Agenda Packets - 2026/05/11 - Laserfiche WebLink

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PERA—PUBLIC EMPLOYEES POLICE AND FIRE FUND 2025 CHANGES IN ACTUARIAL ASSUMPTIONS • Assumed rates of salary increases were reduced slightly. • Assumed rates of retirement were adjusted,resulting in an overall increase in unreduced(full) retirements and an overall increase in reduced(early)retirements. • Assumed rates of withdrawal were modified;the new rates will increase predicted terminations, especially in the first few years of employment. • Assumed rates of disabled retirement were significantly increased, especially for ages over age 30. • Continued used of Pub-2010 Public Safety Mortality Table with rates adjusted to better fit observed experience. • Percent married assumption for female retirees lowered from 70.00 percent to 65.00 percent. • Minor changes were made to form of payment assumptions for retirees. • Minor changes were made to assumptions made with respect to missing participant data. • The combined service annuity load changed from 33.00 percent to 13.00 percent for vested, terminated members and from 2.00 percent to 38.00 percent for nonvested, terminated members. 2025 CHANGES IN PLAN PROVISIONS • The period of time needed for benefit recipients to receive their first benefit increase was reduced by one year(from 36 months to 24 months for a full increase). • The January 1, 2026 benefit increase changed from 1.00 percent to 3.00 percent; subsequent January 1 increases will be 1.00 percent. • The threshold to end the $9.0 million annual state aid contribution changed from the earlier of July 1,2048, or 90.00 percent funded for both PERA Police&Fire and MSRS State Patrol for three consecutive years to 100.00 percent funded for both PERA Police&Fire and MSRS State Patrol for three consecutive years (on an actuarial value of assets basis). • The threshold to end the additional$9.0 million annual state aid contribution changed from the earlier of July 1,2048, or 100.00 percent funded for a minimum of three consecutive years to 110.00 percent funded for a minimum of three consecutive years(on an actuarial value of assets basis). • An additional $17.7 million in direct state aid will be paid annually each October 1 beginning October 1,2025 through June 30, 2048. • Joint and survivor actuarial equivalent factors were updated to reflect changes in assumptions. 2024 CHANGES IN PLAN PROVISIONS • The state contribution of$9.0 million per year will continue until the earlier of 1) both the Police and Fire Plan and the State Patrol Retirement Fund attain 90.00 percent funded status for three consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution was previously due to expire after attaining a 90.00 percent funded status for one year. • The additional $9.0 million contribution will continue until the Police and Fire Plan is fully funded for a minimum of three consecutive years on an actuarial value of assets basis,or July 1, 2048,whichever is earlier. This contribution was previously due to expire upon attainment of fully funded status on an actuarial value of assets basis for one year(or July 1,2048 if earlier). 2023 CHANGES IN ACTUARIAL ASSUMPTIONS • The investment return assumption was changed from 6.50 percent to 7.00 percent. • The single discount rate changed from 5.40 percent to 7.00 percent. -72-