SDCERS Board Decision on Experience Study and Associated Actuarial Assumptions

Date: Sep 09, 2016

 

At its September 9th meeting, the SDCERS Board of Administration discussed an experience study from the system’s actuary that covered revised economic and demographic assumptions, associated cost implications, and funding alternatives. The Board voted to accept the findings of the experience study and the actuarial assumption recommendations of the actuary. A second and separate Board vote to modify the system’s current funding methodology and to smooth the volatility of future pension contributions did not pass; the vote was 6-4 and a majority of 7 votes was required for the proposal to pass.

The actual cost impact of the revised assumptions to the plan sponsors (the City of San Diego, the San Diego Unified Port District and San Diego County Regional Airport Authority) and employees will not be known until the 2016 actuarial valuation report is completed and presented in January 2017. However, as discussed in the experience study, the combination of low investment returns over the past two years and demographic assumption changes will result in increased costs to the plan sponsors and active City of San Diego members.  Preliminary estimates of the impact of lower than expected investment returns and new actuarial assumptions are that active City member pension contributions may have an increase between 0.8% and 1.0% beginning July 2017.

To view the Cheiron experience study, click here.




Document Under Categories: Actuarial Valuations, Board, Contribution Rates, News Articles, Press Release

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