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Actuarial valuation shows Oklahoma City retirement system 94.3% funded; city contribution set to 8.4% starting July 2026
Summary
The Oklahoma City Employee Retirement System’s annual actuarial valuation (as of Dec. 31, 2024) reported an unfunded actuarial liability of $56,582,000 and a funded ratio of 94.3%, producing a total contribution requirement of 14.4% of payroll and a city share of 8.4% beginning July 1, 2026.
Francois, the plan’s presenting actuary, told the board that the annual actuarial valuation as of Dec. 31, 2024, shows the system has an unfunded actuarial liability of $56,582,000 and a funded ratio of 94.3%.
The report combines member and city financial data, current plan provisions and actuarial assumptions. Francois said the valuation uses an entry age normal cost method and phased-in recognition of investment gains and losses to reduce contribution volatility. He described the plan as “not a mature plan, but … not a brand new plan,” noting most active members have under 15 years of service and are younger than 60.
Key figures presented: the normal cost for active members is 12.09%, the amortization of the unfunded liability produces a rate of 2.31%, and the total contribution requirement is 14.4% of payroll. Members currently pay 6% of payroll; the actuary said that leaves the city with an employer contribution requirement of 8.4%, effective July 1, 2026.
Francois highlighted that a large investment loss in 2022 remains the primary driver of this year’s actuarial loss and that approximately $41.1 million in losses remain to be recognized in future valuations, which could raise contribution requirements if markets do not improve.
Board members questioned the decreasing amortization period used to pay off the unfunded liability. One member asked whether there is a target amortization period; Francois said the theoretical target is to amortize fully (payoff to zero) but described a common practice of using layered amortization as the remaining period shortens to smooth impacts on required contributions. The member also noted a city ordinance that caps the employer contribution at 10%, expressing concern about the potential for hitting that cap if contribution requirements increase sharply.
After the presentation and Q&A, the board moved, seconded and approved Item 3a, receiving the actuarial valuation report and the related contribution recommendations.
