Actuary tells Oklahoma City trustees funded ratios rose after year of gains; valuation received unanimously

Oklahoma City — The Oklahoma City Post Employment Benefits Trust on Feb. 12 received an actuarial valuation from Nihart showing lower liabilities and improved funded positions for the trust’s benefit blocks.

John Mallows, the actuary from Nihart, told trustees that “we have some good news. Liabilities came down.” Mallows said liabilities fell from about $356,000,000 to roughly $244,000,000 and that assets increased from about $83,000,000 to about $105,000,000 after contributions and investment returns. He said one funded ratio “went from 26% to 43% funded,” and that a second block rose from “59 and a half percent funded to 81.3% funded.” Trustees voted unanimously to receive the valuation; there was no motion to change current contribution policy at the meeting.

The valuation credited three principal drivers for the decline in liabilities: favorable actual experience, changes in actuarial assumptions (including the discount rate), and benefit payments. Mallows said the largest single net reductions were an $81 million change tied to assumptions and a $41 million gain from actual experience. He told trustees some of the experience gains stemmed from health‑care trends: premiums came in flat rather than rising at the higher trend the actuary had expected.

Mallows gave trustees a recommended annual actuarially determined contribution and noted it exceeded current contributions. “We’d recommend you contribute $1,700,000 more than you do,” he said, while noting the recommendation is not binding. The actuary also described the methodology used to develop the discount rate and cautioned that continued strong returns support the current 7.5% assumed return, but that future losses could prompt a reassessment.

Mallows flagged uncertainty around Medicare and Medicare Advantage payment changes. “I think there’s a possibility that … premiums could go way up,” he said, recommending trustees monitor Medicare developments and consider revisiting assumptions in an experience study.

Trustees recorded a unanimous vote to receive the actuarial valuation; the vote was procedural and did not change contribution or benefit policy. Trustees and staff said they will monitor premium and market developments and consider an experience study if warranted.

The valuation will be available to trustees and staff for incorporation into future budget and policy discussions.