PERA Board receives actuarial update on three largest plans

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PERA Board receives actuarial update on three largest plans

The Board of Trustees received an actuarial update on the financial health of PERA’s three largest plans from its actuary, Gabriel Roeder Smith & Co., at the Dec. 13, 2018 board meeting.  The actuarial valuation results were determined as of July 1, 2018 and reflect all of the changes contained in the 2018 Omnibus Retirement Bill as well as positive investment returns through June 30, 2018.

The funding ratios are 80 percent for the General Employees Plan, 89 percent for the Police & Fire Plan, and 98 percent for the Correctional Employees Plan.  These funding ratios represent the ratio of the market value of assets to the actuarial accrued liabilities for each plan.  In other words, they represent the percentage of benefits that have been earned by plan members that are currently funded.

Making progress towards 100 percent funded plans is important.  The results confirmed that as of the valuation date, all three funds are expected to reach full funding within the targeted 30-year timeframe established by the legislature.

The Board also received results as reported under rules from the Governmental Accounting Standards Board (GASB) as well as several measurements demonstrating maturity and volatility measurements for each plan.  A full understanding of the financial health of pension plans requires understanding not just the current funding status, but also the direction in which the plan is heading.  The plans are all expected to trend towards a better funding status.  However, that path is certain to be less than smooth.

 

Resources:

Actuarial Valuations