►
From YouTube: Public Pension Oversight Board (11-15-22)
Description
No description was provided for this meeting.
If this is YOUR meeting, an easy way to fix this is to add a description to your video, wherever mtngs.io found it (probably YouTube).
A
C
B
A
Here
and
for
the
record,
I
do
have
a
signed
proxy
for
monitor
Harmon
for
his
chief
staff,
Sarah
Beth
Gregory,
to
serve
on
his
behalf
today.
Yes,
sir.
D
A
A
Have
motion.
Is
there
a
second
I
have
second
Senator
Parrott
any
discussion?
If
not
all
those
in
favor,
please
say
aye
any
pose.
No.
The
motion
carries
today
in
November.
We're
going
to
be
hearing
from
all
three
systems
and
I
see
bo
wanted
to
make
sure
I
didn't
go
in
reverse
order,
so
he
got
to
the
table
early,
so
we're
going
to
get
an
Actuarial
evaluation
update
from
all
three
systems.
Today
and
and
first
we
had
bo
Craycraft
from
the
judicial
Forum
Retirement
Systems.
E
Good
afternoon
my
name
is
Beau
Craycraft
and
I
am
the
executive
director
of
the
judicial
Forum
retirement
system.
It's
good
to
be
here
this
afternoon
and
I
do
appreciate
your
time
and
the
opportunity
to
present
I
was
asked
this
morning,
as
representative
Tipton
just
said,
to
provide
a
short
Actuarial
update
and
so
I've
prepared
a
few
slides
and
also
have
a
few
comments.
I
just
wanted
to
open
up,
though,
and
again
my
comments
by
pointing
out
a
little
something
unique
about
our
results
and
just
to
kind
of
set
the
table
so
to
speak.
E
Our
presentation
and
the
data
that
you're
going
to
see
is,
is
quite
a
bit
different
from
what
the
other
two
plans
are
going
to
present
and
it's
it's
calculated
in
a
different
method
and
it's
used
for
a
different
purpose,
and
so
it's
it
makes
comparison
a
little
different,
difficult
and
so
I
just
wanted
to
set
that
table
set
that
to
start.
E
This
relates
to
back
to
2013
when
Gatsby
on
the
government,
Accounting
Standards
Board
created
some
new
requirements
with
regards
to
the
Actuarial
evaluation
and
in
doing
so
beginning
with
the
fiscal
year
that
ended
in
2014.
We
now
have
this
situation
where
we
get
two
funding
valuation
results.
We
get
a
funding
number
that
is
used
for
the
purpose
of
employer
contributions
and
determines
what
we
affectionately,
call
Arc
or
a
deck.
E
But
then
there's
this
other
separate
number
that
is
calculated
for
gasby
purposes,
which
is
used
primarily
for
accounting
and
annual
Financial
reports,
and
so
for
our
larger
plans
like
TRS
and
kppa.
They
do
what
I
call
a
full
Actuarial
evaluation
that
produces
both
of
those
numbers.
But
in
the
case
of
our
smaller
plan
we
do
a
full
Actuarial
evaluation
that
includes
funding
data
every
other
year
in
line
with
the
budget
process.
So
our
most
recent
funding
evaluation
was
present
was
done
as
of
July
1
2021.
E
That
valuation
was
the
basis
for
the
budget
request
that
was
submitted
during
the
most
recent
General,
a
regular
session
of
the
general
assembly,
and
so
I
say
all
that
just
to
say
that
up
front
our
numbers
this
morning
are
for
gasby
purposes
only
so
they
don't
have
any
impact
on
the
employer
contribution
or
any
budget
impact.
We
will
do
that
in
2023
flat.
Two
just
summarizes
that
I'm,
just
exactly
what
I
said,
one
of
the
things
you'll
note
about
the
gasby
valuation
processes,
it's
it's.
E
We
also
do
what
is
called
a
roll
forward
in
these
odd
number
of
years,
so
they
take
the
data
and
the
assumptions
from
our
funding
valuation.
