86,183 $ $26,015,100 25 0.01 0.04 0.05 87,915 $ $26,538,004 0.05 25 0.01 0.04 0.05 88,794 $ $26,803,384 0.01 0.04 0.05 89,682 $27,071,418 $ 82,820 $ $25,000,000 NA Value INPUTS Cost of Living Adjustment Long Term Rate of Return Productivity Factor Employee Contribution Rate Final Salary Give Back State Contribution Factor 0.03 0.075 0.005 0.095 $ 2.5 SUMMARY OF KEY RESULTS NPV of Unfunded Liability Ratio of Assets to Liability NPV $ Value 20,859,733,467 66% 2016 2018 2020 $ 68,500 $ 133,000 NA 101,500 CALCULATIONS Average Teacher Salary Number of Active Teachers Number of New Retirees Number of Retirees Total Teacher Compensation Employee Contribution to Fund State Contribution to Fund Average Retiree Benefit Expected Benefits Payout 2017 69,185 $ 132,335 5320 101,745 9,155,596,975 $ 869,781,713 $ 2,174,454,282 $ 46,918 $ 4,773,624,090 $ 2019 70,576 $ 131,014 5266 102,118 9,246,394,082 $ 878,407,438 $ 2,196,018,595 $ 47,861 $ 4,887,425,928 $ 69,877 $ 131,673 5293 101,950 9,200,894,470 $ 874,084,975 $ 2,185,212,437 $ 47,387 $ 4,831,074,605 $ 2021 71,994 $ 129,706 5214 102,353 9,338,078,205 $ 887,117,429 $ 2,217,793,574 $ 48,823 $ 4,997,136,493 $ 2022 72,714 $ 129,057 5188 102,423 9,384,267,516 $ 891,505,414 $ 2,228,763,535 $ 49,311 $ 5,050,559,613 $ 71,281 $ 130,358 5240 102,252 9,292,097,441 $ 882,749,257 $ 2,206,873,142 $ 48,339 $ 4,942, 777,637 $ 2023 73,441 $ 128,411 5162 102,463 9,430,667,130 $ 895,913,377 $ 2,239,783,443 $ 49,804 $ 5,103,057,365 $ 2024 74,176 $ 127,768 5136 102,475 9,477,278,836 $ 900,341,489 $ 2,250,853,724 $ 50,302 $ 5,154,691,562 $ NA 2025 74,917 127,129 5110 102,461 9,524,179,380 904,797,041 2,261,992,603 50,805 5,205,527,209 $ $ $ $ $ NA NA NA NA 2020 2016 NA NA NA FUND BALANCE STATEMENT Beginning Balance Add: Employee Contribution Add: State Contribution Add: Income on Investments Less: Benefits Payout Less: Administrative Expenses Ending Balance $ $ $ $ $ 2017 40,000,000,000 $ 869,781,713 S 2,174,454,282 $ 3,000,000,000 S 4,773,624,090 $ $25,000,000 41,245,611,904 $ 2018 41,245,611,904 $ 874,084,975 $ 2,185,212,437 $ 3,093,420,893 $ 4,831,074,605 $ $25,250,000 42,542,005,603 $ 2019 42,542,005,603 $ 878,407,438 $ 2,196,018,595 $ 3,190,650,420 $ 4,887,425,928 $ $25,502,500 43,894,153,628 $ 2021 45,307,302,388 $ 887,117,429 $ 2,217,793,574 $ 3,398,047,679 $ 4,997,136,493 $ $26,015,100 46,787,109,477 $ 43,894,153,628 $ 882,749,257 $ 2,206,873,142 $ 3,292,061,522 $ 4,942,777,637 $ $25,757,525 45,307,302,388 $ 2022 46,787,109,477 $ 891,505,414 $ 2,228,763,535 $ 3,509,033,211 $ 5,050,559,613 $ $26,275,251 48,339,576,773 $ 2023 48,339,576,773 $ 895,913,377 $ 2,239,783,443 $ 3,625,468,258 $ 5,103,057,365 $ $26,538,004 49,971,146,482 $ 2024 49,971,146,482 $ 900,341,489 $ 2,250,853,724 $ 3,747,835,986 $ 5,154,691,562 $ $26,803,384 51,688,682,735 $ 2025 51,688,682,735 904,797,041 2,261,992,603 3,876,651,205 5,205,527,209 $27,071,418 