Growing For The Future
Chairman’s Message...2
Program Highlights...4
Financial Statements ...14
Notes to Financial Statements...18
Report of Independent Certified Public Accountants...22
Actuarial Report ...23
Program Partners...24
The Florida Prepaid College Program is helping Florida families financially prepare for college. The program locks in the
cost of college tuition, local fees and dormitory housing at today’s prices. What you pay now is financially guaranteed by
the State of Florida — no matter how much college costs increase in the future.
Flexible
When your child is ready for college, Florida Prepaid covers the actual cost at Florida’s
11 public universities and 28 community colleges. Or you can transfer the value of the
plan to most private colleges in Florida, select technical schools and most out-of-state
colleges.
Affordable
The price depends on the plan you select and the age of your child. Payments can be
made in a single lump sum, monthly or over five years.
Guaranteed
With Florida Prepaid, you don’t have to worry about the stock market or if you will have
enough money saved. You cannot lose your money, and you can get a refund anytime,
for any reason —
guaranteed
.
C
HILDREN
G
ROW
E
VERY
D
AY
,
AND THE COST OF COLLEGE IS GROWING JUST AS FAST.
College tuition
in Florida has
increased
126 percent in
the last 15 years
and is expected
to
quadruple
by
the time today’s
newborn goes
to college.
Enrollment Growing
The Florida Prepaid College Program remains the largest, most successful program of its kind in the country. This year, 62,779 new plans were purchased and enrollment continues to grow. Based on the preliminary results, we expect to exceed 735,000 total contracts sold statewide, by the end of fiscal year 2001-02.
Florida Prepaid is helping Florida families of many different backgrounds and from all corners of the state save for college for their children.
Today, 63 percent of all new Florida Prepaid families earn less than $70,000 a year, as compared to 60 percent of all Florida households.
We are committed to diversity, having increased minority enrollment within the last five years to 24 percent of all new Florida Prepaid families. Minority enrollment grew again this year with minorities representing 27 percent of all new Florida Prepaid families, as compared to 22 percent of Florida’s total population.
And while the majority of Florida Prepaid families live in the more populated areas of the state, program awareness and participation continue to grow in communities both large and small.
Assets Growing
This Annual Report includes the audited financial statements prepared by our
independent auditors, PricewaterhouseCoopers, and the Actuarial Report prepared by
Ernst & Young, for the fiscal year ending June 30, 2001.
The financial statements reflect total assets of $4.4 billion and net assets, adjusted for security lending obligations, of $3.4 billion. The program remains a model of efficiency with operating expenses of less than three-tenths of 1 percent of net assets. Again this year, the annual actuarial review confirmed that the program remains actuarially sound. As of fiscal year-end, the expected value of assets exceeded the expected value of liabilities by $410 million.
Investment performance is another indicator of our strength and stability. Our investments are structured to ensure that the program can meet its projected liabilities now and in the future.
With target asset allocations of 88 percent fixed income and 12 percent equities, our investment strategy is considered conservative by most industry standards. Our strategy has proven effective, averaging an 11 percent annualized return, since inception.
Helping Florida families
Helping
The Florida Prepaid College
Stanley G. Tate Chairman
Program Growing
We expanded the program this year, intro-ducing several new benefits.
Earnings on Florida Prepaid are now tax-free as a result of legislation passed by Congress that exempts qualified 529 plan withdrawals from federal income tax.
The Florida Legislature authorized Florida Prepaid to pay qualified out-of-state colleges the same rate it pays a public college in Florida and to change the formula for calculating scholarship and death/disability refunds, increasing these payments for most customers. For the first time, Florida Prepaid students had the opportunity to use their plan at not-for-profit technical centers in Florida or for technical education courses at a Florida community college. This year, 260 students took advantage of this new benefit. We also continued development of the new 529 Florida College Savings Plan. This new plan will give families another way to save for college tuition, fees and housing and for other college expenses not covered by Florida Prepaid, including books and graduate school. The new plan will allow families to save for almost any college, anywhere in the United States. There will be no residency requirement, providing a new opportunity for Florida
grandparents to save for college for their grandchildren who may live out of state. The new plan will not be guaranteed like Florida Prepaid. It will offer a range of investment options. Customers will have the flexibility to decide how often and how much to invest. Like Florida Prepaid, the earnings on qualified withdrawals from the new 529 Florida College Savings Plan will be tax-free.
Growing For The Future
Since inception, Florida Prepaid has helped 85,000 children go to college, and the number of Florida Prepaid students in college is increasing each year.
We will continue to grow the Florida Prepaid College Program. Because as we grow so does the number of Florida children who are financially prepared for college and for the future.
Cordially yours,
Stanley G. Tate Chairman
Florida Prepaid College Board
Florida children grow.
ADMINISTRATION
The Florida Prepaid College Program is
an agency of Florida government,
admin-istered by the independent Florida
Prepaid College Board.
A model public-private partnership, the
program contracts with various private
partners for financial, investment,
customer relations, marketing and other
professional support services. The staff,
just 10 in all, manages the day-to-day
operation of the program.
Assets and Expenses
The program is financially strong. Net
assets, adjusted for securities lending
obligations, reached $3.4 billion this year.
Administrative expenses were less than
three-tenths of 1 percent of net assets or
just $9.5 million. The program is
self-supporting and, therefore, receives no
public funding.
OUR NEW 529 PLAN
Florida Prepaid is the largest, most
successful 529 college prepaid plan in the
country. Building on that tradition, the
Florida Prepaid College Board focused
much of this year on the development of
the new 529 Florida College Savings Plan.
This new plan will complement Florida
Prepaid. It will give families another way
to save for college tuition, fees and
housing and for other college expenses
not covered by Florida Prepaid, including
books and graduate school. The new plan
will also help families save for the
addi-tional costs of most private and
out-of-state colleges.
The new plan will not be guaranteed like
Florida Prepaid. It will offer a range of
investment options. Customers will have
the flexibility to decide how often and
how much to invest. The earnings on
qualified withdrawals will grow tax-free.
OTHER 2001 ACTIVITIES
Now Tax-Free
— Earnings on Florida
Prepaid are now tax-free. In 2001,
Congress passed legislation that exempts
earnings on qualified withdrawals from
529 plans — like Florida Prepaid — from
any federal income tax.
New Out-of-State Policy
— The Florida
Legislature authorized the program to pay
qualified out-of-state colleges the same
rate it pays a public college in Florida,
increasing the out-of-state benefit amount
for most customers.
Out-of-state colleges
were previously paid
the same rate as a public
college in Florida or
the original amount
the customer paid
for the plan plus
5 percent interest,
whichever was
less. Currently
4 percent of all
Florida Prepaid
students are
enrolled out
of state.
Refund Policy
Change
— New
legislation has
changed the formula
for calculating
scholarship and
death/disability
refunds, increasing the
refund amount for
most customers.