They
roll
that
forward
one
year
based
on
the
projections
and
then
that
gets
us
a
kind
of
a
revised
liability
and
then
for
gasby
purposes.
The
primary
difference
is
that
the
liability
is
then
compared
to
actual
market
value
of
the
plan.
Rel
versus
on
a
funding
valuation.
E
We're
using
a
smooth
approach
or
gains
from
any
one
year
are
recognized
over
a
period
of
time
generally
five
years
and
in
our
state
all
the
plans
recognize
smooth
over
five
years.
So
the
result
is
that
you
can
get
a
little
bit.
You
know
you
can
get
different
numbers
historically
for
our
plan.
Our
Gatsby
numbers
have
been
higher
than
our
funding
numbers,
mostly
due
to
the
fact
that
we've
been
able.
E
You
know
the
markets
have
been
going
up
up
until
this
most
recent
fiscal
year,
so
our
market
value
on
an
actual
basis
was
higher
than
the
smooth
value.
That
may
not
be
the
case
depending
on
what
the
future
brings,
but
historically,
that
has
been
the
case,
so
I
go
through
all
that
up
front
just
to
say,
as
we
look
at
slide
three
and
we
look
at
the
funding
ratios
again,
these
are
gasby
related.
E
All
of
our
funding
are
all
four
of
the
plans
both
on
the
pension
and
health
retiree
Health
side
from
a
gasby
purpose
remain
funded,
but
the
ratios
did
decline
as
expected.
Given
the
roll
forward
methodology,
there
was
a
slight
change
in
the
liability.
However,
on
the
market
value
side
on
average,
the
assets
of
the
plans
declined
12
percent
in
the
most
recent
fiscal
year,
and
so,
as
a
result,
the
funding
ratio
came
down
as
well.
E
Just
to
give
you
an
example
of
the
judicial
pension
was
that
from
a
Gatsby
perspective
was
at
118
and
it
dropped
to
103.
So
that
just
shows
you
kind
of
the
trend
again
just
just
to
make
sure
we're
clear.
That's
gasby
related,
and
then
you
know.
As
far
as
the
funding
valuation
is
concerned,
as
I
said,
we
will
do
a
full
funding
valuation.
As
of
the
close
of
this
fiscal
year
as
of
July
1
2023,
there's
going
to
be,
you
know,
there's
going
to
be
some
interesting
developments
there.
E
You
know,
we
don't
know
what
this
current
fiscal
year
is
going
to
look
like
my
expectation
is
you're
going
to
hear
today
that
you
know
fiscal
fiscal
year.
22
didn't
didn't
completely
offset
what
we
experienced
in
2021,
but
it,
but
it
partially
did
and
so
2020.
You
know
our
current
fiscal
year
could
be
kind
of
a
a
swing
year,
so
to
speak
on
whether
or
not
it
kind
of
overwhelms
that
nice
fiscal
year,
2021
return.
The
other
thing
that's
specific
to
our
plan.
E
Is
you
know
all
you
all
are
fully
aware
that
we're
in
election
year,
but
on
my
judicial
side,
all
but
three
of
my
members
were
up
for
re-election
and
I
have
a
large
slew
of
Judges
who
were
at
normal
retirement
both
on
eligibility
or
age,
and
so
we
have
a
tremendous.
As
of
last,
we're
about
15
percent
of
our
active
membership
is
retiring,
which
is
significant
for
our
plan,
so
I'm
interested
to
see
you
know
if
how
that
has
if
it
has
any
impact.
E
Of
course,
we
have
assumptions
and,
as
folks
get
closer
to
normal
retirement,
the
expectation
is
they
will
retire,
but
for
our
plan
it's
going
to
be
a
fairly
significant
moment,
we're
going
to
add
a
lot
to
the
retiree
payroll
relative
to
where
we're
at
today.
So
those
two
things
will
probably
have
an
impact,
and
we'll
probably
be
talking
about
those
things
this
time
next
year.
