University of Puerto Rico Fiscal Plan April 30, 2017 - San Juan, Puerto Rico 1

Disclaimer The University of Puerto Rico (the “University”), and each of their respective officers, directors, employees, agents, attorneys, advisors, members, partners or affiliates make no representation or warranty, express or implied, to any third party with respect to the information contained herein and all Parties expressly disclaim any such representations or warranties. The University has had to rely upon preliminary information and unaudited financials for 2016, in addition to the inherent complexities that are part of a university in transition.

The Parties do not owe or accept any duty or responsibility to any reader or recipient of this presentation, whether in contract or tort, and shall not be liable for or in respect of any loss, damage (including without limitation consequential damages or lost profits) or expense of whatsoever nature of such third party that may be caused by, or alleged to be caused by, the use of this presentation or that is otherwise consequent upon the gaining of access to this document by such third party. This document does not constitute an audit conducted in accordance with generally accepted auditing standards, an examination of internal controls or other attestation or review services in accordance with standards established by the American Institute of Certified Public Accountants or any other organization. Accordingly, the Parties do not express an opinion or any other form of assurance on the financial statements or any financial or other information or the internal controls of the University and the information contained herein. Any statements and assumptions contained in this document, whether forward-looking or historical, are not guarantees of future performance and involve certain risks, uncertainties, estimates and other assumptions made in this document. The economic and financial condition of the University and its instrumentalities is affected by various financial, social, economic, environmental and political factors. These factors can be very complex, may vary from one fiscal year to the next and are frequently the result of actions taken or not taken, not only by the University and its instrumentalities, but also by entities such as the government of the United States. Because of the uncertainty and unpredictability of these factors, their impact cannot be included in the assumptions contained in this document. Future events and actual results may differ materially from any estimates, projections, or statements contained herein. Nothing in this document should be considered as an express or implied commitment to do or take, or to refrain from taking, any action by the University, or any government instrumentality in the Government or an admission of any fact or future event. Nothing in this document shall be considered a solicitation, recommendation or advice to any person to participate, pursue or support a course of action or transaction, to purchase or sell any security, or to make any investment decision.

By receiving this document, the recipient shall be deemed to have acknowledged and agreed to the terms of these limitations.

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Table of Contents

Introduction Cash Flows Measures Institutional Profile

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I. Introduction 4

Guiding Principles of the UPR Fiscal Plan 1. Seeks to meet the fiduciary responsibility of the University with Puerto Rico while maintaining institutional integrity and financial stability. 2. Protects the necessary human, financial, technical, and capital resources needed to support the sustained achievement of the UPR mission.

3. Centers on the strengthening of the diversity and uniqueness that characterizes the UPR System for the successful attainment of the UPR 2017-2022 Strategic Plan. 4. Recognizes the complexities of the external environment aiming to position itself as a key contributor to the development of local economies. 5. Aims to champion social, cultural, and economic growth in alignment with the needs and priorities of the private and public sectors while strengthening the academic experience.

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6. Commits to its fiscal responsibility with specific revenues and expenditures measures to support the achievement of its strategic sustainable management goal. 7. Nurtures the innovation and transformation of academic endeavors, research and the creation of knowledge, as well as its technological structures. 8. Reinforces institutional capacities without affecting access, social responsibility, quality of services and professional and vocational success of its constituents. 9. Prioritizes administrative and academic transformations that are guided by efficiency and effectiveness criteria. 10. Allows for the development of capacity and creativity among teaching and non-teaching personnel to implement the necessary changes.

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OUR Commitment to Puerto Rico UPR Strategic Plan 2017-2022 Educational Environment To enhance and differentiate academic programs according to higher learning trends

Research and Creative Work To increase sources of external funding and to secure patents

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Service to Diverse Communities To promote growth in local economies and to value cultural and artistic expressions

Sustainability To attain operational efficiencies and to secure fiscal stability

STUDENT SUCCESS

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UPR Overview Government of Puerto Rico appropriations are the main source of the University revenues. Additional revenues are derived from: • Tuition and fees • Federal grants • Patient services • Interest income • Other sources The University is in good accreditation standing with the Middle States Commission on Higher Education, the regional accreditation entity of the eleven units that comprise the University of Puerto Rico system. The University is exempt from the payment of taxes on its revenues and properties. UNIVERSITY OF PUERTO RICO

