Brenda Halpin, Director, Retirement Services Division
Lee Ann Palladino, Chief Investment Officer, State Treasurer's Office
Gregory Franklin, State Treasurer's Office
Kishore Solanki, Assistant Director, Retirement Services Division
John Garrett, Cavanaugh Macdonald, Consulting LLC
Ed Koebel, Cavanaugh Macdonald, Consulting LLC
Joseph Centofanti, Cohn Reznick
Matt Rugens, Auditors' of Public Accounts
The meeting began at 2:00 p.m.
Discussion was held with regard to the scope of work for the MERS GASB 68 that will be completed by Cohn Reznick. A timetable was established and Mr. Poulin will take the lead in coordinating the efforts with the vendor. Three towns will be contacted for the documentation as required for this new requirement.
A second discussion was led by John Garrett regarding alternative actuarial methods that the Actuarial Subcommittee should consider with regards to the various retirement plans. A PowerPoint presentation was provided with the specific topics. One choice is to consider using the same actuarial method for all plans. The discussion continued related to what the impact of the changes would be if all of the plans were standardized.
Change to entry age normal actuarial cost (page 5 of presentation). The presentation by CavMac compared the PUC to EAN in terms of UAAL, Funded Ratio and estimated contribution rate for the current period. Lee Ann Palladino asked what path the UAAL, Funded Ratio and estimated contribution would take over time. Specifically, she specifically asked about the next five to ten year horizon. She stated it would be helpful to see this information in order to weigh in on any potential change from PUC to EAN. John Garrett said he would provide this information.
With regard to the analysis of smoothing methods (pages 7-13) Lee Ann Palladino stated that the Office of the Treasurer would like the SERC to consider the development of a funding policy that takes into consideration an unusually sharp increase or decrease in the market value in any one year citing the one that was experienced during the Great Recession. She suggested a policy that would dictate a longer smoothing period should the market value decline by a certain percentage, such as 20%, in any given horizon. This would help with sharp and volatile changes in funded ratios, contributions and other funding policy measures affected by major market disruptions. She said that declines in the market are often associated with difficult economic periods for the State and the policy would help to manage through these difficult periods.
The last agenda regarding actuarial option factors related to age discrimination was discussed. The Actuaries will provide a letter to the member that was questioning the option factors and the Division will be able to provide a document on the OSC website that will cover this topic for all interested parties.
The meeting was adjourned at approximately 3:30 p.m.
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