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Board adopts new actuarial assumptions for judges and legislators; small near‑term cost impacts for JRS2
Summary
The board adopted updated actuarial assumptions for the judges and legislators retirement systems. Staff estimated a modest increase in JRS2 employer normal cost (about 0.78 percentage points of payroll), an accrued liability increase of roughly $63 million for JRS2, and a $2 million increase to the LRS accrued liability.
Actuarial staff presented the second reading of proposed actuarial assumptions for the judges and legislators systems and the board approved the recommendations. The second reading stressed that key macro assumptions (price inflation and mortality) align with the PERS assumptions already adopted for the main system; only a small set of assumptions affecting JRS2 (service retirement and termination/withdrawal rates) were recommended for change.
Chris Schneider of the actuarial office explained that these assumptions do not change the underlying long‑term cost of promised benefits but will affect reported liabilities, funded ratios and the near‑term required contributions reported under GASB. For JRS2 staff estimated an increase in the employer normal cost of about 0.78% of payroll (less than one percentage point) and an increase in accrued liability of about $63 million (a funded ratio reduction of about 2.5%). LRS saw a $2 million increase in accrued liability (a 2.2% funded ratio decline). JRS (a pay‑as‑you‑go closed system) is not materially affected for contribution funding because it is not prefunded.
The board moved to adopt the assumptions, with implementation rules for service‑purchase applications and retirement option calculations effective for applications postmarked or retirement dates on or after June 18, 2026.
Why it matters: Actuarial assumptions underpin liability estimates and reporting that feed employer contribution discussions and fiscal planning. The updates are modest and rooted in the same framework used for the main PERS valuation; they nonetheless change near‑term reporting metrics used by employers and plan administrators.
Next steps: The actuarial office will apply the adopted assumptions in upcoming valuations and update service‑purchase and benefit‑factor systems consistent with the effective dates described to minimize disruptions for members and employers.
