Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audits Actuarial topic
No spam. Unsubscribe anytime.
Audits and actuarial valuations: ORSC hears mixed results and improved funded ratios for several systems
Summary
The council received internal audit updates and actuarial and health-care valuation highlights: several systems reported improved funded ratios driven by positive investment returns and other experience; one open audit recommendation on derivatives confirmations remains with a Dec. 2025 target.
ORSC members reviewed audits and actuarial and health-care valuations from multiple retirement systems at the March 13 meeting.
OPERS internal audit presented its 2024 report in the format requested by the council. Director Karahar said the report shows substantial remediation activity: ten additional recommendations were closed after the report’s finalization and management is working on remaining items. The only open prior-year recommendation relates to counterparty confirmations from a derivatives audit; Karahar said implementation requires external legal counsel and counterparty engagement and the targeted implementation date is December 2025.
Actuarial presenters reported improved funded ratios in several systems, largely because investment returns exceeded assumptions in the measurement year. Director Hood described STRS results showing roughly 10% investment returns versus an assumed 7%, and he reported that STRS’s market-value funded ratio improved from about 80% to about 82.5% and the funding period shortened from 11.2 years to 10.1 years; he also noted STRS’s negative cash flow of roughly 4.6% remains a long-term risk.
SCRS’s actuarial summary showed an improvement in the basic pension funded ratio from about 76.7% to 79% as of June 30, 2024; the presenter noted a market return of 9.54% for the fiscal year and that the board approved a 2.5% cost-of-living adjustment for 2025 (the statutory maximum), which produces an actuarial loss relative to assumptions but did not reduce the reported funded ratio.
Health-care valuations also showed improvement for several systems. One presenter reported a health-care fund funded ratio rising from roughly 46% to about 61.6% on strong investment returns and cost management; another system reported the highest historic health-care fund balance and long-term solvency projections exceeding prior years.
Council members asked procedural questions about audit-report dates and the presentation of summary materials; audit staff said the council’s published report reflects the internal audit committee’s approval timing and agreed to consider clearer date annotations in future publications.
The council received the reports; no formal council action was recorded on the audit or valuation presentations at the meeting.
