Region, Section and ChapterDiscussion Topic

Region Treasurers

November, 2011New Brunswick, New Jersey

Rob Anderson – MGA TreasurerEnrique Alvarez – MGA Treasurer ElectLarry Bolsch – MGA Director of Finance & Administration

Agenda• Communication & Action Plan

• Region, Section and Chapter Reserves:

• Issue, Impact, Progress & Data

• Attachments and Questions

• Attachment Shows which units would have shared based on 3 year average 2008-2010 and what amounts each would have absorbed

• Glossary04/21/232

Communication and Action Plan• After Discussion, MGA Staff will draft a general

email communication for socialization with all Geo Unit’s Leadership in Q4 2011

• MGA will be notified in Q2 2012 as to impact to MGA & impact to Regions, Sections & Chapters for the 2011 year

• Communication and timeline as to how and when the reserve sharing process will be completed in 2012 for the 2011 financial year

• Region Treasurer assistance will be requested

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Reserves Impact• In 2008: MGA absorbed $2.3 million in Spending Rule & Pension

Loss related to Regions, Sections & Chapters Reserve %’s, reducing MGA’s Reserve Balance to only $24k.

• In 2009: Region, Section and Chapter’s share of Pension Gain would have been $800k. This went to MGA as did the losses.

• In 2010: MGA absorbed $1.2 million loss related to Regions Sections and Chapters into the P&L of MGA

• There is concern that the XML Project could cause the spending rule allocations to deplete MGA reserves if we do not share the allocations.

• Currently all Gains and Losses bypass the Regions Sections and Chapters and are reflected only in MGA.

• Sharing would allow funds to be used by MGA on Projects & for Benefits that impact Members.

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Progress to Date• Issue presented to MGA’s Managing Director, VP, Treasurer,

Finance Committee, Operating Committee and Board

• A complete 3 year Review of Reserves Balances was made

• Motion approved – that Regions, Sections and Chapters should Share in Reserve Allocations using 3 year average formula noted

• STEP PROCESS: • Cash Transfers for Region, Section & Chapter Share in 2012

for 2011 was agreed

• Reserve Sharing may allow for items such as: • MGA to execute on short term and long term projects not

currently in the operating budget• Adding programs to units for the benefit of the member• Providing additional funding in Sections Congress Years

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Reserve Data Points• 2008:

• Total Pension Loss: $(20) million• Total Investment Loss: $(72) million• New INITS and Foundation $(5.5) million• MGA and Geo Unit Share: $(3.9) million. Of which $(2.3) million is Geo

Unit Share – all absorbed by MGA.

• 2009:• Total Pension Gain: $4.5 million• Total Investment Gain: $51 million• New INITS and Foundation $(5.9) million• Geo Units would have received back $800k from prior year losses

• 2010• Total Pension Loss: $(2.8) million• Total Investment Gain: $25 million• New INITS and Foundation $(9.0) million• MGA and Geo Unit Share: $(1.3) million. Of which $(1.2) million is Geo

Unit Share of Losses04/21/236

2010 L 50 Reserve Information

Reserve data is available by Region, Section and Chapter (attached)3 Year Averages and Reserve to Expense Rations Prepared (attached)Qualifying Regions, Sections & Chapters with impact (attached)

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Net Assets at 12/31/2010 REGION 1 REGION 2 REGION 3 REGION 4 REGION 5 REGION 6 REGION 7 REGION 8 REGION 9 REGION 10 TOTALS

Region 109,596.54 198,375.27 465,567.42 244,952.82 283,035.31 392,239.20 759,288.81 499,171.40 401,546.51 701,182.28 4,054,955.56 Section 2,397,156.65 2,036,282.71 1,784,349.58 767,929.19 1,366,117.42 2,936,689.03 1,329,104.27 2,081,494.12 1,366,068.29 5,064,594.07 21,129,785.32 2010 Total 2,506,753.19 2,234,657.98 2,249,917.00 1,012,882.01 1,649,152.73 3,328,928.23 2,088,393.07 2,580,665.52 1,767,614.80 5,765,776.35 25,184,740.87

2009 Total 2,416,539.73 2,101,835.89 2,247,558.05 963,731.26 1,611,039.94 3,204,817.28 2,068,523.12 2,744,578.16 1,527,583.57 5,222,460.94 24,108,667.94

Net Change 90,213.46 132,822.09 2,358.95 49,150.75 38,112.79 124,110.95 19,869.95 (163,912.64) 240,031.23 543,315.41 1,076,072.94

Glossary of Terms• OU – Operating Unit

• Reserve Ratio – Reserve Balance Divided by Expenses at Year End

• Spending Rule – Approved annual expenses incurred for New Initiatives and the IEEE Foundation

• Net Assets = Reserves: Income less Expenses in each year

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