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Revenue Sources The University’s main sources of revenue from the Government of Puerto Rico for the current fiscal year ending on June 30, 2016-17 are:  UPR Appropriation Formula from Act No. 2, 1966

$ 833.9M

 Additional Appropriations for Essential Services provided by the UPR to the Government of Puerto Rico through Medical School, Puerto Rico Seismic Network, Technology Assistance Program and other programs for Student Financial Assistance

$ 38.5M

 Revenues from the Gambling Law, Act No. 36, 2005 (slot machines) for operating expenses and debt service

$ 62.0M

Total Appropriations from the Government of Puerto Rico

$ 934.4M

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Trends in Puerto Rico Population 2010 to 2015  The population of Puerto Rico decreased 6.6% between 2010 and 2015.  The main reasons for the population decline are the massive emigration and low population growth. 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25%

 There was a decrease in population in the age groups:  Under 20 years old of 175,139 or 17.3%.  Between 20-24 years old of 5.10%. 19.8% 12.2%

-5.1% -15.8% -21.3% Under 5 to 9 5 years years

-3.0% -7.3%

-14.3% 15 to 19 years

-9.0%

-9.3%

35 to 39 years

40 to 44 years

45 to 49 years

14.2%

70 to 74 years

75 to 79 years

0.0% -5.0%

-15.7%

-18.6% 10 to 14 years

-7.9%

15.0%

16.0%

20 to 24 years

25 to 29 years

30 to 34 years

50 to 54 years

55 to 59 years

60 to 64 years

65 to 69 years

80 to 84 years

85 years and over

Source: US Census Bureau, Population Estimates 2010-2015 UNIVERSITY OF PUERTO RICO

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Student Market Projection 2015-2025

The Puerto Rico Planning Board projected a decrease in Puerto Rico’s population of:

 8.2%

of the total population from 2015 to 2025.

 22.5%

in the population between 15 to19 years of old for 2025.

Age Population Population Percent Difference Group 2015 2025 change

15-19

246,299

190,978

(55,321)

20-24

262,806

270,652

7,846

25-29

211,907

167,682

(44,225)

-22.5% 3.0% -20.9%

Source: Puerto Rico Planning Board, Population Projections UNIVERSITY OF PUERTO RICO

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II. Cash Flows Measures

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Summary of Cash Flows Measures The UPR Fiscal Plan considers a reduction in the annual appropriation from the Government of Puerto Rico of $241 million by fiscal year ending June 30, 2021, as indicated by the Governor of Puerto Rico on his letter to the Financial Oversight and Management Board on March 20, 2017. Fiscal Years Ending June 30, 2018

2019

2020

2021

2022

2023

2024

2025

2026

Expense Reduction Measures $ 91.50 $ 125.67 $ 149.20 $ 166.04 $ 167.46 $ 166.04 $ 164.61 $ 163.18 $ 162.32 Revenue Measures

$ 57.50 $ 54.33 $ 60.80 $ 74.96 $ 73.54 $ 74.96 $ 76.39 $ 77.82 $ 78.68

Total Impact of Measures $ 149.00 $ 180.00 $ 210.00 $ 241.00 $ 241.00 $ 241.00 $ 241.00 $ 241.00 $ 241.00

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Expense Reduction Measures

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Expense Reduction Measures (Cash Outflows) (changes in $ millions) Expenses Reduction Measures (Cash Outflows) Reduction to Central Administration and Other Systemic Services Reorganization of Administrative Structures and Academic Support Services Procurement and General Expense Reductions Adjustments to Employees Medical Insurance, Christmas Bonus Reduction on Institutional Capital Improvements Reserve Fund Debt Service Payment Reduction Total Expenses Reductions Measures (Cash Outflows)

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FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

FY 2024

FY 2025

FY 2026

$ 9.00

$ 10.00

$ 18.00

$ 20.00

$ 20.00

$ 20.00

$ 20.00

$ 20.00

$ 20.00

5.00

16.00

25.00

25.00

30.00

30.00

30.00

30.00

30.00

17.50

24.67

26.20

36.04

32.46

31.04

29.61

28.18

27.32

25.00

25.00

30.00

35.00

35.00

35.00

35.00

35.00

35.00

19.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

34.00 16.00

$ 91.50 $ 125.67 $ 149.20 $ 166.04 $ 167.46 $ 166.04 $ 164.61 $ 163.18 $ 162.32

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Assumptions of Expense Reduction Measures 1. Reduction in Central Administration and Other Systemic Service Costs The UPR is evaluating the budget assigned to every cost center with the objective of reducing the expenses to a sustainable level to all units. The analysis will include:  Reduction in the operating budget of the Central Administration.  Optimization the use of institutional funds at all levels of the UPR.

