The Center Square – The Public Retirement Systems’ Actuarial Committee convened to review and approve the 2024 annual actuarial valuations for multiple statewide pension funds this week, setting employer contribution rates and assessing financial health.
Clerks of Court Retirement and Relief Fund
The Clerks of Court Retirement and Relief Fund is on track to eliminate its remaining unfunded liability from 1989, totaling $41 million, by 2029 as scheduled. The system maintains a funding deposit account, which has accumulated over the years by holding contribution rates above the minimum requirement. This account, currently at just over $7 million, decreased from the previous year due to a cost-of-living adjustment (COLA) funded from these reserves.
The plan’s actuarial value of assets stands at $808.4 million, compared to a market value of $817 million, reflecting a conservative valuation approach. The funded ratio increased to 83.1%, continuing a slow but steady upward trend. The system reported a market return of 11.6% for the fiscal year ending June 30, 2024, with an actuarial return of 6.3%, slightly below the assumed rate of 6.55%, resulting in a minor investment loss.
Employer contributions were adjusted to 19.25% of payroll, down from the previous 21.5% minimum rate. The board has held the rate at 23% for several years, ensuring stability. The system’s funding deposit account has been used to finance COLAs and offset employer contributions, with consistent growth since 2015.
A third-party actuarial review found no significant deficiencies in the reporting process, confirming compliance with actuarial standards. The committee approved the 2024 actuarial valuation and recognized the minimum recommended employer contribution rate of 19.25% for fiscal year 2026.
District Attorneys’ Retirement System
Membership in the District Attorneys’ Retirement System rose to 753, with payroll increasing from $66 million to nearly $70 million. The system remains financially stable, benefiting from payroll growth that brings in new contributions while maintaining low liabilities for new members.
Unlike other plans, this system had no unfunded liability in 1989. Its funded ratio increased to 99.1%, up from 97.5% the previous year. The actuarial valuation showed a market return of 11.7% and a five-year smoothed average return of 6.1%.
Firefighters’ Retirement System
The Firefighters’ Retirement System saw active membership rise to 4,590, reversing a long-standing trend of stagnation. Payroll increased from $266 million to $287 million, providing a broader base to cover costs associated with a frozen unfunded liability, which is set to be paid off within 10 years.
The system’s unfunded liability decreased from $467 million to $422 million, aided by a legislative funding method shift before 2020 that prevents annual additions to the unfunded liability. Assets stood at approximately $2.5 billion, with a similar market valuation.
Municipal Employees’ Retirement System
The Municipal Employees’ Retirement System consists of Plan A for employers outside Social Security and Plan B for those within it. Plan A membership declined slightly due to legislative changes that shifted Lafayette’s new employees to a different system. Payroll still increased due to salary growth, contributing to a funded ratio rise from 76.52% to 80.16%.
MERS maintains a frozen unfunded liability of $42.9 million from 1989, on track for scheduled repayment. Its funding deposit account grew from $17 million to $29.3 million, providing a cushion for future COLAs and employer contribution offsets. The plan’s assets stand at just over $1 billion, with a market return of 10.5% and an actuarial return of 6.2%, slightly below the assumed rate of 6.85%.