The Portsmouth Supplemental Retirement Board convened on November 2, 2023, to discuss the financial health and future projections of the city's retirement systems, which primarily serve retired police and fire personnel. The meeting highlighted the challenges posed by a largely inactive participant base, as both the fire and police systems have been frozen for decades, limiting new active participants and resulting in a predictable but stagnant financial landscape.

The board reviewed the current status of the retirement systems, noting that the majority of liabilities stem from retirees already receiving benefits. With only eight active participants remaining—one in fire and police and seven in the supplemental system—the focus remains on managing payouts to existing retirees. The meeting underscored the importance of understanding the actuarial value of assets and liabilities, which are critical for budgeting and planning future contributions.

A significant point of discussion was the unfunded actuarial liability, which currently stands at approximately $93 million, reflecting a funded status of about 68%. This figure indicates a gap between the assets available and the liabilities owed to retirees. The board emphasized the need for careful monitoring of investment returns and contributions, as the retirement systems are not expected to generate positive cash flow due to the high volume of payouts.

The board also addressed the smoothing of asset values over a five-year period to mitigate the volatility of market fluctuations. This approach aims to provide a more stable financial outlook, although it does mean that losses from previous years will gradually impact the funded status as they are recognized.

Looking ahead, the board anticipates a slight increase in contributions, projected to rise to approximately $8.4 million for the upcoming year. This increase is necessary to address the unfunded liability and ensure the long-term sustainability of the retirement systems. The discussions highlighted the importance of maintaining a balance between contributions and payouts, especially as the demographic of retirees continues to grow.

In conclusion, the Portsmouth Supplemental Retirement Board's meeting underscored the ongoing challenges of managing a retirement system with a shrinking active participant base. The board's proactive approach to addressing unfunded liabilities and stabilizing contributions is crucial for the financial health of the retirement systems, ensuring that they can meet their obligations to retirees in the years to come.