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Employees Retirement System says $500 million installment should raise funded ratio toward 80%
Summary
The Employees Retirement System of Georgia told the committee a planned $500 million installment will reduce unfunded liability and is expected to boost the system's funded ratio from roughly 72% to the mid-70s, with a stated goal of reaching 80%.
Jim Potvin, executive director of the Employees Retirement System of Georgia, told the joint appropriations panel that a second $500 million installment proposed in amended FY25 budgets would be applied directly to reducing the retirement system's unfunded liability.
The payment is part of required actuarial contributions the system calls the ADEC. "Each one of these $500,000,000 installments reduces directly the funded liability by almost 10%," Potvin said. He told committee members the system has not yet received a new valuation since the first installment but estimates the funded ratio should rise from the 72% reported in FY23 to about the 75% to 76% range.
Why it matters: the system and the committee said improving the funded ratio would move the system closer to an 80% funded level, which the presenters said would improve the cost formula used to calculate cost-of-living adjustments for retirees.
Potvin noted investment performance as a supporting factor: "We've had two straight years of double digit returns. And this year we're at about 7.2%, seven months through the year." He did not commit a specific new valuation date; the committee was told a formal valuation is pending.
Committee exchange and next steps: Potvin offered to take questions and the committee moved on after discussion. No formal motions or votes were recorded during his presentation. The system is asking the Legislature to keep the installment plan in the amended FY25 package so the payment can be made as proposed.
Ending: Potvin said the ERS will return to the committee if members have follow-up questions and will provide updated valuation results when they are available.