Scholarship and
death/disability refunds
are now based on the value of the plan
when the refund is issued. The program
previously paid the redemption value of
the plan at a public college in Florida or
the original amount the customer paid for
the plan plus 5 percent interest,
whichever was less.
Technical Training Expanded
— Last
year, the Florida Legislature expanded
access to technical training by allowing
students to use their prepaid plan at
not-for-profit technical centers in Florida and
for technical education courses offered by
Florida’s community colleges. For the first
time this year, Florida Prepaid students
took advantage of this new program
feature.
College Enrollment Grows
— This year,
43,038 Florida Prepaid students attended
college — a new all-time high.
Assets Expenses
$3.4 Billion $9.5 Million
ASSETS & EXPENSES
Net assets and expenses as of fiscal year-end 2000-01. Assets do not include $924 million in securities lending collateral.
The new 529 Florida
College Savings Plan.
Another way to
save for college.
89 90 91 92 93 94 95 96 97 98 99 00 01 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
TOTAL CONTRACTS SOLD = 658,196
Contracts
Enrollment Year
89 90 91 92 93 94 95 96 97 98 99 00 01
TOTAL CHILDREN ENROLLED = 489,294
Childr en Enrollment Year 0 100,000 200,000 300,000 400,000 500,000 Monthly 46% 27% 27% 5 Years Lump Sum
PAYMENT OPTIONS
By Plan Type - Cumulative Tuition PlanMonthly 5 Years Lump Sum
Local Fee Plan
Monthly 5 Years Lump Sum Dormitory Plan 36% 44% 33% 27% 31% 29%
CONTRACT SALES
Florida families purchased 62,779 new
tuition, local fee and dormitory plans this
year — 11 percent more than last year.
Since the program started, there have
been 658,196 total plans purchased
statewide.
The program averages approximately
37,000 new tuition plans each year. Close
to 38 percent of new customers purchase
the local fee plan, and 23 percent of all
customers also have a dormitory plan.
Children Enrolled
This year, 35,875 Florida children were
enrolled. Total Florida Prepaid enrollment
has grown to 489,294 children statewide.
Payment Options
Payments can be made in a lump sum,
over five years or monthly until the year
the child is projected to start college.
The payment options selected shift
slightly from year-to-year but have not
changed much over time. Most
customers, whether purchasing a tuition
plan, local fee plan or dormitory plan,
select the monthly payment option.
Sales Revenue
Projected revenue for all new plans sold
this year is $382 million. Total projected
revenue for all plans sold, since the
program started, is now $2.82 billion.
All tuition, local and dormitory plans purchased since the program started, including active, depleted and cancelled accounts. In 1998, sale of the dormitory plan was temporarily suspended, resulting in a one-year decline in sales. In 1999, sale of the dormitory plan was reinstated and the local fee plan was first introduced, resulting in a one-year spike in sales.
Based on total tuition plans purchased since the program started. Each child may have only one active tuition plan.
Payment options selected for all plans purchased.
Monthly 5 Years Lump Sum TOTAL: $2.82 BILLION $1.35 Billion $761 Million $714 Million
PROJECTED SALES REVENUE
By Payment Option - CumulativeRevenue and receivables at actual payment amounts. Does not include investment income. Does not include cancelled accounts.
Tuition Plan
Florida families purchased 35,875 new
tuition plans this year. Since the program
started, 489,294 total tuition plans have
been purchased.
TUITION PLAN — BY YEAR
1989
45,751
1990
36,048
1991
26,172
1992
28,811
1993
34,954
1994
45,255
1995
41,542
1996
39,199
1997
40,968
1998
40,683
1999
39,223
2000
34,813
2001
35,875
TOTAL
489,294
New customers purchased 79 percent of
all tuition plans this year. Current
customers, who already had at least one
other child enrolled in the program,
purchased the remaining 21 percent.
The tuition plan covers the matriculation,
capital improvement, building and
finan-cial aid fees charged by Florida’s public
colleges. There are other fees charged by
Florida’s public colleges, including local
fees, which are not covered by the tuition
plan. The tuition plan may be purchased
for a child — newborn through the
eleventh grade. To qualify, the child or the
child’s parent must be a Florida resident.
There are three tuition plans:
•
Four-Year University Plan — Covering
120 undergraduate credit hours at a
state university.
•
2+2 Plan — Covering 60 credit hours at
a community college and 60
undergrad-uate credit hours at a state university.
•
Two-Year Community College Plan —
Covering 60 community college credit
hours.
Since the program started, 74 percent of
all customers have selected the four-year
university plan, 21 percent have selected
the 2+2 plan and 5 percent have selected
the two-year community college plan.
Again this year, the four-year university
plan was the most popular, representing
72 percent of all new tuition plans. The
2+2 plan made up 23 percent and the
two-year community college plan
repre-sented 5 percent of all new tuition plans.
Local Fee Plan
This year, 19,139 new local fee plans were
purchased. The local fee plan was
intro-duced three years ago, and in that time,
54,698 total local fee plans have been
purchased.
LOCAL FEE PLAN — BY YEAR
1999
20,545
2000
15,014
2001
19,139
TOTAL
54,698
The local fee plan was introduced in 1999.
The local fee plan covers the required
student activity and service, health and
athletic fees charged by Florida’s public
colleges. To qualify for the local fee plan,
the child must have a tuition plan and be
in the eighth grade or younger.
The local fee plan may be purchased with
a new tuition plan or may be added to an
existing tuition plan, anytime prior to the
child completing the eighth grade. This
year, 77 percent of all new local fee plans
were purchased with a new tuition plan;
23 percent were added to an existing
tuition plan.
The local fee plan supplements the tuition
plan and, therefore, must be the same
type as the corresponding tuition plan.
Like the tuition plan, there are three local
fee plans: the four-year university plan,
the 2+2 plan and the two-year
commu-nity college plan.
4-Year University Plan 72% 23% 5% 2+2 Plan 2-Year Community College Plan
TUITION PLAN TYPE — 2001
Most customers
buy the
four-year university
tuition plan.
Close to 38 percent
of new customers
purchase the
local fee plan.
This year, the four-year university plan
represented 76 percent, the 2+2 plan
22 percent, and the two-year community
college plan 2 percent of all new local fee
plans.
Dormitory Plan
In 2001, 7,765 new dormitory plans were
purchased bringing total dormitory plans
sold to 114,204.
DORMITORY PLAN — BY YEAR
1989
12,900
1990
10,716
1991
8,004
1992
7,692
1993
9,513
1994
11,106
1995
9,721
1996
8,998
1997
10,544
1998
0
1999
10,509
2000
6,736
2001
7,765
TOTAL
114,204
The dormitory plan was not offered in 1998 pending clarification of federal legislation impacting the tax status of the plan. The dormitory plan was re-introduced in 1999.