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Assumptions of Expense Reduction Measures 2. Cost Optimization Plan – Reduction in operating and general expenses A detailed cost reduction plan optimizes the use of institutional funds. The following is a brief summary of cost reduction initiatives:       

Energy savings Reduction in supplies expense Reduction in lease equipment Reduction in professional service contracts Reduction in travel expense Renegotiation of service contracts Renegotiation of medical insurance plan

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 Evaluation of property and casualty insurance coverage and policies  Reduction of property lease

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Assumptions of Expense Reduction Measures 3. Payroll and Related Expenses  Freeze payroll increases  Freeze and elimination of vacant positions  Reduce temporary personnel  Reduce “trust” personnel  Eliminate special bonus to administrative employees  Reduce the Christmas Bonus  Reorganize of administrative and academic support services

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4. Capital Improvement Program  Postpone the investment in new construction facilities in various campuses.

5. Medical Insurance Plan  Maintain the insurance medical plan contribution to cover direct family members.  Evaluate alternatives to reduce the continuous increase in healthcare spending.

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Reorganization of Administrative and Academic Support Services Merging phases throughout the UPR System into Major “HUBS”. Administrative

PHASE I

PHASE II

Structure

RÍO PIEDRAS CAMPUS HUB

CAYEY CAMPUS HUB

* Human Resources

* Finance

• Bayamón • Carolina

• Humacao • Ponce

* Budget * General Services

MAYAGÜEZ CAMPUS HUB • Aguadilla • Utuado • Arecibo

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Revenue Measures

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Revenue Measures (Cash Inflows) – Expected Changes (changes in $ millions) Revenue Measures (Cash Inflows) Tuition Increase, Undergraduate Student Enrollment (with Pell Grant) Tuition Increase, Undergraduate Student Enrollment (without Pell Grant) Tuition Increase, Graduate Student Reduction in Special Tuition Exemptions Executive Order No. 2017-021 Department of Education (training to teachers and tutoring) Municipalities Technical Agreements PR Science & Technology Trust, patent Virtual University Other Revenues Initiatives (i.e. external funds, gambling law) Total Revenue (Cash Inflows) Measures

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FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 $ 6.74

$ 6.74

$ 6.74

$ 6.74

$ 6.74

$ 6.74

$ 6.74

$ 6.74

$ 6.74

25.59

14.74

9.02

7.60

6.17

7.60

9.02

10.45

11.31

3.67 1.50 5.00

2.86 3.00 10.00

2.04 3.00 10.00

1.63 3.00 15.00

1.63 3.00 15.00

1.63 3.00 15.00

1.63 3.00 15.00

1.63 3.00 15.00

1.63 3.00 15.00

10.00

10.00

10.00

15.00

15.00

15.00

15.00

15.00

15.00

-

1.00

4.00 3.00 2.00

6.00 4.00 2.00

6.00 4.00 2.00

6.00 4.00 2.00

6.00 4.00 2.00

6.00 4.00 2.00

6.00 4.00 2.00

5.00

6.00

11.00

14.00

14.00

14.00

14.00

14.00

14.00

$ 57.50 $ 54.33 $ 60.80 $ 74.96 $ 73.54 $ 74.96 $ 76.39 $ 77.82 $ 78.68

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Assumptions for Revenue Measures 1. Tuition Increase Adjustments to the student expected family contribution (EFC) will be implemented as a means based tuition policy.  Increase in the undergraduate credit cost to $120 with UPR subsidy up to 100% for students with financial disadvantage as reported in the Application for Federal Student Aid.  Increase in tuition costs for graduate, professional and international students (specific credit costs under evaluation). 2. Special Tuition Exemptions  Evaluate the special tuition exemption policy.

