John Salsrom, executive director of the Cincinnati Retirement System, and Bill Mueller, chairman of the CRS board of trustees, told the City of Cincinnati Budget & Finance Committee on Aug. 6 that the pension plan’s funded ratio stood at 68.3% and urged a formal, incremental contribution policy to bring the plan to full funding by 2045.

The recommendation came during the board’s annual “state of the union” report. Salsrom said the plan’s funded ratio is a snapshot but the long-term direction has improved because of recent increases in the city’s employer contribution. "Those dedicated steps forward have really, really helped improve the overall funding," Salsrom said.

The nut graf: the board asked council to adopt a permanent budget policy that requires a small, annual increase to the city’s contribution — roughly 0.8 percentage points per year in the actuary’s scenario — so that the plan reaches 100% funding by the 2045 end date referenced in the Calabrio settlement agreement.

Details: CRS reported the plan’s funded ratio at 68.3%, down slightly from 68.8% the prior year; the health-care trust was reported at 155% funded. The actuary’s actuarially determined contribution (ADC) to reach 100% in 30 years is 31.43% of payroll, while the city’s actual contribution has been rising from a previously-minimum 16.25% toward the current dedicated contribution (17.75% this fiscal year, 18.5% planned for FY2026 and 19.25% for FY2027). Mueller said the board asked the actuary for a path that reaches full funding by 2045 and that a phased, 0.8-point annual increase would achieve that "assuming all other assumptions work out."

The board also summarized a 2023 fiduciary audit it commissioned. Mueller said the independent audit made 37 recommendations and the board has addressed about 90% of them, including a new governance manual and updated investment policy.

Council member Jeffries asked for historical context on the city's contribution and on the plan’s assumed return. Salsrom and Mueller noted the assumed return in the Calabrio settlement agreement is 7.5% and that CRS’s 2024 net return was 9.5%, above that assumption and above peer medians for public plans. Council member Walsh praised the trustees and staff for the system’s recent performance and oversight.

The board requested council adopt a permanent, biennial-updated budget policy that includes the actuary’s recommended incremental increases so the city steadily closes the funding gap.

The committee did not vote on a city action during the presentation; the board asked for the council’s consideration of the policy recommendation.

Looking ahead: the retirement board asked to be included in any Futures Commission work that touches pension policy and asked city administration to continue to work on outstanding fiduciary audit items.

Ending: The committee received the report; council members thanked CRS staff and trustees and put no formal motion or vote on the table during this presentation.