The dormitory plan covers the cost of a
standard, double-occupancy,
air-condi-tioned dorm room. The value of the plan
may be applied toward the cost of other
housing managed or designated by a
university, including some fraternity and
sorority houses, and select community
college residence facilities. To qualify for
the dormitory plan, the child must have a
tuition plan and be in the eighth grade or
younger.
Like the local fee plan, the dormitory plan
may be purchased with a new tuition plan
or may be added to an existing tuition
plan, anytime prior to the child completing
the eighth grade. This year, 82 percent of
all new dormitory plans were purchased
with a new tuition plan; 18 percent were
added to an existing tuition plan.
The dormitory plan may be purchased
with a four-year university tuition plan or
a 2+2 tuition plan. It is offered in one-year
increments, up to five years.
The purchasing patterns for the dormitory
plan have been consistent over time. This
year, the majority of customers purchased
the one-year plan or two-year plan. Less
than one quarter selected the four-year
plan. The three-year and five-year plans
each made up only 1 percent of sales.
4-Year University Plan 76% 22% 2% 2+2 Plan 2-Year Community College Plan
LOCAL FEE PLAN TYPE — 2001
1-Year Plan2-Year Plan 3-Year Plan 4-Year Plan 5-Year Plan 39% 23% 1% 36% 1%
DORMITORY PLAN TYPE — 2001
On average,
23 percent of all
customers have
a dormitory plan.
Age of Beneficiary
When saving for college, financial experts
agree the sooner you start the better.
Florida Prepaid families are getting an
early start on saving for college.
Over the years, more Florida Prepaid
plans have been purchased for children
1 year old or younger than any other
single age group. Of all the children
enrolled this year, 28 percent were 1 year
old or younger.
The trend toward enrolling younger
chil-dren has continued in recent years. On
average today, 78 percent of all children,
when enrolled, are elementary school age
or younger, 16 percent are in middle
school and 6 percent are in high school.
Relationship
On average, 88 percent of all Florida
Prepaid plans have been purchased by a
parent, 10 percent by a grandparent and
the remaining 2 percent by another
rela-tive, a friend, a business or a foundation.
The relationship between the purchaser
and the child is self-reported at the time
of enrollment.
Family Income
Florida Prepaid is helping put college
within financial reach of the average
Florida family.
Today, 63 percent of all new Florida
Prepaid families earn less than $70,000 a
year, as compared to 60 percent of all
Florida households.
Florida Prepaid family income parallels
the income of most Florida households,
except among lower income families
earning less than $20,000 a year. For
these families, studies suggest that saving
for college is important, but because of
other competing financial needs, putting
money aside for college is often not
possible.
≤1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17+ 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000BENEFICIARY AGE
Age at Time of Purchase
Childr
en
OUR CUSTOMERS
Any person or organization can purchase a Florida Prepaid plan, including a parent, grandparent, friend, community group, trust or
business. The purchaser is the owner of the plan. The plan is purchased for a child (beneficiary) — newborn through the eleventh grade.
To qualify, the child or the child’s parent must be a Florida resident.
Less Than $20,000 4% 16%
$20,000 - $39,000 19% 17%
$40,000 - $69,000 40% 27%
$70,000 or More 37% 40%
MEDIAN FLORIDA HOUSEHOLD INCOME:U.S. Department of Commerce, Bureau of the Census, 2000.FLORIDA PREPAID:Based on new data collected for families enrolled in 1998-2001. Family income is self-reported at time of purchase with 60 percent of all customers responding.FLORIDA HOUSEHOLDS:University of Florida, Bureau of Economic and Business Research, 2000.
98 percent of customers said that they would
recommend Florida Prepaid to a friend.
FAMILY INCOME
Median Florida Household Income = $55,351
Race
More than 15.6 million people live in
Florida today. Close to 78 percent are
white and 22 percent are minorities. In
comparison, 73 percent of all Florida
Prepaid families who enrolled this year
are white and 27 percent are minorities.
Florida Prepaid encourages racial and
ethnic diversity through education and
promotion in traditional minority
markets. As a result, minority enrollment
has grown.
In the first eight years of the program,
minorities represented 15 percent of total
enrollment. Within the last five years,
minority participation has increased
60 percent to 24 percent of all new
Florida Prepaid families.
Where They Live
Most Florida Prepaid customers live in
the more populated, metropolitan areas of
the state.
Nearly 46 percent of all customers
currently live in South Florida, 32 percent
in Central Florida and 15 percent in
North Florida. The remaining 7 percent
now reside out of state or their address is
unknown.
Close to 60 percent of all new Florida
Prepaid customers this year live in the
six largest populated counties in Florida.
Program awareness and participation,
however, continue to grow in
communi-ties both large and small.
Top Counties - 2001
Families
County Rank
Miami-Dade 18% 1 Broward 15% 2 Palm Beach 9% 3 Hillsborough 7% 4 Pinellas 6% 5 Orange 5% 6
Customers By County
Alachua ...7,335 Baker ...287 Bay...2,921 Bradford ...362 Calhoun...143 Clay...4,571 Columbia ...795 Dixie ...94 Duval ...19,276 Escambia...4,698 Flagler ...1,069 Franklin ...91 Gadsden ...720 Gilchrist ...113 Gulf...172 Hamilton...113 Holmes ...195NORTH FLORIDA CENTRAL FLORIDA SOUTH FLORIDA Jackson ...712 Jefferson ...284 Lafayette...46 Leon ...11,883 Liberty ...121 Madison...253 Nassau ...1,205 Okaloosa ...3,672 Putnam ...1,046 St. Johns...5,052 Santa Rosa ...3,012 Suwannee ...437 Taylor...307 Union ...170 Wakulla ...827 Walton...410 Washington ...316 Brevard...13,540 Citrus ...2,078 Hernando ...2,382 Hillsborough ...31,490 Indian River...2,919 Lake ...4,351 Levy ...439 Marion ...4,561 Orange...22,388 Osceola...2,662 Pasco ...7,738 Pinellas...28,754 Polk...8,504 Seminole ...12,991 Sumter ...513 Volusia ...9,692 TOTAL ...155,002 TOTAL...72,708 TOTAL ...223,033 Broward...68,102 Charlotte ...2,095 Collier...5,427 Desoto...268 Glades ...66 Hardee...266 Hendry ...465 Highlands ...1,131 Lee...10,164 Manatee ...4,815 Martin...4,275 Miami-Dade ...70,151 Monroe ...2,535 Okeechobee...474 Palm Beach ...41,612 St. Lucie ...4,374 Sarasota...6,813
FAMILIES:Families enrolled in 2001.COUNTY RANK:Six largest populated counties in Florida. University of Florida, Bureau of Economic and Business Research, 2001.
