Montgomery County retirement fund posts strong quarter; funded ratio rises to 80.2% as board discusses COLA timing

The Montgomery County Retirement Board on July 16, 2026 received reports showing a rebound in investment performance and an improved funded ratio, but members deferred any decision on a retiree cost‑of‑living adjustment (COLA) until fall data arrive.

Cathy, a presenter from SCI, told the board the fund’s market value was “back up to $801,000,000 with a quarterly return of over 8%,” lifting year‑to‑date performance to roughly 7.15%. She said recent gains were led by semiconductors and AI‑related spending but warned the market shows concentration risk in a few names in emerging markets.

Michael Svero, an actuary with GRS, presented the 2026 actuarial valuation and summarized the main budget components. He said the amortization payment (to reduce the unfunded liability) is $22,300,000 and the normal cost is about $19,800,000, offset by approximately $11,000,000 in member contributions, producing a net contribution near $31,000,000. Svero reported the plan’s funded ratio at 80.2%, up from 76.9% in the previous valuation.

The valuation methods include a five‑year asset‑smoothing approach that spreads gains and losses over time, and the actuaries noted that the 2022 loss base will drop off next year, which should help stabilize contributions.

Board members asked detailed questions about demographics and cash flow. Presenters explained that annual benefit payouts shown in the report (about $49,000,000) reflect current beneficiaries; based on the data discussed the plan had been paying out roughly $4–5 million more than it received in contributions during the referenced period.

The board also discussed Act 96’s COLA schedule. As explained by the presenters, the statute ties allowable COLA percentages to funded status; the actuaries said a 5% COLA would add about $20,000,000 to plan liabilities and, if amortized over five years as the statute allows, would increase the annual contribution by roughly $5,000,000 — bringing the net contribution estimate to about $36,000,000. The board was advised the exact COLA figure depends on the August‑to‑August CPI release (scheduled for Sept. 11) and on 9/30 asset values, which the actuaries expect to receive in mid‑October.

Procedurally, the chair moved to approve the April 23, 2026 meeting minutes; the motion was seconded and the board recorded the motion as carried on recorded “ayes.” The chair later moved to adjourn; the motion was seconded by Treasurer Salas and the meeting adjourned.

The actuaries and investment presenters offered to return with updated numbers after the September CPI release and the 9/30 asset reconciliation so the board can make a fully informed decision on any COLA.