A
I
do
have
a
question
and,
and
you're
probably
going
to
tell
me
you
don't
know,
but
given
the
the
factors
we
don't
know
for
sure
about
the
what
the
returns
are
going
to
be,
how
the
impacts
are
all
the
retirements
are
going
to
be.
Do
you
foresee
that
the
funds
will
still
remain
at
100,
we're
looking
at
our
valuations
for
2023.
well,
for.
E
E
My
guess
is,
if
we
were
doing
it
today,
you
you
know
we
were
up
almost
40
percent
in
fiscal
year,
21
down
about
10
and
2022,
so
it
wouldn't
have
totally
offset
that
gain.
I
would
have
expected
some
improvement,
but
if
you
know
we
have
a
another
down
year
and
when
I
say
down,
I
mean
anything
below
six
and
a
half
right.
If
we
earn
zero,
it's
like
we
lost
6.5,
half
percent,
so
I
think
you
know
we're
based
on
the
current
year.
You
know
it.
E
A
E
A
Is
do
you
have
everything
to
the
actuary
for
the
upcoming
actuary
audit
or
are
they
waiting
on
anything
from
you
yet
I.
E
Think
we
have
fulfilled
all
of
their
requests.
We
had
a
couple
items
kind
of
outstanding,
but
I'm
pretty
sure
I
know
from
they
were
more
waiting
on
me
than
they
were
our
actuary.
A
Okay,
okay,
any
other
members
have
any
questions
for
both
co-chair
Higdon.
Thank.
F
You
thank
you
Bo.
Thank
you,
Mr
chairman,
a
lot
of
talk
about
ESG
and
proxy
voting
of
of
I'm
sure
you've
discussed
that
and
are
dealing
with
that.
Could
you
kind
of
give
us
an
update
on
that
yeah.
E
Proxy
voting
to
start
you
know
we
have
one
external
investment
manager
that
is
beared
trust
used
to
be
Hillyard
Lions.
They
handle
proxy
voting
for
us.
They
have
a
proxy
voting
policy
and
they
utilize
a
third
party
called
glass
Lewis.
They
are
not.
You
know
they
are
not
ESG
oriented
in
the
sense
that
they
do
not
screen
Investments
based
on
ESG
requirements.
E
They
are
long-term.
You
know
their
their
investment
strategy
is
to
be
long-term
business
owners,
and
so
they,
when
they
speak
about
ESG,
they
say
you
know
there
are
several
factors
that
they
they
share
in
common
right.
You
know
they
want
to
hold
long-term
businesses,
and
if
you
want
to
be
in
business
a
long
time,
then
you
got
to
be
a
good
corporate
citizen.
You
know
to
your
employees
and
to
the
communities
that
you
operate
in,
but
that
is
not
a
screen
that
they
perform
in
the
identification
of
you
know,
ideas
or
attractive
companies.
A
Okay,
see
no
more
additional
questions.
Both.
Thank
you
for
your
presentation.
The
next
item
on
our
agenda
is
a
presentation
from
the
Kentucky
public
pensions
Authority,
so
Dave.
If
your
crew
will
come
forward
and
I
understand
that
we
have
some
folks
in
person
today,
so
have
everybody
please
introduce
yourself
for
the
record
and
please
proceed.
G
G
It's
amazing
and
they've
been
after
me
for
the
last
year
to
be
able
to
get
here
because
there's
something
that's
lost
when
you're
not
on
the
screen.
As
you
know,
and.
G
They
are
a
valuable
asset
to
us
and
we
just
renewed
their
agreement.
Is
you
know,
sometime
I
had
just
a
couple
of
comments
on
that.
Really
it's
a
GRS
presentation,
but
they're
gonna
have
good
news.
We
had,
in
spite
of
the
poor
investment
markets
in
2022
those
those
declines
were
muted
by
the
smoothing
effect.
G
So
we
had
a
bad
Market
in
20
and
a
really
good
Market
in
21
and
a
bad
Market
22
and
the
smoothing
really
works
so
it
had
it
had
a
negative
impact,
but
not
it
was.
