LTSS fund tops $3 billion; State Investment Board working on equity allocation

The LTSS Trust Commission received updates on premium collections, actuarial monitoring and investment strategy during the April 29 meeting.

Ben Vechte reported that premium collections for the first two quarters of the fiscal year totaled about $782 million and that program expenditures through the same period were roughly $32 million, or about 4% of premium revenue. "As such, we are on track to exceed our projected premium revenue for FY26," Vechte said.

Luke Maselink, senior actuary with the Office of the State Actuary, said the program is in a learning phase focused on data collection, comparing actual experience to assumptions and investing in an experience-study tool for Milliman’s analysis. He told commissioners the next full actuarial valuation is expected in late 2027 and will reflect a full year of benefit payments and any changes to the investment policy.

David Schumacher, government public affairs director for the State Investment Board, said the fund’s current allocation is almost entirely fixed income while SIB and agency staff finalize an asset allocation recommendation that would add equities when approved. "The fund is now up over $3,000,000,000," Schumacher said, noting the one-year return is about 8.25% and that SIB uses diversified bond benchmarks to judge performance. He said the transition to a mixed allocation will take several months once the Commission and governing entities approve the policy.

Commissioners discussed cash-flow management and reserves for near-term benefit payments. Agency staff said they will withhold amounts projected to be needed for near-term benefit and administrative expenses and send surplus funds to SIB for investment. Staff also emphasized conservative assumptions and cross-agency accounting work groups to monitor short-term risks and avoid relying on emergency general-fund support.