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Actuary: Mount Pleasant public-safety pension roughly 80%+ funded; contribution rate near $1 million
Summary
GRS Consulting reported the Act 345 (fire and police) pension valuation showed assets and liabilities both rose in 2024, producing an actuarial funded ratio in the mid-80s and an estimated annual contribution near $1 million; actuary cautioned that investment returns are the primary risk to funding.
An outside actuary told the Mount Pleasant City Commission on July 28 that the city’s Act 345 pension for police and fire remains in a generally healthy funding posture but needs continued attention to demographics and investment risk.
Casey from GRS Consulting summarized the December 31, 2024, actuarial valuation for the Act 345 plan and said the plan’s actuarial liabilities were “just over $40,000,000” while plan assets were “somewhere in the neighborhood of $35,000,000,” producing a funded ratio the presentation described as about 84 percent on a market basis.
Why it matters: The funded ratio and actuarially determined contribution affect how much the city must set aside each year to meet future pension obligations. The actuary said the plan’s funding is driven chiefly by investment returns and demographic trends.
Key points from the valuation - Funding position: “This fund is over 80% funded,” Casey said. The actuarial liabilities rose modestly from the prior year; assets also increased and both moved up by roughly 3 percent, he said. - Contribution estimate: The actuary presented a percent-of-payroll contribution result “somewhere in the neighborhood of 30% of pay” and stated that translated to “somewhere in the neighborhood of $1,000,000 for this year.” Casey described the employer rate components as a normal cost (he cited an employer normal-cost component of about 16.27%, net of a 5% member contribution) plus an amortization payment to retire unfunded liabilities. - Fund drivers and risks: Investment return was emphasized as the principal risk; Casey said deviations from the assumed rate (around 6.9%-7%) are the largest source of future funding volatility. Demographic risks (mortality, retirements) are slower-moving.
Commission discussion and context Commissioners and the public asked questions about the plan’s assumptions, the amortization period and whether the board should target higher contributions to accelerate funding. Casey reiterated that the computed contribution “may be considered as a minimum contribution rate” and that paying more now could improve benefit security in the long term.
Ending: The report will inform the city’s budget and millage-supported payment strategy for the Act 345 plan; the actuary and commission discussed continuing to monitor returns and demographic changes as staff prepares budget numbers.