It
was
muted,
quite
a
bit
all
10
plans,
all
five
insurance
and
all
five
retirement
plans,
suspension
plans,
the
funding
status
increased
for
every
one
of
them,
in
spite
of
the
market.
The
and
thank
you
for
particularly
the
state
police
and
the
215
million
dollars
that
got
into
this
valuation.
You'll
see
the
effect
of
it.
G
It's
pretty
dramatic.
The
the
additional
two
contributions
of
200
appropriations
of
240
million
won't
be
take
effect
until
the
next
valuation
and
you're
going
to
see
a
dramatic
increase
in
the
funded
status
and
the
financial
health
of
the
insurance
plans.
We
don't
spend
much
time
talking
about
insurance,
but
they're.
Getting
to
be
big.
Grs
will
give
you
a
little
more
background,
but
it's
rare,
relatively
rare,
that
a
state
pre-fund
that's
mostly
pay
as
you
go.
G
We
don't
have
any
recent
data
on
funded
status,
but
if
you
look
at
some
data
back
from
2018
we're
we're
right
at
the
top,
so
we
are
like
one
of
the
best,
if
not
the
best,
funded
retirement
or
Insurance
systems
in
the
country.
So
with
that.
C
Thank
you.
The
results
of
this
valuation
valuations
are
performed
every
year,
this
one's
before
June
30
2022.
All
the
information
is,
as
of
that
date
for
the
CRS
plans,
which
will
will
highlight
some
information
on
the
CRS
board.
This
December,
we'll
adopt
the
valuations
that'll,
make
those
contribution
rates
effective
for
FY
2024
in
the
case
of
the
KRS
plans
and
the
state
police
plan.
That
is
part
of
the
two-year
budget
that
was
established
last
year,
so
think
of
all
valuation
results
for
the
k
plans
to
be
informational
purposes
it.
C
You
know
we're
going
to
show
what
the
change
in
the
calculated
contribution
requirement
is,
but
the
budget's
already
set
for
that
year
and
you'll
see
that
what's
actually
set
in
budget
is
more
favorable
than
than
those
actual
results.
If
we
go
through
on
the
slide
two
here
overview
legislation,
there
was
a
health
insurance
benefit
increases
for
certain
members
hired
after
July
123.
C
Senate
Bill
259,
some
additional
benefits
for
state
police
members
in
the
tier
three
cash
balance
plan.
That
was
it's
about
a
two
percent
of
pay
increase
across
all.
You
know
total
payroll
about
six
percent,
a
pay
increase
for
for
those
just
in
the
cash
balance
plan,
so
unused
sick
leave
in
excess
of
480
hours.
I
think
of
60
days
gets
converted
to
cash
balance,
pay
credit
to
each
year
and
then
any
unused
sick
leave.
Balance
at
retirement
gets
converted
to
a
cash
balance.
C
Credit
so
you're,
accelerating
the
pay
credits
in
the
cash
balance
plan,
as
Dave
alluded,
I
think
we
would
agree.
A
house
bill.
One
and
house
builds
604
were
extremely
beneficial
for
the
for
the
KRS
and
sbrs
systems.
House
Bill,
one
604
combined
provided
additional
funding
up
and
above
the
arc
additional
240
million.
C
So
that's
going
to
go
in
each
of
the
next
two
years,
so
it's
going
to
go
in
FY
this
year
and
FY
24
next
year,
House
Bill
1
also
provided
215
million
in
Appropriations
that
were
paid
in
the
last
quarter
of
FY
2022.
So
when
you
see
the
funded
ratio
go
from
30
percent
to
50
percent
for
the
retirement
plan
for
state
police,
that's
due
to
that
215
million
dollar
additional
appropriation.
C
If
we
go
to
the
next
slide
in
terms
of
investment
returns,
we've
all
seen
investment
markets,
and,
what's
in
the
news,
you
know,
there's
there's
five
insurance
plans,
five
retirement
plans,
different
assumptions,
but
think
of
about
a
negative
five
to
negative
six
percent
return
that
varied
in
terms
of
fund
assets
compared
to
the
expected
return.