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3. Executive Order 2017-021 Develop Government and UPR Agreements and Contracts through the UPR Interagency Project.  On February 15, 2017, the Governor of Puerto Rico, Hon. Ricardo Roselló Nevarez established a government public policy to create interagency agreements with the University of Puerto Rico.  The Executive Order mandates governmental agencies to grant priority to the University of Puerto Rico when a training and development program is contracted for employees in the public sector. 4. Puerto Rico Science and Technology Patents  Develop scientific research projects by the Río Piedras, Mayagüez and Medical Sciences Campuses to obtain patent rights granted by the Federal Government and increase royalty revenues.

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Means Based Tuition Model for Undergraduate Students Expected Family Contribution or % of Total Proposed Subsidy Net Cost per Estimated Total Number of % of Estimated New EFC (number that determines Undergraduate Cost per per Credit after Amount in Students Subsidy Gross Income students eligibility for federal aid) Students Credit Credit Subsidy Subsidy

0 - 499

28,177

50% 100%

500 - 999

2,043

4%

1000 - 1499

2,001

1500 - 1999

Actual Income

$ 44,180,969 $ 44,180,969

Net Increase1

$ 120

$ 64

$ 56 $ 50,492,536

90%

$ 120

$ 58

$ 62 $ 3,295,443

$ 3,570,063

$ 3,203,903

$ 366,160

4%

80%

$ 120

$ 51

$ 69 $ 2,868,660

$ 3,854,762

$ 3,137,597

$ 717,165

1,673

3%

70%

$ 120

$ 45

$ 75 $ 2,098,450

$ 3,522,399

$ 2,623,063

$ 899,336

2000 - 2499

1,527

3%

60%

$ 120

$ 38

$ 82 $ 1,642,265

$ 3,489,814

$ 2,394,970 $ 1,094,844

2500 - 2999

1,160

2%

50%

$ 120

$ 32

$ 88 $ 1,039,677

$ 2,859,112

$ 1,819,435 $ 1,039,677

3000 - 3499

900

2%

30%

$ 120

$ 19

$ 101

$ 483,768

$ 2,539,782

$ 1,410,990 $ 1,128,792

3500 - 3850

523

1%

20%

$ 120

$ 13

$ 107

$ 187,324

$ 1,568,836

≥ 3851 Undergraduate Student Enrollment (w/o. Pell Grant) Total Undergraduate Students

1,196

2%

10%

$ 120

$6

$ 114

$ 214,301

$ 3,803,839

16,800

30%

0%

$ 120

-

$ 120

-

56,000

100%

$ 819,541

-

$ 749,295

$ 1,875,132 $ 1,928,707

$ 56,448,000 $ 26,342,400 $ 30,105,600

$ 62,322,424 $ 125,837,576 $ 87,808,000 $ 38,029,576 Allowance for Tuition Exemptions $ (18,875,636) $ (13,171,200) $ (5,704,436) Net Estimated Income from Tuition $ 106,961,939 $ 74,636,800 $ 32,325,139

1. Net Increase does not include inflation adjustment UNIVERSITY OF PUERTO RICO

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Assumptions for Revenue Measures: Enrollment Projection Short-Term Strategy

Long-Term Strategy

UPR Promotion & Recruitment Plan

Recruitment and Enrollment Management Plan

Enrollment Goal approximately 56,000 students.

62,000 62,000

59,000 57,800

56,000

55,400

53,000

54,700

54,200

54,700

55,200

55,700

56,000

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

FY 2024

FY 2025

FY 2026

Total Undergraduate Students (with Pell Grant)

39,200

39,200

39,200

39,200

39,200

39,200

39,200

39,200

39,200

Total Undergraduate Students (without Pell Grant)

16,800

13,000

11,000

10,500

10,000

10,500

11,000

11,500

11,800

6,000

5,600

5,200

5,000

5,000

5,000

5,000

5,000

5,000

62,000

57,800

55,400

54,700

54,200

54,700

55,200

55,700

56,000

Total Graduate Students

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Assumptions for Revenue Measures 5. Virtual University  Development of online academic offering to expand local services and enhance outreach to prospective international students. 6. New Service Contracts with the Department of Education  Establishment of collaborative agreements with the Puerto Rico Department of Education (PRDE) to provide training and mentoring to the teachers of the PRDE. 7. New training and development contracts with local municipalities of Puerto Rico.  Establishment of alliances with local municipalities to provide educational and training services.

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8.

