Teachers and State Employees Retirement Systems of North Carolina

Transcription

1 Teachers and State Emplyees Retirement Systems f Nrth Carlina Annual Required Cntributin (ARC) Prjectins fr State System January 21, 2016

2 Prjectins f Emplyer Cntributin Requirements and Funded Status Prjectins f emplyer cntributin requirements and funded status int the future can be helpful planning tls fr stakehlders. Prjectins f the actuarial valuatin are knwn as deterministic prjectins. Deterministic prjectins are based n ne scenari in the future. The fllwing prjectin ( Experience Study Prjectin ) is based n: December 31, 2014 valuatin results f TSERS, except that prpsed ecnmic and demgraphic assumptins have been reflected based n the experience study presented in Octber 2015 as mdified t reflect the latest mrtality prjectin scale (MP-2015) Valuatin interest rate and assumed asset return f 7.25% fr all years N cst-f-living adjustments granted Assumes future pay increases based n lng-term valuatin Assumes active headcunt will remain level in future years Fr cmparisn purpses, we have als included the Baseline Prjectin fr TSERS presented in Octber 2015 based n the December 31, 2014 valuatin results Des nt reflect prpsed experience study changes Valuatin interest rate and assumed asset return f 7.25% fr all years 1

3 Prjected Emplyer Required Cntributin Rates (Experience Study Prjectin) 12% FYE June 30 Funding Plicy Cntributin Rates (Actual Rate befre 2017) 11% 10% 9% 8% 7% 6% 5% 9.15% 9.15% 9.48% 9.40% 9.07% 8.82% 8.70% 8.47% 8.58% 8.31% 8.45% 8.22% 8.16% 8.09% 8.02% 7.95% 6.39% 6.00% Reflecting the prpsed experience study changes results in an initial increase in cntributins. Hwever, after 12-year amrtizatin is cmplete, cntributin rates are actually lwer under the prpsed experience study changes. 6.13% 5.80% 5.37% 5.28% 5.35% 5.12% 5.09% 5.20% 5.36% 5.47% 5.47% 5.52% 5.55% 4% 4.19% 4.39% 4.54% 3% Valuatin Prjectin Experience Study with MP

4 Prjected Funded Rati (Experience Study Prjectin) 102% December 31 Funded Rati 100% 98% 96% 95.6% 96.3% 96.9% 94.3% 97.5% 95.1% 98.0% 95.8% 98.6% 96.6% 99.1% 97.4% 99.7% 98.2% 100.2% 98.9% 100.6% 99.5% 100.7% 100.7% 100.7% 100.6% 99.9% 100.1% 100.3% 100.5% 100.7% 100.7% Reflecting the prpsed experience study changes decreases the funded status initially. Hwever, recvery t 100% is still prjected t ccur within 3 years f prjected full funding under the current assumptins % 94% 93.7% 92% Valuatin Prjectin Experience Study with MP

5 Alternate Prjectins f Emplyer Cntributin Requirements and Funded Status In additin t reflecting the demgraphic and ecnmic assumptins frm the prpsed experience study, we have perfrmed an alternative prjectin assuming a lwer rate f return fr calendar year Fr this prjectin, the assumed rate f return is 0.23% fr 2015 and then 7.25% fr all future years. 4

6 Prjected Emplyer Required Cntributin Rates (Assuming 0.23% return fr 2015) FYE June 30 Funding Plicy Cntributin Rates (Actual Rate befre 2017) 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 9.15% 9.15% 10.26% 11.00% 11.70% 12.40% 12.99% 12.71% 9.48% 9.40% 9.07% 8.47% 8.31% 8.22% 8.82% 8.70% 8.58% 8.45% 8.16% 8.09% 8.02% 7.95% 10.49% 6.39% 6.00% 10.07% 6.13% 5.80% 9.16% 5.37% Asset returns less than 7.25% create an actuarial lss which is phased in ver five years using an asset smthing methd. This creates a pattern f steadily increasing cntributin requirements relative t the baseline prjectins. 8.93% 8.85% 8.83% 5.28% 5.35% 5.47% 5.12% 5.09% 5.20% 6.81% 6.14% 5.36% 5.47% 5.52% 5.55% 4% 4.19% 4.39% 4.54% 3% Valuatin Prjectin Experience Study with MP-2015 Experience Study with MP-2015 (0.23% return in 2015) 5

7 Prjected Funded Rati (Assuming 0.23% return fr 2015) 102% December 31 Funded Rati 100% 98% 96% 94% 92% 95.6% 96.3% 93.7% 92.4% 96.9% 94.3% 91.5% 97.5% 95.1% 98.0% 95.8% 98.6% 96.6% 99.1% 97.4% 91.3% 99.7% 98.2% 92.6% 100.2% 98.9% 94.0% 100.6% 99.5% 95.2% 100.7% 100.7% 100.7% 100.6% 99.9% 96.2% 100.1% 97.1% 100.3% 97.9% 100.5% 98.7% 99.5% 100.7% 100.7% The asset lss created by return f 0.23% in 2015 is recgnized ver the next five years under the current asset smthing methd % 90.7% 90% 90.3% 90.1% Valuatin Prjectin Experience Study with MP-2015 Experience Study with MP-2015 (0.23% return in 2015) 6

8 Certificatin These results were prepared under the directin f Larry Langer and Michael Ribble wh meet the Qualificatin Standards f the American Academy f Actuaries t render the actuarial pinins cntained herein. These results have been prepared in accrdance with all applicable Actuarial Standards f Practice, and we are available t answer questins abut them. Future actuarial measurements may differ significantly frm current measurements due t plan experience differing frm that anticipated by the ecnmic and demgraphic assumptins, increases r decreases expected as part f the natural peratin f the methdlgy used fr these measurements, and changes in plan prvisins r applicable law. Except where therwise indicated, an analysis f the ptential range f such future differences is beynd the scpe f this reprt. Larry Langer, FCA, ASA, EA, MAAA Principal, Cnsulting Actuary Michael Ribble, FSA, EA, MAAA Principal, Cnsulting Actuary 7

9 Questins? THANK YOU 8