There
was
about
2.6
2.7
billion
less
than
expected.
How
that,
compared
to
last
year,
in
FY,
2021
was
just
an
extraordinary
year.
C
There
was
about
3.4
billion
more
than
expected
in
FY
2021,
so
this
Offset,
you
know-
probably
a
good
80
percent
of
that,
but
but
there
still
is
a
net
gain.
That's
occurring
with
that
comments
on
the
valuation
results
on
the
retirement
funds.
When
we
measure
the
liability
we
determine
how
much
did
they
change
compared
to
what
we
expected?
There
was
an
880
million
dollar
loss
on
the
retirement
side.
That
was
primarily
due
to
the
two
non-hazardous
funds
in
our
valve
process.
C
We
we
identified
that
there's
a
group
of
retirees
current
retirees
that
are
getting
benefits
from
both
has
none
has,
and
we
need
to
pick
up
the
non-haz
portion
of
the
benefit
in
terms
of
the
liability
and
experience,
so
that
was
about
650
of
that
total
amount,
the
rest
being
salary
increases
for
individual
active
members
being
higher
than
expected.
The
other
thing
to
note
is
there
was
across
the
board,
eight
percent
increase
in
salary,
effective
July,
1
2022
for
state
employees,
so
that'll
be
reflected
in
next
year's
data.
C
The
big
news
on
the
Insurance
Fund
there
was
a
2.6
million
dollar
2.6
billion
dollar
gain
on
all
Insurance
funds
on
a
combined
basis,
and
that's
largely
due
to
the
premiums
charged
by
Humana
to
kppa
to
provide
post-65,
Health
Care
coverage
so
giving
a
specific
example,
you
think
of
the
the
Medicare
Advantage
of
the
Premium
plan,
which
about
90
percent
of
post
65
retirees
participate
in
what
Humana
charged
kppa
in
our
charges.
C
2022
for
that
coverage
is
about
227
a
month
and
in
2023
that
charge
will
go
to
a
about
89
a
month,
so
the
cost
of
providing
post,
65,
Health
Care
coverage
to
the
system
dollars
coming
out
of
the
trust
is
much
less
significantly
less.
You
know,
probably
about
a
factor
of
65
or
a
percent
or
so
and
that's
the
source
of
the
gain.
It's
not
just
the
gain
in
one
year
of
the
premiums,
but
it's
the
present
value
of
those
expected
or
anticipated
gains.
A
C
Been
a
common
question,
those
last
few
weeks
of
both
boards
in
here,
and
so
the
short
answer
is,
is
we
do
build
an
assumption
that
those
costs
will
go
up
in
the
future
years
and
we
actually
increase
that
assumption?
It's
called
medical
Trend
and
we
actually
increased
it
from
from
six
percent,
initially
to
nine
nine
percent
and
it
Trends
down
to
something
an
ultimate
rate.
However,
we'll
also
note
just
for
completeness
Humana
is
locked
in
those
a
cost
increase
of
no
more
than
five
percent,
all
else
being
equal
for
the
next
two
years.
C
C
You
comments
on
payroll
and
payroll
is
important
for
especially
the
the
has
KRS
has
and
state
police,
because
that's
your
source
of
revenue
for
collecting
contributions.
Think
of
it
as
even
though
your
contribution
rate
doesn't
change.
If
your
payroll
goes
up,
the
dollar
amount
of
the
funds
you're
getting
will
go
up,
and
so
we
made
particular
interest
on
that
for
the
Keras
non-haz
fund.
That's
no
longer
an
applicable
case
because
of
House
Bill
8
that
was
passed
during
the
2020
2021
legislative
session.
C
Thank
you
and
it
has
worked
very
much
as
anticipated
and
has
been
instrumental
in
stabilizing
the
the
funding
of
the
KRS
non-haz
fund
and
then
for
CRS
uses.
Notable
payroll
increases.
Some
of
that
increases
on
the
individual
member.
You
know
state
city
budgets,
County
budgets
being
favorable.
