State actuary recommends higher inflation and salary-growth assumptions; council votes to keep current assumptions

Acting Chair Katie Trebnsey called the Oct. 8 Pension Funding Council meeting to order as members heard recommendations from the Office of State Actuary (OSA) and the state actuary on the biennial economic experience study.

Luke Maselink, senior actuary with the Office of the State Actuary, told the council that the 06/30/2024 measurement showed combined funded ratios near 100% and that the strong fiscal-year 2020-21 investment returns continue to be recognized under the statutes'smoothing rules. "These are point-in-time measurements," Maselink said, adding that the smoothing method spreads a large single-year gain or loss over up to eight years to limit volatility in reported funded status and contribution rates.

The OSA recommended three changes to long-term economic assumptions used for pension funding: raise the inflation assumption from 2.75% to 3.0% to reflect persistent higher inflation and…