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Wednesday, October 18, 2017

Notes from the Oct. 13 PRB Actuarial Committee Meeting

TEXPERS Staff Report

Here are a few note from the the Actuarial Committee Meeting of the Pension Review Board held Oct. 13 in Austin:
  • Board chair Josh McGee asserted to Fort Worth officials that the legacy costs involved in maintaining a system while enrolling new employees in the Texas Municipal Retirement System were "accounting problems" and not real. Committee member and PRB board vice chair Keith Brainard disputed that, as did TEXPERS' board member David Stacy at the end of the meeting. Of course McGee has written in past that legacy costs are not concerns and therefore fail as a reason not to convert defined benefit plans to defined contribution plans.
  • McGee asked PRB staff to add a 10th actuarial review test – the 10-year actual investment return of systems versus their discount rate. Brainard disputed the value of this test and committee member Robert May supported Brainard. The matter is tabled for now. McGee positioned the additional metric as possibly offering a red flag, saying, roughly, that if a pension system hasn’t been successful meeting its discount rate in the last 10 years there’s little reason to believe that it will do so going forward. Discussions about market anomalies ensued.
  • The Texas legislature authorized PRB staff to spend $90,000 on creating an online pension dashboard, which staff has started. Stacy and Julie Higgins of the Houston Firefighters' Relief and Retirement Fund expressed concern regarding comparisons of systems that pay Social Security and those that don’t. Also, plan size was discussed.  


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