Also,
there
was
some
increase
in
in
membership
count,
which
will
also
increase
covered
payroll.
C
The
last
slide
this
side
of
we've-
we've
provided
many
years,
at
least
in
17,
since
we've
been
providing
services
to
kpba.
This
is
just
a
reminder
to
stakeholders,
while
there's
been
tremendous
effort
and
we
thank
the
additional
funding
for
the
KRS
non-haz
fund-
there's
still
more
to
be
done,
that
you
plan
assets
of
three
billion
and
you
can
see
the
cash
flow
amounts
below,
and
you
know
you're
you're
on
the
right
trajectory.
But
it's
it's
just
not
done
yet.
There's
continued
effort
remains
so.
H
As
as
Daniel
for
the
for
the
K
ERS
and
the
state
police
plans,
this
valuation
can
really
be
just
seen
as
informational,
the
so
the
2021
valuation
that
was
the
valuation
done
last
year
that
set
the
budget
for
both
this
fiscal
year,
so
fiscal
year,
2023
and
also
then
following
fiscal
year
so
fiscal
year,
2024.
so
the
contribution
rates
and
that
we
calculated
in
this
year's
valuation
just
kind
of
shows
you
where
we're
at
today.
H
If
we
weren't
on
bi-annual
funding,
so
you
can
see
those
contribution
rates
here,
the
contribution
rates
went
across
the
board,
went
down
across
the
board
and
the
main
driver
there
is
the
Insurance
Fund.
So
that's
the
decrease
in
the
medicare
premiums
that
Danny
alluded
to.
If
we
look
at
the
K
non-hazardous
fund,
we
can
see
a
decrease
there
again.
A
lot
of
that
is
due
to
the
Insurance
Fund.
On
that
amortization.
Cost
going
from
the
994
million
to
the
906
million
I
will
mention
that
we
do
have.
H
We
did
in
this
calculation
of
our
contribution
rate.
We
did
take
into
account
one
of
the
250
million
Appropriations.
We
do
have
another
one
of
those
coming
into
fiscal
year
2024.
So
when
we
come
back
and
we
do
this
valuation
again
next
year,
we
are
expecting
an
additional
20
million
reduction
in
that
amortization
cost
for
the
fiscal
year.
2024.
H
H
H
If
we
look
at
it
in
terms
of
dollar
amounts
again
in
terms
of
dollar
amounts,
the
con
the
required
contributions
would
have
gone
down
as
well.
If
we
didn't
have
the
biannual
funding,
I
will
say
one
thing:
I
will
note
on
the
state
police,
even
though
that
pension
contribution
rate
did
stay
pretty
level,
the
contribution
rate
as
a
dollar
amount
did
go
up,
and
that
is
because
we
saw
salary
go
up
for
the
State
Police
fund.
H
It's
a
little
bit
of
a
different
story
on
the
cers
funds
because
they
do
change
their
contribution
rates
each
year.
So
for
this
year's
valuation,
the
2022
valuation
that
is
going
to
set
the
contribution
rates
for
fiscal
year
2024..
So
again
a
little
bit
of
the
same
story.
We
saw
big
decreases
in
your
Insurance
Fund
contribution
rates,
which
is
the
main
driver
and
the
reduction
in
the
contribution
rates
that
we're
seeing
this
year.
H
If
we
look
at
it
in
terms
of
dollar
amounts,
a
reduction
in
terms
of
dollar
amounts
about
50
million
for
the
non-hazardous
funds,
17
million
for
the
Hazardous
fund.
But
you
can
see
on
the
pension
fund.
Those
dollar
amounts
are
actually
going
up
and
again
similar
to
the
state
police
fund.
That
is
because
of
the
increases
in
the
increases
in
the
payroll,
so
the
contribution
rates
went
down
for
the
pension
fund,
but
because
payroll
went
up,
we're
going
to
collect
more
money
in
terms
of
dollars.
H
Looking
at
the
unfunded
actual
accrued
liability
for
the
kers
and
the
state
police
plans,
the
unfunded
liability
went
down
across
the
board
for
both
the
Pension
funds
and
the
insurance
funds.