Of the 489,294 customers who have purchased a tuition plan, 38,551 now live out of state or their current address is unknown for reasons including the customer has moved but has not provided a forwarding address or the plan was purchased through the Florida Prepaid College Foundation and the beneficiary has not yet been named.
FAMILY RACE — ETHNIC ORIGIN
Florida Prepaid
Florida Prepaid Florida Last 5 Years First 8 Years Since Inception
White Families 73% 78% 76% 85% 81% Minority Families 27% 22% 24% 15% 19% Hispanic 15% 17% 13% 8% 10% African American 7% 15% 7% 4% 5% Asian 2% 2% — — — Other 3% 5% 4% 3% 4%
2001 FLORIDA PREPAID:Families enrolled in 2001.2001 FLORIDA:Total population of Florida. Hispanics may be of any race; therefore, the total of all racial/ethnic groups does not equal 100 percent. University of Florida, Bureau of Economic and Business Research, 2001.FLORIDA PREPAID LAST 5 YEARS:Families enrolled 1997-2001.FLORIDA PREPAID FIRST 8 YEARS:Families enrolled 1989-1996.FLORIDA PREPAID SINCE INCEPTION:All families enrolled since 1989, the first enrollment year. Florida Prepaid family race-ethnic origin is self-reported with approximately 75 percent of all customers responding.
COLLEGE ENROLLMENT
The number of Florida Prepaid students
in college has grown, increasing
13 percent this year to 43,038 students.
Of those students, 12,053 enrolled in
college for the first time.
Since the program began, 85,000 Florida
Prepaid students have gone to college.
More than 21,000 are known to have
graduated from a public university or
community college in Florida.*
*The program does not track students who may have graduated from a private Florida college, technical center or out-of-state college.
Most Florida Prepaid students go to a
public university or community college in
Florida. This year, 58 percent of all
Florida prepaid students were enrolled at
a Florida university and 32 percent were
enrolled at a Florida community college.
Approximately 4 percent went to a private
college in Florida and 4 percent to an
out-of-state college. For the first time, Florida
Prepaid students had the opportunity to
use their plan at an approved technical
center in Florida or for technical
educa-tion courses at a Florida community
college. Close to 1 percent, a total of
260 students, took advantage of this new
benefit.
Future Enrollment
Within the next five years, annual Florida
Prepaid college enrollment is projected to
surpass 62,000 students.
College Payments
More than $328.6 million in tuition,
dormitory and local fee plan payments
have been made since the program
started.
Florida’s public universities have benefited
the most, receiving 68 percent of all
Florida Prepaid payments. Since the
program started, more than $222 million
has been paid to public universities in
Florida. Florida’s community colleges
have received close to $62.8 million.
Florida University 25,047 Students TOTAL: 43,038 STUDENTS 58% 32% 4% 4% 1% 1%
Florida Community College 13,684 Students
Out-Of-State College 1,885 Students Florida Private College 1,634 Students
Florida Technical Center* 260 Students
Scholarship** 528 Students
* Includes 135 students enrolled at an approved technical center in Florida and 125 students enrolled in technical education courses at a Florida community college.
** Includes students who qualified for and received a scholarship refund. Scholarship refunds are paid to the account owner, not the college; therefore, the program does not track where these students are attending college.
PLAN USAGE — FALL 2001
Florida University $222 Million
Florida Community College $62.8 Million
Out-Of-State College $29.8 Million Florida Private College $13.7 Million
Florida Technical Center* $250,000 68% 19% 9% 4% ≤1% TOTAL $328.6 MILLION
*Payments to approved technical centers in Florida and for technical education courses offered by Florida’s community colleges were authorized for the first time in 2001.
TOTAL PAYMENTS
By College Type - Cumulative
2002 2003 2004 2005 2006
Projected Enrollment
Next Five Years
Students Fall Semester 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
TOTAL PAYMENTS
By Plan Type — Cumulative
Plan Type
Payments
Tuition
$288.8 million
Dormitory
$39.7 million
Local Fee
$55,000
TOTAL
$328.6 million
Total payments since the program started. Because most local fee plans since first introduced in 1999, have been purchased for children who have not yet started college, local fee plan payments are significantly less than tuition plan and dormitory plan payments.
Florida Colleges Of Choice
Florida Prepaid enrollment grew at most
all of Florida’s public universities and
community colleges this year.
Again this year, more Florida Prepaid
students were enrolled at the University
of Florida than at any other college. Close
to 17 percent of all Florida Prepaid
students attended the University of
Florida this year. Of all Florida Prepaid
students at a public university in Florida,
29 percent were enrolled at the
University of Florida.
Miami-Dade Community College
continues to have the highest Florida
Prepaid enrollment among Florida’s
community colleges. Of all Florida
Prepaid students at a public community
college in Florida, 11 percent were
enrolled at Miami-Dade Community
College.
Fall 2000 Fall 2001
Miami-Dade Community College 1,296 1,500
Valencia Community College 1,236 1,394
Broward Community College 1,117 1,241
Santa Fe Community College 937 1,064
Tallahassee Community College 922 1,024
Palm Beach Community College 896 991
St. Petersburg College 845 963
Hillsborough Community College 798 955
Florida Community College at Jacksonville 643 787
Brevard Community College 411 441
Seminole Community College 305 411
Daytona Beach Community College 335 373
Edison Community College 292 348
Indian River Community College 279 297
Pensacola Junior College 228 264
Manatee Community College 232 261
Polk Community College 223 245
Central Florida Community College 161 209
Pasco-Hernando Community College 132 174
St. Johns River Community College 188 150
Gulf Coast Community College 129 131
Okaloosa-Walton Community College 106 126
Lake-Sumter Community College 121 121
Lake City Community College 50 69
South Florida Community College 52 43
Chipola Junior College 43 39
Florida Keys Community College 28 34
North Florida Community College 33 29
TOTAL 12,038 13,684
Fall 2000 Fall 2001
University of Florida 6,753 7,248
Florida State University 4,573 4,946
University of Central Florida 3,803 4,449
University of South Florida 2,311 2,722
Florida International University 1,974 2,087
Florida Atlantic University 1,126 1,380
University of North Florida 1,036 1,134
University of West Florida 388 425
Florida A&M University 349 397
Florida Gulf Coast University 208 259
New College of Florida* ––– –––
TOTAL 22,521 25,047
Florida Prepaid Enrollment By Community College
Florida Prepaid Enrollment By University
* New College of Florida was recently designated a public university. New College was previously a campus of the University of South Florida; therefore, students enrolled at New College for Fall 2000 and Fall 2001 are included in the count for USF.
MARKETING
Marketing of the program centers around
the enrollment campaign from October
to January each year.
This year’s theme was
Will college be in
your child’s future?
The campaign
strategies included:
•
Direct mail targeting 100,000 Florida
parents statewide.
•
A new direct mail piece asking
African-American church and organization
leaders to share information about the
program with their members.
