Performance Details

Department of Revenue - Treasury Management

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Mission

The mission of the Treasury Division is to manage the state's funds consistent with prudent investment guidelines and Governmental Accounting Standards Board (GASB) rules.

Core Services

• Manage the investment of state funds
• Maintain the state's credit rating and provide capital financing for state agencies
• Manage unclaimed property and reunite with owners

Mission Results	Core Services
A: Maximize the value of the funds under the stewardship of the Treasury Division.  Details > TARGET #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns.	A1: Manage the investment of state funds  Details > TARGET #1: Maintain average longevity of the investment officers at or above five years. TARGET #2: At least four investment staff will have their Chartered Financial Analyst (CFA) designation.
Mission Results	Core Services
B: A low cost of State indebtedness.  Details > TARGET #1: Yields at which the state issues debt will not exceed 30 basis points of the applicable benchmark.	B1: Maintain the state's credit rating and provide capital financing for state agencies  Details > TARGET #1: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year.
Mission Results	Core Services
C: Unclaimed property owners will be united with their property.  Details > TARGET #1: Unclaimed Property will refund more properties each year.	C1: Manage unclaimed property and reunite with owners  Details > TARGET #1: Increase the number of first time reporting Alaska companies.

Performance Detail

Target #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns. Methodology: FY2021 one-year return data is for the period 7/1/2020 through 6/30/2021. One-year Return Data for Funds Managed by the Treasury Division Fiscal Year Fund Actual Return Target Return FY 2021 Gen Fund/Other Non-segregated Fu 0.09% 0.00% FY 2021 Public School Trust Fund 27.21% 27.28% FY 2021 Int'l Airports Revenue Fund 0.10% 0.00% FY 2021 Const Budg Resv Fund-Main Acc 0.19% 0.09% FY 2021 Retirement Hlth Ins Fund-LongTer 16.78% 16.81% FY 2021 Retirement Hlth Ins Fund- Maj Me 0.19% 0.09% FY 2021 Power Cost Equalization Fund 14.43% 14.44% FY 2021 Illinois Creek Reclamation Fund 27.21% 27.28% FY 2021 Alaska Higher Education Fund 27.21% 27.28% FY 2021 Gen Fund/Other Non-segregated II 2.52% 2.52% Analysis of results and challenges: A combination of investments that is expected to produce the highest investment return for a given amount of risk is known as a "point on the efficient frontier." Each fiduciary for a fund reviews points on the efficient frontier and selects the combination of investments consistent with their appetite for risk and return of the fund. This selection is known as the target asset allocation. Target returns assume the total rate of return of passively managed indexes invested in the same proportions as the target asset allocation. A fund's investment return will differ from its target return if its asset allocation differs from the target asset allocation or if the returns of the underlying investments differ from those of the passively managed indexes. In FY2021, 22 of the 29 funds hit or exceeded their target returns.

Target #1: Maintain average longevity of the investment officers at or above five years. Average Longevity of Investment Staff Fiscal Year Number of Years FY 2021 10.2 +6.25% FY 2020 9.6 +12.94% FY 2019 8.5 +14.86% FY 2018 7.4 -12.94% FY 2017 8.5 -2.3% FY 2016 8.7 0% FY 2015 8.7 +12.99% Analysis of results and challenges: A seasoned investment staff contributes to improved investment performance.

Target #2: At least four investment staff will have their Chartered Financial Analyst (CFA) designation. Number of Staff Holding CFA Designation Fiscal Year Number of Staff FY 2021 7 FY 2020 8 FY 2019 8 FY 2018 8 FY 2017 8 FY 2016 8 FY 2015 9 Analysis of results and challenges: The Chartered Financial Analyst (CFA) designation takes a minimum of three years to obtain. Staff are continuing to pursue the Chartered Financial Analyst (CFA) designation. Increased knowledge is important as more assets are internally managed and the complexity of investments increase.

Target #1: Yields at which the state issues debt will not exceed 30 basis points of the applicable benchmark. Methodology: There were no General Obligation Bonds issued during fiscal years 2017 through 2020. Percent of Bonds Issued at Less Than 30 bp Over Benchmark Fiscal Year Percent of Bonds FY 2021 100% FY 2020 0 0% FY 2019 0 0% FY 2018 0 0% FY 2017 0 FY 2016 100% FY 2015 100%

Target #1: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year. Updates Provided to Ratings Agencies Fiscal Year # of Updates FY 2021 9 FY 2020 7 FY 2019 7 FY 2018 6 FY 2017 7 FY 2016 16 FY 2015 11 FY 2014 5 FY 2013 4 FY 2012 4 FY 2011 4 FY 2010 5 FY 2009 4 FY 2008 4

Target #1: Unclaimed Property will refund more properties each year. Property Claims Paid per Year Fiscal Year # of Properties Paid Increase over Prior Year FY 2021 20,003 3,316 FY 2020 16,687 5,460 FY 2019 11,227 <6,126> FY 2018 17,353 <2,268> FY 2017 19,621 <5,103> FY 2016 24,724 8,003 FY 2015 16,721 522 FY 2014 16,199 4,247 FY 2013 11,952 <5,581> FY 2012 17,533 <41> FY 2011 17,574 3,891 FY 2010 13,683 6,210 FY 2009 7,473 1,712 FY 2008 5,761 453 Analysis of results and challenges: The Unclaimed Property Program (UCP) staff promotes, educates, and encourages owners to file claims online. When owners complete the demographic portion of claims online, UCP staff has more time to review, approve, and pay claims. Challenges include identifying owners who have relocated outside of Alaska and more complex claim filings. Improvements were implemented in FY20 that streamlines the claim authentication process, auto approving claims for payment that meet certain criteria. In FY20, 4,466 properties (~27%) benefitted from this process. In FY21, UCP transitioned onto a new claims system which has improved claims processing and timeliness.

Target #1: Increase the number of first time reporting Alaska companies. Companies Reporting for First Time Fiscal Year # of 1st Time Reporting FY 2021 25 FY 2020 39 FY 2019 71 FY 2018 52 FY 2017 40 FY 2016 56 FY 2015 49 Analysis of results and challenges: The Unclaimed Property Program (UCP) encourages voluntary compliance as the most effective tool for reporting unclaimed property. An important aspect of voluntary compliance is educating companies about the requirements of Alaska's Uniform Unclaimed Property Act. Education includes internal state communications, outreach at external conferences, desk audits and web enhancements. FY2021 was focused on transitioning onto a new claims system, rather than outreach, but will focus on outreach in the coming years.

Current as of October 7, 2021