May 21, 2009

Peter R. Blum, Chairman
Robert Baus
Charles Casella
Claude Poulin
Steve Greatorex
Richard Cosgrove

Jeanne Kopek, Assistant Director, Retirement Services Division
Rebecca Sielman, Milliman

The meeting began at about 10:30 a.m.

Becky Sielman appeared to present the draft results of the Probate Judges and Employees Retirement System (PJERS) actuarial valuation. Becky began by explaining that the draft valuation had been done using the changes discussed initially in a telephone conference call on March 4, 2009 then in further detail at the Subcommittee's March 19, 2009 meeting. The changes were to use revised assumptions, the projected unit credit funding method and retain the 20 year amortization period for the 2008 valuation.

Becky explained that the PJERS population had remained virtually unchanged from the prior year. Average compensation increased less than the assumption and there was a big drop in the market value of plan assets. There was a loss in the value of system assets but the loss is recognized over 5 years with a 20 year corridor in place. Becky advised that there are no system liabilities for comparison with this year since this is the first year of calculating the actuarial liability with the new cost method; last year GASB 25 required a Schedule of Funding Progress under the old funding method. The accrued liabilities reflect a drop in the funding ratio. The development of the employer contribution was done using the exact same process as with SERS. Becky stated that there will be major changes to the contribution requirement especially if the proposal to consolidate the Probate Courts goes through the legislature.

The effect on PJERS of the proposed legislative changes to the Probate Court System was discussed. Becky advised that when the legislation passes we will need to evaluate the cost. The Subcommittee requested that Milliman provide language for a letter to the Probate Administrator alerting him to the possible consequences of probate court consolidation on future funding levels. The Subcommittee unanimously recommended that Milliman prepare the final PJERS valuation for presentation to the Commission at its June 18, 2009 meeting.

The meeting adjourned at about 11:15 a.m.

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