•
A direct mail package encouraging
daycare centers to distribute
informa-tion about the program to parents.
•
Television advertising in all major
markets and radio advertising in select
markets statewide.
•
Print ads in seven different
African-American newspapers in Florida.
•
Outdoor billboards in eight markets
plus moving billboards on buses in
Miami and Jacksonville.
•
Interior bus signage reaching lower to
middle income neighborhoods in
Miami.
•
Expanded promotion of the Florida
Prepaid Web site.
•
A comprehensive media relations
campaign, generating continuous news
coverage.
Information was also distributed through
Florida elementary and middle schools,
reaching a potential 2 million families,
and through Florida libraries.
Presentations were made to
parent-teacher organizations, businesses and
community groups. And the program
continues to partner with a growing
number of businesses statewide to
promote the advantages of saving for
college through payroll deduction.
PRICING
Ernst & Young, an independent actuary, calculates the plan prices each year. The
plan prices are based on current college costs and projected costs for future years.
The plan prices vary according to the plan type, the payment option and the age of
the child. Payments can be made in a lump sum, over five years or monthly until
the year the child is projected to start college. The five-year payment option and
the monthly payment option include a fixed financing rate of 6.8 percent.
Tuition Plan Pricing
This year, tuition costs were $59.13 per credit hour at all state universities. Tuition
costs at Florida community colleges vary, averaging $43.90 per credit hour in
2000-01. In setting the prices, it was assumed that university tuition will increase
6.8 percent and community college tuition will increase 6 percent annually.
Tuition Plan Type
Lump Sum
5 Years
Monthly
4-Year University Plan
$7,083
$150
$56
2+2 Plan
5,264
112
42
2-Year Community College Plan
1,779
38
14
Plan prices are for a newborn child. Prices are rounded up to the next dollar.
Local Fee Plan Pricing
Local fees vary by college, averaging $18.38 per credit hour at a state university
and $4.86 per credit hour at a community college in 2000-01. The plan prices
were based on a weighted average and a projected 6 percent university increase
and an 11 percent community college increase in local fees annually.
Local Fee Plan Type
Lump Sum
5 Years
Monthly
4-Year University Plan
$1,683
$36
$14
2+2 Plan
1,383
30
11
2-Year Community College Plan
557
––
––
Plan prices are for a newborn child. Prices are rounded up to the next dollar. The two-year community college plan can only be purchased in a lump sum.
Dormitory Plan Pricing
Dormitory costs also vary by college, averaging $2,792.02 in 2000-01. The plan
prices were based on a weighted average and a projected 6 percent inflation factor
for all future years.
Dormitory Plan Type
Lump Sum
5 Years
Monthly
1-Year Plan
$2,191
$47
$18
2-Year Plan
4,340
92
35
Plan prices for a newborn child. Prices are rounded up to the next dollar. The one-year and two-year dormitory plans are the most popular. The program also offers three-, four- and five-year dormitory plans.
Domestic Equity Investments: 12%
Fixed Income Investments: 88% 66% 4% 4%
4% 13%
9%
U.S. Treasury Agency Bonds Mortgage-Backed Bonds Corporate Bonds Large Cap Growth Stocks Large Cap Value Stocks S&P 500 Index Stocks
INVESTMENTS
The State of Florida guarantees to pay
the actual costs covered by the Florida
Prepaid College Program, when the
beneficiary of the plan — the child —
is ready for college. To achieve this
objective, customer payments are invested
according to a Comprehensive Investment
Plan approved by the Florida Prepaid
College Board and Florida’s Governor,
Comptroller and Treasurer.
The Comprehensive Investment Plan
describes the investment goals, strategy,
asset allocation and benchmarks for
monitoring investment performance.
The overarching investment goal is to
ensure that the program meets its
fore-casted liabilities or, in other words, that
the program can keep pace with increases
in tuition, local fee and dormitory costs
and satisfy its financial obligation to its
customers now and in the future.
The investment strategy is conservative by
most industry standards with target asset
allocations of 88 percent fixed income
and 12 percent equities. The benchmark
yield on investments is approximately
6 percent.
Since inception, the program has averaged
an 11 percent annualized return on its
investments and, as of fiscal year ending
June 30, 2001, had an actuarial reserve of
$410 million. The market value of
invested assets, including contract
receivables, exceeds $3.4 billion.
Fixed Income Portfolio
The fixed income portfolio is invested
using an enhanced immunization style of
management, in which assets are
struc-tured to increase in value in conjunction
with any increase in liabilities.
The benchmark allocations for the fixed
income fund are 66 percent U.S. Treasury
bonds, 13 percent mortgage-backed
securities and 9 percent corporate bonds.
Equity Portfolio
The Comprehensive Investment Plan
splits the 12 percent allocation of equity
assets among large capitalization growth,
large capitalization value and S&P 500
index stocks.
Investment Managers
The program contracts with several
nationally recognized firms to provide
investment management services.
All investment managers are selected
through a competitive bidding process,
and existing contracts are periodically
rebid.
THE FOUNDATION
The Florida Prepaid College Foundation
is a 501(c)(3) direct support organization
for the Florida Prepaid College Program.
Through the Foundation, businesses,
community groups and individuals can
make tax-deductible contributions to fund
prepaid college scholarships for
low-income children and other children who
may not have the opportunity to go to
college. Created in 1990, the Foundation
has awarded 14,479 prepaid college
scholarships statewide.
Project STARS
Project STARS — Scholarship Tuition For
At-Risk Students — is a Foundation
scholarship program for low-income
children who are at risk of dropping out
of school. Project STARS is funded by an
annual appropriation from the Florida
Legislature and matching funds from
private donors.
Project STARS is making a difference.
Today, 96 percent of all Project STARS
students are progressing academically, are
staying drug- and crime-free, and are
making plans to go to college.
Other Scholarships
The Foundation sponsors several other
scholarships including the School District
Scholarship, a program which encourages
middle school students to pursue a career
in education, and the Lawton Chiles
Scholarship which is awarded each year
to an at-risk middle school student in
honor of the late-Governor Lawton Chiles
and his lifelong commitment to Florida’s
children.
The Foundation also partners with the
community to provide scholarships for
children who because of special
circum-stances — the untimely death of a parent
or other unique family situations — may
not be able to afford college.
