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PRB actuarial report finds mixed funding trends; board votes to study Telfer funding options and monitor FSRP effects
Summary
PRB staff actuary presented updated valuations, FSRP status changes and flagged systems at risk. The board unanimously directed staff to study methods to promote sound funding for Telfer plans and to monitor the effects of the 2021 FSRP statute through 2025.
The Pension Review Board’s staff actuary presented updated valuation trends and Funding Soundness Restoration Plan (FSRP) status changes, and the board voted unanimously to direct staff to study ways to promote sustainable funding for Telfer (firefighters’) plans and to monitor the effects of the FSRP statute.
Staff presentation: David Phee, the PRB’s senior staff actuary, reviewed changes since the September meeting, noting systems that lowered expected returns or payroll growth assumptions and systems newly at risk of FSRP triggers. He highlighted wide variation by system type: many smaller Telfer systems maintain higher assumed returns and longer funding periods, while larger systems tend to deliver higher net investment returns. Phee used Texarkana Fire as an example of how a relatively small change in assumptions can produce a dramatic shift from a finite funding period to an infinite one.
Key metrics: Phee reported that on an aggregate basis the funded ratio for major statewide systems remained near 79% but that the average funded ratio across systems was about 74%. He identified multiple systems either subject to FSRP or at risk of triggering one if their next valuation exceeds a 30‑year funding period and (in some cases) a 65% funded ratio.
Board action: Following discussion, Board Member Brainerd moved — and the board seconded — a motion directing PRB staff to study methods to promote sound funding of Telfer plans and report back with legislative recommendations for the 2027 session. The board then moved and unanimously approved a separate motion directing staff to monitor the effects of the 2021 FSRP statute and provide updates after September 2025. Both motions passed by voice vote.
Why it matters: The staff analysis illustrated how funding period, discount rate assumptions and contribution policy interact to affect long‑term solvency. The board’s study direction signals potential future legislative recommendations affecting how many firefighter plans are funded and governed.
Votes at a glance: - Motion to study methods to promote sound funding of Telfer plans and prepare recommendations for the 2027 Legislature — moved by Brainerd; seconded; outcome: approved unanimously. - Motion directing staff to monitor recent FSRP statute effects and provide updates after September 2025 — moved, seconded; outcome: approved unanimously.
Context: Phee noted that for systems subject to revised FSRPs after Sept. 1, 2025, statute already requires a 25‑year actuarially determined contribution (ADC). The board asked staff to prioritize analysis of small‑plan investment access and other measures that could improve returns for smaller systems.
Ending: The PRB appointed staff to track FSRP developments and modeling and to return with analysis and potential legislative language for consideration ahead of the 2027 session.
