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Actuarial Valuations


 

PERA is required by statute to hire an actuary to prepare actuarial valuations for PERA’s cost-sharing defined benefit plans on an annual basis. That actuarial valuation provides information essential to understanding the financial health of those plans and helps determine the level of contributions needed in order for those plans to become or remain fully funded.

Beginning in 2014, new pension accounting and financial reporting standards issued by the Governmental Accounting Standards Board require PERA to develop a second actuarial valuation for each plan to derive accounting information PERA and its employers need for their financial statements, required supplementary information, and footnote disclosures.

The first set of actuarial valuations (funding valuations) is used to determine the financial health of pension plans and how to fund them.  The second set of actuarial valuations (GASB valuations) is used to determine how accountants account for pension costs.  Many of the actuarial assumptions and methods used to develop the actuarial valuations are the same.  There are a few assumptions and methods, however, that differ between the two types of actuarial valuations.  Because of that, there are often differences in the results. As an example, the funding valuations use an actuarial value of assets when determining the unfunded liability, which is smoothed over a 5-year period, while the GASB valuations use the market value of assets, which is not smoothed.

More information about the two sets of actuarial valuations is available in the Actuarial Section of our Comprehensive Annual Financial Report.  All actuarial valuations listed below are “funding” valuations unless noted as “GASB” valuations.

Fiscal Year 2017 Valuations