Balance Sheet
Year ended June 30, 2001
ASSETS AND OTHER DEBITS
Cash and cash equivalents $
Restricted assets:
Cash and cash equivalents 596,385
Investments 3,666,169,583
Investment trades receivable 7,829,890
Tuition and housing payments receivable 685,406,213
Accrued interest receivable 12,971,797
Equipment —
Amount available in expendable trust fund —
Amount to be provided for tuition and
housing benefits payable —
compensated absences —
Total assets and other debits $ 4,372,973,868
LIABILITIES
Liabilities:
Current liabilities (payable from restricted assets):
Accounts payable and accrued expenses $ 4,629,628
Due to beneficiaries —
Obligations under securities lending 924,489,524
Investment trades payable 35,988,441
Deferred revenue 685,406,213
Refunds payable 4,148,450
Long-term liabilities:
Tuition and housing benefits payable —
Compensated absences —
Total liabilities 1,654,662,256
Fund equity and other credits:
Investment in general fixed assets —
Fund balances:
Reserved for program expenditures 2,718,311,612
Unreserved —
Total fund equity and other credits 2,718,311,612 Total liabilities, fund equity and other credits $ 4,372,973,868
Fiduciary
Fund Type
Expendable
$ $ $ $ 1,422,647 $ 1,422,647 — — 596,385 10,185,876 10,782,261 — — 3,666,169,583 — 3,666,169,583 — — 7,829,890 — 7,829,890 — — 685,406,213 185 685,406,398 — — 12,971,797 — 12,971,797 90,925 — 90,925 — 90,925 — 2,718,311,420 2,718,311,420 — 2,718,311,420 — 279,471,309 279,471,309 — 279,471,309 — 127,811 127,811 — 127,811 $ 90,925 $ 2,997,910,540 $ 7,370,975,333 $ 11,608,708 $ 7,382,584,041 $ — $ — $ 4,629,628 $ — $ 4,629,628 — — — 10,186,061 10,186,061 — — 924,489,524 — 924,489,524 — — 35,988,441 — 35,988,441 — — 685,406,213 — 685,406,213 — — 4,148,450 — 4,148,450 — 2,997,782,729 2,997,782,729 — 2,997,782,729 — 127,811 127,811 — 127,811 — 2,997,910,540 4,652,572,796 10,186,061 4,662,758,857 90,925 — 90,925 — 90,925 — — 2,718,311,612 — 2,718,311,612 — — — 1,422,647 1,422,647 90,925 — 2,718,402,537 1,422,647 2,719,825,184 $ 90,925 $ 2,997,910,540 $ 7,370,975,333 $ 11,608,708 $ 7,382,584,041
Groups
General
Fixed Assets
General
Long-Term Debt
Primary
Government
Florida Prepaid College
Foundation, Inc.
(Memorandum Only)
(Memorandum Only)
Reporting
Statement Of Revenues, Expenditures And Changes In Fund Balances
Year Ended June 30, 2001
Revenues:
Prepaid tuition and housing $ 253,496,351 $ — $ 253,496,351
Investment income 217,356,812 518,864 217,875,676
Securities lending income 54,524,105 — 54,524,105
Application and other fees 3,147,060 77,268 3,224,328
Donations — 77,500 77,500
Total revenues 528,524,328 673,632 529,197,960
Expenditures:
Tuition and housing 64,553,215 — 64,553,215
Refunds 39,798,790 — 39,798,790
Administration 9,518,535 612,935 10,131,470
Securities lending 52,141,879 — 52,141,879
Total expenditures 166,012,419 612,935 166,625,354
Excess of revenues over expenditures 362,511,909 60,697 362,572,606
Fund balances, beginning of year 2,355,799,703 1,361,950 2,357,161,653
Fund balances, end of year $ 2,718,311,612 $ 1,422,647 $ 2,719,734,259
Fiduciary
Fund Type
Expendable
Trust
Governmental
Primary
Government
Component
Unit
Total
(Memorandum Only)
Florida Prepaid
College Foundation, Inc.
Reporting
Entity
Statement Of Cash Flows
Year Ended June 30, 2001
Cash flows from operating activities:
Excess of revenues over expenditures $ 60,697
Adjustments to reconcile excess of revenues over expenditures to net cash provided by operating activities:
Changes in operating assets and liabilities:
Accounts receivable (185)
Due to beneficiaries 2,432,102
Net cash provided by operating activities 2,492,614
Net increase in cash 2,492,614
Cash at beginning of year 9,115,909
Cash at end of year 11,608,523
Classified as: Current assets 1,422,647 Restricted assets 10,185,876 $ 11,608,523
Governmental
Component Unit
Florida Prepaid
College Foundation, Inc.
ACCOUNTING POLICIES
Description of Program
The Florida Prepaid College Program (the “Program”), formerly the Florida Prepaid Postsecondary Education Expense Program, is adminis-tered by the Florida Prepaid College Board (the “Board”). The Program was created in 1987 to provide a medium through which the cost of State postsecondary education may be paid in advance of enrollment at a rate lower than the projected corresponding costs at the time of enroll-ment. The Program is authorized by Chapter 240.551 of the Florida Statutes and governed by Board Rules. The State of Florida guarantees to meet the obligations of the Program to qualified beneficiaries if funds in the Program are insufficient. In the event that the State determines the Program to be financially infeasible, the State may discontinue the provi-sions of the Program. If discontinued, any qualified beneficiary who has been accepted by and is enrolled or is within 5 years of enrollment at a state college, university or postsecondary institution, (or other institution as specified in the contract), shall be entitled to exercise the complete benefits. All other contract holders shall receive a refund with an addi-tional amount for interest at prevailing rates.
Effective July 1, 2000, the Florida College Savings Plan (the “Savings Plan”) was created as a supplement to the existing Florida Prepaid College Program. The Savings Plan is authorized by Chapter 240.553 of the Florida Statues and governed by Board Rules. The Savings Plan provides a vehicle whereby participants can save for supplemental post secondary education costs not covered by the traditional plan. Such costs include books, off-campus housing, food and graduate studies.
Participant contributions are collected and invested in accordance with participant agreements. Participant agreements clearly state that the participant contributions are solely the debt of the Savings Plan and not the debt of the State. Participants retain ownership of all amounts on deposit with the Savings Plan, up to the dates of distribution on behalf of designated beneficiaries. Participant contributions and the earnings derived from such contributions are held in trust. During the year ended June 30, 2001, no contributions were made to the Savings Plan. If the State determines that the Savings Plan is financially infeasible, it has the authority to discontinue the Savings Plan. Otherwise, the Savings Plan will continue in existence until it is terminated by law. Upon termi-nation of the Savings Plan, all deposits shall be returned to the participants and any unclaimed assets in the Savings Plan will revert to the State in accordance with general law regarding unclaimed property.
Reporting Entity
The Board is a body corporate assigned to and administratively housed within the State of Florida, State Board of Administration. In evaluating the Program as a reporting entity, management has addressed all poten-tial component units (traditionally separate reporting entities) for which the Program may or may not be financially accountable and, as such, be includable in the Program’s financial statements. In accordance with governmental accounting standards, the Program (the primary govern-ment) is financially accountable if it appoints a majority of the
organization’s governing board and (1) it is able to impose its will on the organization or (2) there is a potential for the organization to provide
specific financial benefit or to impose specific financial burden on the Program. Additionally, the primary government is required to consider other organizations for which the nature and significance of their rela-tionship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.
