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Actuary tells Brentwood board pension plan is over 100% funded but still reliant on strong investment returns
Summary
An actuary reported the City of Brentwood police and firefighters pension plan improved its funded status after strong investment returns but cautioned the plan remains dependent on a 7% expected return; the board heard details and asked questions but took no action.
The Brentwood Board of Aldermen heard an informational presentation March 2 from AJ Stoll of Econ Benefits on the annual actuarial valuation for the city’s police and firefighters pension plan.
"The market value of assets returned 12.33% for the year ending 12/31/2025," Stoll said, noting the actuarial model assumes a 7% annual investment return and that recent outperformance improved the plan’s funded position. Stoll told the board the plan’s present-value measure improved from about 109% to about 113% on that basis and that the plan shows an overfunded position of roughly $770,000 as of Dec. 31, 2025.
Stoll reviewed multiple funded-status measures, explaining each captures different elements of liabilities and future compensation. He emphasized the plan’s health depends on continued investment returns: "Anytime that you see outperformance of that 7%, you're going to see funded status improvement... and anytime you have investment performance below 7%, you'll see deterioration in the funded status." He also walked through a low-discount-rate sensitivity (the LDROM) required by actuarial standards, saying that using a 4.44% discount rate would reduce the plan’s funded status to roughly 75% on that measure.
The presentation included several quantitative details: the valuation lists 54 active participants, 54 retired participants and five terminated vested participants; the report shows expected cash contributions for the 2026 plan year totaling $1,690,000; Stoll said about $312,000 of that is employee contributions. The transcript contains inconsistent wording where the city actuary’s description of the employer portion is not clearly stated; the employer share is not unambiguously recorded in the meeting transcript.
During questions, aldermen pressed on the meaning of a funded-status ratio above 100% and the salary-appreciation assumption. Stoll said a ratio above 100% is a positive sign but not the only measure of plan health and described the 4.5% salary-appreciation figure as a career assumption that can be modeled and adjusted. He also noted the plan’s recommended contribution is composed of a normal cost and an amortization component and that the plan flipped from an unfunded to an overfunded actuarial position between 2025 and 2026 because investment returns outperformed the 7% assumption.
The presentation was for information only and required no board action. Stoll closed by reiterating that although the plan is in a healthy position on several measures, maintaining the funding trajectory requires continued contributions and investment performance in line with expectations.
The actuarial valuation discussion began with the city administrator’s presentation and continued through board questions; no ordinance or formal action was taken on the valuation itself.