53,499,524,957 NA NA NA 40,000,000,000 $ 2016 2017 2019 2020 2024 NA $ FUND LIABILITY Expected Benefits Payout Net Present Value of Payouts NPV of Unfunded Liability Ratio of Assets to Liability NPV NA 4,773,624,090 $ $62,105,345,371 20,859,733,467$ 66% 2018 4,831,074,605 $ $61,989,622,184 19,447,616,581 $ 69% 4,887,425,928 $ $61,807, 769,243 17,913,615,614 $ 71% 4,942,777,637 $ $61,555,926,008 16,248,623,620 $ 74% 2021 4,997,136,493 $ $61,229,842,822 14,442,733,345$ 76% 2022 5,050,559,613 $ $60,824,944,541 12,485,367,769 $ 79% 2023 5,103,057,365 $ $60,336,255,769 10,365,109,287 $ 83% 5,154,691,562 $ $59,758,417,586 8,069,734,851 $ 86% 2025 5,205,527,209 $59,085,607,342 5,586,082,385 91% NA $ NA Conservative Moderate Aggresive 4.0 8.0 12.0 Scenario Summary Current Values: Changing Cells: State Contribution Factor 2.5 Result Cells: Beginning_Balance_2017 $ 40,000,000,000 $ NPV_Unfunded_Liability $ 20,859,733,467 $ Ratio_of_Assets_to_Liability_NP 66% Notes: Current Values column represents values of changing cells at time Scenario Summary Report was created. Changing cells for each scenario are highlighted in gray. 40,000,000,000 19,555,060,898 69% $ $ 40,000,000,000 $ 16,075,934,047 $ 74% 40,000,000,000 12,596,807,197 80% 2016 2017 2018 2019 2021 2023 2024 2025 25 25 25 CONSTANTS Retiree Years of Service Average Increase in Teacher Salary Retiree Rate Mortality Rate Expected Average Final Salary Expected Administrative Expense 25 0.01 0.04 0.05 82,000 $ 25 0.01 0.04 25 0.01 0.04 0.05 83,648 $ $25,250,000 2020 25 0.01 0.04 0.05 85,330 $ $25,757,525 0.01 0.04 0.05 84,485 $ $25,502,500 2022 25 0.01 0.04 0.05 87,045 $ $26,275,251 0.01 0.04 0.05 86,183 $ $26,015,100 25 0.01 0.04 0.05 87,915 $ $26,538,004 0.05 25 0.01 0.04 0.05 88,794 $ $26,803,384 0.01 0.04 0.05 89,682 $27,071,418 $ 82,820 $ $25,000,000 NA Value INPUTS Cost of Living Adjustment Long Term Rate of Return Productivity Factor Employee Contribution Rate Final Salary Give Back State Contribution Factor 0.03 0.075 0.005 0.095 $ 2.5 SUMMARY OF KEY RESULTS NPV of Unfunded Liability Ratio of Assets to Liability NPV $ Value 20,859,733,467 66% 2016 2018 2020 $ 68,500 $ 133,000 NA 101,500 CALCULATIONS Average Teacher Salary Number of Active Teachers Number of New Retirees Number of Retirees Total Teacher Compensation Employee Contribution to Fund State Contribution to Fund Average Retiree Benefit Expected Benefits Payout 2017 69,185 $ 132,335 5320 101,745 9,155,596,975 $ 869,781,713 $ 2,174,454,282 $ 46,918 $ 4,773,624,090 $ 2019 70,576 $ 131,014 5266 102,118 9,246,394,082 $ 878,407,438 $ 2,196,018,595 $ 47,861 $ 4,887,425,928 $ 69,877 $ 131,673 5293 101,950 9,200,894,470 $ 874,084,975 $ 2,185,212,437 $ 47,387 $ 4,831,074,605 $ 2021 71,994 $ 129,706 5214 102,353 9,338,078,205 $ 887,117,429 $ 2,217,793,574 $ 48,823 $ 4,997,136,493 $ 2022 72,714 $ 129,057 5188 102,423 9,384,267,516 $ 891,505,414 $ 2,228,763,535 $ 49,311 $ 5,050,559,613 $ 71,281 $ 130,358 5240 102,252 9,292,097,441 $ 882,749,257 $ 2,206,873,142 $ 48,339 $ 4,942, 777,637 $ 2023 73,441 $ 128,411 5162 102,463 9,430,667,130 $ 895,913,377 $ 2,239,783,443 $ 49,804 $ 5,103,057,365 $ 2024 74,176 $ 127,768 5136 102,475 9,477,278,836 $ 900,341,489 $ 2,250,853,724 $ 50,302 $ 5,154,691,562 $ NA 2025 74,917 127,129 5110 102,461 9,524,179,380 904,797,041 2,261,992,603 50,805 5,205,527,209 $ $ $ $ $ NA NA NA NA 2020 2016 NA NA NA FUND BALANCE STATEMENT Beginning Balance Add: Employee Contribution Add: State Contribution Add: Income on Investments Less: Benefits Payout Less: Administrative Expenses Ending Balance $ $ $ $ $ 2017 40,000,000,000 $ 869,781,713 S 2,174,454,282 $ 3,000,000,000 S 4,773,624,090 $ $25,000,000 41,245,611,904 $ 2018 41,245,611,904 $ 874,084,975 $ 2,185,212,437 $ 3,093,420,893 $ 4,831,074,605 $ $25,250,000 42,542,005,603 $ 2019 42,542,005,603 $ 878,407,438 $ 2,196,018,595 $ 3,190,650,420 $ 4,887,425,928 $ $25,502,500 43,894,153,628 $ 2021 45,307,302,388 $ 887,117,429 $ 2,217,793,574 $ 3,398,047,679 $ 4,997,136,493 $ $26,015,100 46,787,109,477 $ 43,894,153,628 $ 882,749,257 $ 2,206,873,142 $ 3,292,061,522 $ 4,942,777,637 $ $25,757,525 45,307,302,388 $ 2022 46,787,109,477 $ 891,505,414 $ 2,228,763,535 $ 3,509,033,211 $ 5,050,559,613 $ $26,275,251 48,339,576,773 $ 2023 48,339,576,773 $ 895,913,377 $ 2,239,783,443 $ 3,625,468,258 $ 5,103,057,365 $ $26,538,004 49,971,146,482 $ 2024 49,971,146,482 $ 900,341,489 $ 2,250,853,724 $ 3,747,835,986 $ 5,154,691,562 $ $26,803,384 51,688,682,735 $ 2025 51,688,682,735 904,797,041 2,261,992,603 3,876,651,205 5,205,527,209 $27,071,418 53,499,524,957 NA NA NA 40,000,000,000 $ 2016 2017 2019 2020 2024 NA $ FUND LIABILITY Expected Benefits Payout Net Present Value of Payouts NPV of Unfunded Liability Ratio of Assets to Liability NPV NA 4,773,624,090 $ $62,105,345,371 20,859,733,467$ 66% 2018 4,831,074,605 $ $61,989,622,184 19,447,616,581 $ 69% 4,887,425,928 $ $61,807, 769,243 17,913,615,614 $ 71% 4,942,777,637 $ $61,555,926,008 16,248,623,620 $ 74% 2021 4,997,136,493 $ $61,229,842,822 14,442,733,345$ 76% 2022 5,050,559,613 $ $60,824,944,541 12,485,367,769 $ 79% 2023 5,103,057,365 $ $60,336,255,769 10,365,109,287 $ 83% 5,154,691,562 $ $59,758,417,586 8,069,734,851 $ 86% 2025 5,205,527,209 $59,085,607,342 5,586,082,385 91% NA $ NA Conservative Moderate Aggresive 4.0 8.0 12.0 Scenario Summary Current Values: Changing Cells: State Contribution Factor 2.5 Result Cells: Beginning_Balance_2017 $ 40,000,000,000 $ NPV_Unfunded_Liability $ 20,859,733,467 $ Ratio_of_Assets_to_Liability_NP 66% Notes: Current Values column represents values of changing cells at time Scenario Summary Report was created. Changing cells for each scenario are highlighted in gray. 40,000,000,000 19,555,060,898 69% $ $ 40,000,000,000 $ 16,075,934,047 $ 74% 40,000,000,000 12,596,807,197 80%