Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Actuarial Experience Study topic
No spam. Unsubscribe anytime.
PERS board committee approves actuarial experience study; assumptions largely unchanged
Summary
The Administrative Committee approved actuarial experience‑study reports and the consultants' recommendations, keeping core economic assumptions (2.4% inflation, 7% investment return) and adjusting demographic decrements; recommendations are based on June 30, 2024, data and do not include Tier 5.
The Public Employees' Retirement System of Mississippi Administrative Committee voted to approve the actuarial experience study reports and the recommendations that actuaries will use for the upcoming valuation.
Kevin, actuary with CABMAC, summarized the study and the recommended assumptions, saying the team recommended maintaining the 2.4% inflation assumption and a 7% investment rate of return. "We feel real comfortable with maintaining the current assumption of 2.4% as well...we feel real comfortable right now that the 7% is reasonable," Kevin said.
Actuaries presented a four‑year look at demographic gains and losses across salary, mortality, retirement, withdrawal and disability. They identified salary increases over the recent period as a primary driver of near‑term liability increases: higher pay raises raise future benefits immediately in actuarial records, while additional employer contributions occur over time.
Ed Coble of CABMAC described demographic changes and the actuarial adjustments the firm recommended: modest changes to retirement decrements in several systems, decreases in termination/withdrawal rates for PERS (and increases where warranted for Highway Patrol), and minor mortality adjustments using the most recent public‑sector mortality table. Coble said the new mortality table introduced since the study would be reviewed next cycle and that the net effect of the recommended changes as a package was a small reduction in unfunded liability for PERS and a slightly improved funded ratio.
The consultants emphasized the valuation and projections presented were based on actuals through June 30, 2024, and did not include any Tier 5 assumptions. Committee members asked and were told the analysis did not model Tier 5 impacts.
Why it matters: The study sets the actuarial assumptions and demographic decrements that determine contribution recommendations and the actuarially determined employer contribution (ADEC) used by employers and lawmakers.
Selected technical points reported
- Inflation: recommended to remain at 2.4%. - Investment return: recommended assumption 7%. - Mortality: actuaries used the most up‑to‑date public‑sector mortality table available at study time and made minor adjustments; Coble said the newly released mortality update showed little change relative to the table they used. - Withdrawal/termination: actuaries refined withdrawal tables after observing higher‑than‑expected early‑service terminations; this change increases liabilities slightly in the short term to reflect observed behavior. - Data base: Q&A confirmed the study used June 30, 2024, data and did not project Tier 5 effects.
Board action
A committee member moved to approve the experience study and recommendations; the committee voted in favor and the motion carried.
Ending
Staff said the same actuarial reports will be used in the upcoming valuation work. The actuarial team will present similar results to the Highway Patrol administrative board at a separate meeting.
