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Employees Retirement System says $500 million installment should raise funded ratio toward 80%
Summary
Jim Potvin of the Employees Retirement System of Georgia told the House appropriations subcommittee that a second $500 million state installment and recent investment returns are expected to raise the system's funded ratio from about 72% to roughly the mid‑70s and move the fund closer to the 80% target used to support COLA calculations.
Jim Potvin, executive director of the Employees Retirement System of Georgia, told the House appropriations subcommittee that the state’s planned second $500 million installment to pension funds will directly reduce the system’s unfunded liability and help raise the plan’s funded ratio.
“Each 1 of these $500,000,000 installments reduces directly the funded liability by almost 10%,” Potvin said, adding that the system’s funded ratio should improve from about 72% in FY23 to “about the 75 or 76% range” after the installment and recent market gains.
Potvin said the system has seen two straight years of double‑digit investment returns and about 7.2% through seven months of the current fiscal year. Those returns combined with the second installment would “get us very close to that 80% level,” he said, a target tied to how cost‑of‑living adjustments are calculated.
Potvin answered committee questions but reported no change to the actuarial contributions requested previously for the constitutionally funded plans that receive state appropriations.
The presentation summarized past actions (a previous $500 million installment made in FY24 to pay down liability) and current assumptions (an estimate of funded ratio improvement, not a formal post‑installment valuation). Potvin said a formal actuarial valuation was not yet available at the hearing.
Ending: The Employees Retirement System indicated improved investment returns and the planned second installment should materially reduce unfunded liability and move the system closer to the 80% funding target, but the committee will rely on a later actuarial valuation for formal confirmation.