The Program has one discretely presented component unit — The Florida Prepaid College Foundation, Inc. (the “Foundation”). The Foundation was created in 1989 to provide prepaid tuition scholarships to economically disadvantaged at-risk, students. The Foundation is a direct-support organization of the Program and is authorized by Section 240.551(5)(j) of the Florida Statutes. The Program appoints a majority of the Foundation’s board and is able to impose its will, as defined by Governmental Accounting Standards Board (GASB) Statement No. 14, on the Foundation. Separate financial statements are available from the Foundation upon request.
The financial statements include the funds and accounts of the Program and its component unit. The financial statements do not include the funds and accounts of the State of Florida, and therefore, are not intended to present the financial position and the results of operations of the State of Florida in conformity with generally accepted accounting principles.
Fund Accounting
An expendable trust fund is used to account for the combined net assets held by the Program and the Savings Plan on behalf of the participants. The general fixed assets account group used to account for the combined fixed assets owned by the Program and the Savings Plan. The general term debt account group is used to account for outstanding long-term tuition and housing benefits payable and other long-long-term obligations of the Program and the Savings Plan.
Foundation Accounting
The accounts of the Foundation are maintained in accordance with the principles of not-for-profit accounting.
General Fixed Assets Account Group
The general fixed assets account group is used to maintain control and cost information for all fixed assets of the Program and the Savings Plan. General fixed assets are recorded as expenditures in the expendable trust fund at the time the goods are received and a liability is incurred. These assets are capitalized at cost in the general fixed asset account group. Donated assets are recorded at fair market value at the time received. No depreciation is provided on general fixed assets.
Equipment
The Foundation’s equipment is recorded at cost and depreciated on the declining balance method over five years, the estimated useful lives of the assets.
General Long-Term Debt Account Group
The general term debt account group is used to record the long-term tuition and housing benefits payable and other long-long-term obligations of the Program and the Savings Plan not otherwise recorded
in the expendable trust fund.
Budget
The budgetary basis of accounting used by the Program and the Savings Plan as required by State law differs materially from the basis used to report revenues and expenditures in accordance with generally accepted accounting principles. Budgetary basis revenues are essentially on the cash basis. Budgetary basis expenditures include disbursements plus current year payables and encumbrances which are certified forward into the next fiscal year and exclude prior year certified forwards. State law requires prior year payables and encumbrances not certified forward to be paid from the current year budget. All revenues and other financing uses are not formally budgeted. These appear on the income statement but are not part of the operating budget. The total appropriations for those expenditure items which are budgeted was $10,540,447 and total actual expenditures for these items were $8,341,837 for the year ended June 30, 2001.
Basis of Accounting
These financial statements have been prepared in accordance with gener-ally accepted accounting principles as prescribed by the Governmental Accounting Standards Board. Basis of accounting refers to when revenues and expenditures/expenses are recognized in the accounts and reported in the financial statements. The accounting and reporting treatment applied to a fund is determined by its measurement focus.
The modified accrual basis of accounting is utilized by the Program and the Savings Plan. Accordingly, revenues are recognized when they are susceptible to accrual, i.e. both measurable and available.
The Foundation receives scholarship funds from donor organizations with instructions to purchase contracts from the Program for specified third-party beneficiaries. The Foundation has no discretion in deter-mining the parties to be benefited and it must deliver the contracts to the specified beneficiaries. Receipt of those scholarship funds is not a contri-bution to the Foundation, nor is the delivery of the contracts an expense of the Foundation. The unexpended funds from the donors are classified as due to beneficiaries.
Investments
Investments are recorded at fair value. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Quoted market prices are used to determine fair value.
Revenue Recognition
Prepaid tuition and housing payments — The Program has three payment plans:
1) A lump-sum plan;
2) A five-year installment plan; and 3) A monthly payment plan.
The lump-sum plan is a one-time payment when the child is enrolled in the Program. The five-year installment plan provides for 55 equal monthly payments. The monthly payment plan provides for equal
payments each month until the child enters college. Revenues from the three payment plans are recognized as received.
Income Taxes
The Foundation is a non-profit organization, exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes is shown in the finan-cial statements.
Total Columns on Financial Statements
The columns entitled “Total (Memorandum Only)” included in the finan-cial statements section of this report are presented only to facilitate financial analysis. These total columns are not comparable to consoli-dated financial information as the basic reporting entity is by fund types which utilize differing bases of accounting, interfund transactions that have not been eliminated, and the caption “amounts to be provided” which is not an asset in the usual sense. The columns do not present information that reflects financial position, results of operations or cash flow in accordance with generally accepted accounting principles.
New Accounting Pronouncements
Statement No. 34 of the Governmental Accounting Standards Board (GASB), Basic Financial Statements and Management’s Discussion and Analysis-for State and Local Governments establishes new financial reporting standards for state and local governments in the United States. When implemented, it will create new information and will restructure much of the information that governments have presented in the past. The statement was developed to make the annual reports of govern-mental entities more comprehensive and easier to understand and use. Statement No. 34 establishes that the basic financial statements and required supplementary information (RSI) for general-purpose govern-ments should consist of the following:
1) Management’s discussion and analysis (MD&A). MD&A should intro-duce the basic financial statements and provide an analytical overview of the government’s financial activities.
2) Basic financial statements. The basic financial statements should include:
Government-wide financial statements
Government-wide financial statements consist of a statement of net assets and a statement of activities. Prepared using the economic resources measurement focus and the accrual basis of accounting, these statements should report all of the assets, liabilities, revenues, expenses, and gains and losses of the government. Each statement should distinguish between the governmental and business-type activities of the primary government and between the total primary government and its discretely presented component units by reporting each in separate columns. Fiduciary activities, whose resources are not available to finance the government’s programs, should be excluded from the government-wide statements.
Fund financial statements
Fund financial statements consist of a series of statements that focus on information about the government’s major governmental and enterprise
funds, including its blended component units. Fund financial statements also should report information about a government’s fiduciary funds and component units that are fiduciary in nature.
3) Notes to the financial statements provide information that is essential to a user’s understanding of the basic financial statements.
4) Required supplementary information (RSI). In addition to MD&A, this Statement requires budgetary comparison schedules to be presented as RSI along with other types of data required by previous GASB pronouncements.
The requirements of this Statement are effective based on a government’s total annual revenues in the first fiscal year ending after June 15, 1999. Governments earning total annual revenues of $100 million or more, during this fiscal year, are required to apply this Statement to periods beginning after June 15, 2001. Accordingly, the Program will implement the provisions of this statement during the 2002 fiscal year. Management has not yet quantified the impact of adopting Statement No. 34.
