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Consultants tell education committee PSE health fund faces long‑term funding gap without changes
Summary
Actuarial consultants told the Joint Committee on Education that the State Public School Employee (PSE) life and health insurance fund has a sizable surplus now but could face sustained losses by the late 2020s unless district contributions or state subsidies are increased or indexed to medical trend.
Actuarial advisers and the state employee benefits director told the Joint Committee on Education that Arkansas’ public school employee health fund is currently well‑capitalized but not automatically solvent long term.
Patrick Klein, an actuary with the Segal Group, said the fund is projected to close 2024 with about $265.7 million in assets, well above the 14% target reserve recommended for the plan. “If we do nothing to the funding, the expenses are gonna overtake the revenue, so we’re gonna start seeing a loss in 2025,” Klein said, summarizing baseline projections that rely on Milliman expense trends and updated pharmacy rebate assumptions after a July PBM change.
Klein presented three modeled approaches: leaving funding unchanged (baseline), indexing the minimum district…
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