Other Initiatives The University of Puerto Rico is seeking other revenue initiatives in order to generate more resources to the entity. Among these initiatives are:  UPR Foundation  External funding by other federal agencies and private foundations  Medical Cannabis Project  License Plates  Vehicle Registration Sticker (Marbete)  “Ley de Apoyo Financiero UPR”  Course Repetition Policy

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III. Institutional Profile 25

Organic Law Founded in 1903 The University of Puerto Rico (the University) is a state supported university system created by Law No. 1 of January 20, 1966, “Law of the University of Puerto Rico” (“Act No. 1”), as amended.

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Mission To serve the people of Puerto Rico and contribute to the development and enjoyment of the fundamental, ethical and esthetic values of Puerto Rican culture, and committed to the ideals of a democratic society. To advance its mission, the University strives to provide high quality education and create new knowledge in the Arts, Sciences and Technology.

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Governing Board The University is a public corporation of the Commonwealth of Puerto Rico governed by a fourteen-member Governing Board composed of: Eight members appointed by the Governor of Puerto Rico and confirmed by the Senate of Puerto Rico

•

Two tenured professors

Two full-time students

The President of the University, appointed by the Board of Governors, is the Chief Executive Officer (CEO) of the Institution.

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•

The Secretary of the Department of Education of Puerto Rico becomes exofficio member

One ex-officio member of the Fiscal Agency and Financial Advisory Authority

The Chancellors, appointed by the Board of Governors following the recommendation of the President of the University, under the President’s oversight.

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Organization and Governance Governing Board

President

Río Piedras Campus

Mayagüez University Campus

Medical Science Campus

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UPR Aguadilla

UPR Arecibo

UPR Bayamón

University Board

UPR Carolina

UPR Cayey

UPR Humacao

UPR Ponce

UPR Utuado

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Institutional Units: Location Founded in 1903, UPR is the only state supported university system, comprised of 11 campuses strategically located throughout the Island of Puerto Rico, encompassing three Carnegie Classifications.

UPR at Aguadilla Mayagüez University Campus

UPR at Arecibo UPR at Bayamón UPR at Utuado

UPR at Ponce

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UPR at Carolina Río Piedras Campus Medical Science Campus

UPR at Humacao UPR at Cayey

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Institutional Accreditation and Licensing Compliance

Since 1946, the UPR maintains institutional accreditation by the Middle States Commission on Higher Education (MSCHE) as its leading credential to validate and strengthen the quality and integrity of its endeavors in the framework of internationally recognized standards.

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MSCHE accreditation is fundamental for the financial stability of the University. Without this accreditation the University would not be authorized to manage Title IV funds. This is one of the basic requirements established by the US Department of Education.

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Faculty Profile 4,887 faculty members Other Degrees, 182 , 4% Baccalaureate, 108 , 2%

Masters, 1,598 , 33%

Doctorate, 2,999 , 61%

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Academic Offerings Across the UPR System Undergraduate   

38 Associate Degrees 239 Baccalaureates 200 Articulated Transfer Programs between campuses leading to Baccalaureate Degrees

Graduate     

6 First Professional Level Degrees: J.D., M.D., D.M.D., PharmD and Au.D. 15 Graduate Certificates 119 Masters 34 Ph. D.’s and Professional Doctorates 41 Medicine and Dental Medicine Residency Programs

Certifications and other specializations

58% of academic 694 degree granting academic programs and professional certification programs in: programs are susceptible to • Arts professional • Sciences accreditation. • Business Of these 87% are already accredited. • Engineering •

Examples: The Business Administration School at the Río Piedras Campus is accredited by the Association to Advance Collegiate Schools of Business (AACSB), making it the first public business school to achieve this distinction in the Caribbean Region.

Less than 5% of the 13,000 business schools worldwide have achieved this prestigious recognition.

Technology

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List of Specialized Accreditations        

             

ABET – CAC ABET - ETAC Accreditation Commission for Midwifery Education Accreditation Commission for Programs in Hospitality Administration (ACPHA) Accreditation Council for Business Schools and Programs (ACBSP) Accreditation Council for Education in Nutrition and Dietetics Accreditation Council for Pharmacy Education Accreditation Council for Occupational Therapy Education, American Occupational Therapy Association Accrediting Council on Education in Journalism and Mass Communication (ACEJAC) American Alliance of Museums American Bar Association American Chemical Society American College of Nurse Midwives American Dental Association American Physical Therapy Association American Psychological Association American Society of Cytopathology American Speech-Language-Hearing Association American Veterinary Medical Association Association of American Laws Schools Association of College and Research Libraries, American Libraries Association Association to Advance Collegiate Schools of Business

