Ratio of active members in PERS to retired members decreased by 33% over 10 years.
The Mississippi Legislative PEER Committee releasing its report titled 2020 Update on Financial Soundness of the Public Employees’ Retirement System on Thursday.
According to the report, “Financial soundness” should be defined not as a point-in-time comparison of assets and liabilities but as a multifaceted construct. The PERS Board, with assistance from its staff and other contractual advisers, endeavors to maintain the financial soundness of the plan.
PEER notes that over the past 5- and 10-year periods, the PERS actual average annual payroll increase has continued to remain below the actuarial model’s projected rate of salary increase (currently assumed at 3.00%). From FY 2010 through FY 2020, the ratio of active members to retired members decreased by approximately 33%, driven by the increasing number of retirees and the decreasing number of active members.
The reports states that the PERS Board has implemented a policy to reduce the PERS plan’s investment return assumption from its current rate of 7.75% to the actuary’s recommended rate of 7.5%, using future investment gains above the plan’s assumed returns. Based on the results of the evaluation metrics in the plan’s funding policy, the actuarially determined contribution metric is “red” meaning that the PERS Board must consider making changes to the employer contribution rate.
As of June 30, 2020, the PERS funding ratio was 58.8%, a decrease from 61.3% as of June 30, 2019. For FY 2020, the PERS plan’s combined investment portfolio experienced a return of 3.35%, and the market value of the system’s assets was approximately $28.2 billion.
You can read the full report below.
2020 Peer Pers by yallpolitics on Scribd
Frank Corder
