Financial Strength
O ver the years, PE Partners has prioritized financial strength and transparency for our members to safeguard our ability to provide long-term service to Tennessee’s governmental entities and the citizens they serve. To navigate ongoing market fluctuations, PEP conducted a rate study with independent actuaries in 2023, ensuring adequate reserves, accurate base rates and continued support for our members in the face of potential catastrophic losses.
For fiscal year 2023, loss and loss adjustment expenses accounted for approximately 56% of overall expenses. Reinsurance premiums ceded (19.45%), general and administrative expenses (15.15%), and policy acquisition costs (9.36%) accounted for the additional 44% of overall expenses. PE Partners is proud to share our financials with our membership. This allows you to personally assess and understand the financial stability that we purposefully work to achieve every year — with the value of each member in mind.
Dividend Payment
Be committed to being financially sound to ensure our members are served into the future by being thoughtful and cost-effective with time, skills and resources. Promote professionalism and best practices in every aspect of our work, seeking to maximize every opportunity to fulfill our mission. Stewardship PEP Value
A value of participating in a risk-sharing pool is the return of excess surplus directly to members. Due to the economic challenges and associated risks that faced our country in 2023, we made the difficult decision to withhold any distribution of dividends to members. This was not a reflection of PE Partners’ current fiscal health, but was merely a conservative approach to help ensure that we remain financially healthy as we serve our membership in the coming years.
This is only the second time in our annual dividend program’s 26-year history that PEP has not declared a dividend. Since 1996, we have been able to return $130 million in dividends directly to our members. While our evaluation is ongoing, it is our sincere hope that our Board of Directors will be able to declare a dividend for the 2024-25 year.
Statement of Revenues, Expenses and Changes in Net Position as of June 30, 2023
Statement of Net Position as of June 30, 2023
2023
2022
Current assets
$251,188,664
Premises, property and equipment (net) Right-to-use subscription-based IT asset
$8,775,124 $689,428 $750,000 $2,833,969
Operating revenues Operating expenses
$65,899,543 ($58,851,497)
$19,595,538 ($62,637,562) ($43,042,024)
Other assets
Operating Income
$7,048,046
Deferred outflows of resources (pension)
Total Assets and Deferred Outflows of Resources
$264,237,185
Non-operating revenues (expenses)
-
$350
Total current liabilities Net pension liability
$144,693,229
Change in Net Position
$7,048,046
($43,041,674)
$2,261,648 $344,345
Subscription-based IT liability, exc current portion
Deferred inflows of resources (pension)
$17,773
Beginning net position
$109,802,804
$160,844,478 ($8,000,000) $109,802,804
Dividends (declared and lapsed)
($69,339)
Total Liabilities and Deferred Inflows of Resources
$147,316,995
Ending Net Position
$116,920,190
Investment in capital assets
$8,775,124
Unrestricted
$108,145,066 $116,920,190
Total Net Position
Total Liabilities and Net Position
$264,237,185
18 Annual Report 2023
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