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                      

Commission on Accreditation for Health Informatics and Information Management Education Commission on Accreditation of Healthcare Management Education Commission on Accreditation of Ophthalmic Medical Programs Commission on Collegiate Nursing Education Computing Accreditation Commission, ABET, Inc. Council for the Accreditation of Educator Preparation. Council on Accreditation of Nurse Anesthesia Educational Programs Council on Education for Public Health Council on Rehabilitation Education Council on Social Work Education Engineering Technology Accreditation Commission, ABET, Inc. International Association of Counseling Services Joint Commission on Allied Health Personnel in Ophthalmology and Commission on Accreditation of Allied Health Education Programs Joint Review Committee on Education in Radiologic Technology Joint Review Committee on Educational Programs in Nuclear Medicine Technology Liaison Committee on Medical Education National Accrediting Agency for Clinical Laboratory Sciences National Architectural Accrediting Board National Association for the Education of Young Children National Association of Schools of Public Affairs and Administration National League for Nursing Accrediting Commission National Council for Accreditation of Teacher Education (NCATE) Planning Accreditation Board 34

Across Components

Graduate

• Conferring over 487 Ph.D.'s in the last 5 years, close to 50% in Science and Technology.

Academic Programs

Research

• More than 90% of research and scholarly articles published in indexed and peer reviewed in Puerto Rico produced by the UPR faculty and their students.

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Student Profile Enrollment Data – Trends 2012-13 to 2016-17 64,000

62,182

62,000

60,351

60,000 58,000

57,482

57,772

58,104

2012-13

2013-14

2014-15

56,000 54,000

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2015-16

2016-17

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Student Profile Applications, Admissions and Freshmen Enrollment 20,000 18,000 16,000 14,000 12,000

18,350

17,798 15,599

16,127

15,528

14,295 12,383 10,849

12,514 10,771

13,024 11,278

12,260

14,245 12,374

10,000 8,000

6,000 4,000 2,000 Applications Admissions Freshmen Enrollment

2012-13 15,599 12,383 10,849

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2013-14 15,528 12,514 10,771

2014-15 16,127 13,024 11,278

2015-16 17,798 14,295 12,260

2016-17 18,350 14,245 12,374

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Tuition and Academic Costs: Federal Pell Grant Program Amounts Annual maximum amount to be eligible for $5,920 Pell Grant Award

Percentage of Pell Grant Participants 2006 - 2015 70,000

78.0% 75.1%

$5,775

76.0%

73.6%

60,000

74.0%

71.8%

$5,815

70.7%

50,000

72.0% 68.8%

69.5%

69.6% 70.0%

40,000

$5,730

68.0% 65.5%

66.0%

30,000 62.8%

$5,645

63.1%

64.0%

20,000

62.0% 60.0%

10,000

58.0%

Matrícula Total Sub Graduada Undergraduate Enrollment

Total Participantes FPell Pell Grant Participants

2015-2016

2014-2015

2013-2014

2012-2013

2011-2012

2010-2011

2009-2010

2008-2009

2007-2008

56.0% 2006-2007

2017-18

2016-17

2015-16

2014-15

2013-14

0

% Participación %Participation

 Since 2006-2007, the participation of students receiving financial assistance from the Federal Pell Grant has been over 60%.

 The highest Pell Grant participation percentage was 75.1% in 2011-2012. UNIVERSITY OF PUERTO RICO

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UPR Retirement Plan The Governing Board of the University establishes contribution rates to the Retirement System based on an actuarially predetermined rate recommended by an independent actuary at the beginning of the fiscal year.  The actuarially predetermined rate is the estimated amount to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded liability.  The University is required to contribute the difference between the actuarially predetermined rate and the contribution rate of employees.

 Funded Ratio of the UPR’s Retirement Plan as of Jan 1st: 2011

2012

2013

2014

2015

41.0%

39.7%

40.8%

43.9%

46.6%

 The funded ratio would be adversely affected by the cost reduction plan that will be implemented as part of the Fiscal Plan required by the Financial Oversight and Management Board.

 The University contributed 17.8% of covered employee payroll.  The University’s contributions to the Retirement System amounted to approximately $88,251,000.

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