CASH, INVESTMENTS
AND SECURITIES LENDING
Cash and cash equivalents include certain investments in highly liquid instruments with original maturities of three months or less. The Program routinely invests its surplus operating funds in money market funds. Amounts reserved for program expenditures are excluded from cash and cash equivalents. All cash demand accounts are entirely insured by federal depository insurance or by the multiple financial institution collateral pool pursuant to the Public Depository Security Act of the State of Florida.
Section 240.551(5)(d)-(f), Florida Statutes, authorizes the Program to invest in the authorized investment vehicles defined in the
Comprehensive Investment Plan (the Plan). The Plan, established by the Board and approved by the State Board of Administration, specifies the authorized investment vehicles, which include certificates of deposit in banks, U.S. Treasury obligations and other U.S. Government Agency obligations, certain grades of commercial paper, bankers acceptances, annuities, certain repurchase agreements, corporate and equity securities as well as money market and mutual funds. The Plan also specifies the portfolio allocation which is intended to meet the Board’s specified goals of safety, liquidity and yield. At June 30, 2001, the cost and fair value of investments held in accordance with the Plan was as follows:
Cost
Fair Value
Short term investment funds $70,836,269 $70,836.269 Fixed income securities 2,208,490,963 2,438,050,350 Equity securities 224,023,377 232,793,440 Securities lending cash collateral 924,489,524 924,489,524 $3,427,840,133 $3,666,169,583
Under the provisions of the Plan, the Program lends securities to broker-dealers and other entities (borrowers) for collateral that will be returned for the same securities in the future. The Program’s investment trustee manages the securities lending program and receives cash, certain governmental securities or irrevocable bank letters of credit as collateral.
The collateral securities cannot be pledged or sold by the Program unless the borrower defaults. Collateral cash, securities and letters of credit are initially pledged at 102 percent of the market value of the securities lent for U.S. securities, and additional collateral has to be provided by the next business day if its value falls to less than 100.5 percent of the market value of the securities lent.
Investments at June 30, 2001 are recorded at fair value and are catego-rized in the following table to give an indication of the level of risk assumed. Securities on loan at June 30, 2001 are classified in the following schedule of credit risk according to the category for the collat-eral received on the securities lent. At June 30, 2001, the Program has no credit risk exposure to borrowers because the amounts the Program owes the borrowers does not exceed the amounts the borrowers owe the system. Category 1 includes investments that are insured or registered for which the securities are held by the Program or its agent in the Program’s name. Category 2 includes uninsured and unregistered investments for which the securities are held by the broker’s or dealer’s trust department or agent in the Program’s name. Category 3 includes uninsured and unregistered investments for which the securities are held by the broker or dealer, or by its trust department or agency, but not in the Program’s name.
Changes in fair value are reported as increases and decreases to invest-ment income.
Risk
Fair
Category
Value
U.S.Treasury Obligations:
Not on securities loan 1 $485,637,360
On securities loan for securities collateral 1 281,253,259 On securities loan for cash collateral 1 801,489,724 1,568,380,343 Temporary Investments:
Not on securities loan 1 317,791
Not on securities loan 67,084,969
67,402,760 U.S.Agency Obligations:
Not on securities loan 2 68,489
Not on securities loan 1 276,128,115
On securities loan for securities collateral 1 10,044,872 On securities loan for cash collateral 1 28,554,395 314,795,871 Corporate Bonds:
Not on securities loan 2 79,529
Not on securities loan 1 481,139,360
On securities loan for securities collateral 1 4,833,166 On securities loan for cash collateral 1 69,208,327 555,260,382 Common Stock:
Not on securities loan 1 230,039,088
On securities loan for cash collateral 1 2,754,351 232,793,439 Florida State Board of Administration
Repurchase Agreements 2 3,047,264
Securities Lending Cash Collateral 924,489,524
TUITION AND HOUSING
BENEFITS PAYABLE
The Program’s tuition and housing benefits payable represent the actuari-ally determined present value of future program obligations. The following is a summary of changes in long-term tuition and housing benefits payable:
Net present value of tuition and housing
benefits payable at June 30, 2000 $2,529,308,351 Tuition and housing benefits paid for the year (64,553,215) Increase in tuition and housing benefits payable 533,027,593 Net present value of tuition and housing
benefits payable at June 30, 2001 $2,997,782,729
Presented below is the total tuition benefits obligation of the Program. The standard measurement is the actuarial present value (APV) of the future tuition obligation. The valuation method reflects the present value of estimated tuition benefits that will be paid in future years and is adjusted for the effects of projected tuition and housing increases and termination of contracts.
The net assets available represent assets in trust at market value and the future discounted contract payments adjusted for estimated cancellations.
APV of future benefits payable 2,997,782,729
Net assets available 3,403,717,633
Net assets as a percentage of tuition
and housing benefits obligation 114%
The following assumptions were used in the actuarial evaluations:
•Rate of return — 5.91% per annum.
•Projected tuition increase — 6% compounded annually for community colleges and 6.8% compounded annually for universities.
•Projected dormitory fee increase — 6% compounded annually.
•Projected local fee increase — 6% compounded annually for universities and 11% compounded annually for community colleges.
AGENCY TRANSACTIONS
Due to Beneficiaries
The Foundation receives scholarship funds from donors and purchases contracts for the donor’s designated beneficiaries. The unexpended funds from these donors are classified as due to beneficiaries. The receipts and disbursements of the funds received are as follows:
Balance, June 30, 2000 $ 7,753,959
Add: Donations 13,399,507 Less: Payments on behalf of donors (10,967,405)
Balance, June 30, 2001 $ 10,186,061
RETIREMENT
All permanent full-time employees of the Program participate in the Florida Retirement System (FRS), a multiple employer cost sharing defined benefit retirement system, administered by the State of Florida (State). The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The State issues a publicly available report that includes financial statements and required supplementary information for FRS. That report may be obtained by writing to Florida Retirement System, State of Florida, Tallahassee, Florida 32399-1590.
The FRS provides vesting after ten years of creditable service. Normal retirement age is attained at the earlier of thirty years of creditable service regardless of age or retirement at age sixty-two with at least ten years of creditable service. Early retirement may be taken anytime; however, there is a five percent benefit reduction for each year prior to normal retire-ment age. Members are also eligible for in-line-of-duty or regular disability benefits if permanently disabled or unable to work. Benefits are computed on the basis of age, average final compensation and service credit.
The contribution requirements of the Program are established by Florida Statutes, Chapter 21 and may be amended by FRS. The plan is non-contributory for employees with all contributions being the obligation of the Program. The Program’s contributions to FRS for the year ended June 30, 2001 was $52,406, equal to the required contribution.
RELATED-PARTY TRANSACTIONS
The Foundation purchases prepaid tuition contracts from the Program on behalf of selected scholarship recipients. Prepaid tuition contracts at a cost of approximately $10,967,000 were purchased during the year ended June 30, 2001.