So
that's
great
news,
that's
what
we
want
to
see.
We
want
to
see
that
unfunded
liability
being
systematically
paid
off
year
over
year.
H
On
the
Syria
cers
funds,
the
on
the
Pension
funds
that
unfunded
the
unfunded
liability
did
go
up
a
bit
that
was
driven
by
the
higher
than
expected
liability,
but
on
the
insurance
funds,
again
significant
decreases
in
our
unfunded
liability
due
to
those
medicare
premiums.
H
And
I
won't
go
through
every
number
on
these
slides.
This
is
really
just
for
your
reference.
This
is
all
of
the
numbers
from
our
funding
results
for
the
kers
fund,
but
one
thing
I
do
want
to
point
out.
Is
those
numbers
right
down
there
at
the
bottom?
Is
the
funded
ratios,
as
Mr
eager
alluded
to
the
funded
ratios
for
all
of
our
funds?
H
Pension
Insurance,
all
10
of
those
funds
across
the
board
went
up
and
you'll
see,
especially
on
the
Insurance
Fund
you'll
see
those
are
actually
above
100
percent
for
the
majority
of
our
insurance
funds
this
year.
So
that's
pretty
significant
and
it's
significant
to
see
those
funded
ratios
going
up
across
the
board
again,
a
trend
that
we
really
want
to
see-
and
a
lot
of
that
is
really
towards-
is
really
attributed
to
the
funding
that
we're
seeing
going
into
these
funds.
The
full
funding
that
we're
seeing.
G
H
So
we
have
these
for
all
the
funds
state
police
again
the
Insurance
Fund
over
100,
funded
on
an
actual
basis.
Now,
but
again
that
funded
ratio
going
up
I
will
notice
you'll
see
on
the
pension
fund
a
big
spike
in
our
funded
ratio
there,
and
that
is
due
to
the
215
million
contribution
that
we
got
in
fiscal
year.
2022.
H
For
cers
again,
those
funded
ratios
going
up
with
those
Insurance
funds
over
100
funded,
so
I
will
pause
there
again
for
any
questions.
A
C
On
a
Statewide
basis,
it's
been
a
it's
been
a
March
downward
and
what
we're
going
to
do
is
like
we'll
follow
up
with
to
Mr
eager
a
slide
from
the
National
Association
of
State
Retirement
Systems.
That
show
that
how
that's
trended
down
the
now
you've
marched
when
you
take
it
in
2017,
when
you
made
the
change
to
or
when
kpba
made
change
to
five
and
a
quarter,
it
was
a
much
bigger
jump.
So
that
was
that's
the
biggest
jump
of
any
any
Statewide
system
in
the
country.
But
it's
been
a
March
down.
C
I
think
the
the
average
to
date
are
the
median
investment
return
has
been
it's
either
at
seven
or
just
just
a
tad
below
seven
seven
percent
right
now,
I've,
yet
in
the
last
10
years
to
see
a
system
increase
their
investment
return
assumption.
However,
that
said
I
think
in
2022.
You
might
see
that
and
the
the
reason
is
where's
your
starting
point
on
your
economics.
C
If
you
look
last
year
10-year
treasury
bonds
at
1.8,
you
know,
p
e
ratios
on
on
equities
were
high,
and
now
you
can
attend
your
treasuries
30-year
treasuries.
You
can
lock
in
for
4.2,
you
know
4.3,
depending
on
what
day.
It
is
that's
a
huge
you
know,
that's
a
huge
increase.
You
can
walk
in
your
when
you
buy
a
bond
you're
guaranteed.
You
return
on
that,
especially
a
treasury,
because
there's
no
default
risk
and
so
to
get
that
addict.
C
F
G
With
regard
to
ESG,
we
have
a
pretty
simple
statement
that
those
factors
the
EES
and
the
g
to
the
extent
they
affect
the
a
company's
Outlook
and
profitability.
We
would
factor
that
into
the
evaluation,
but
beyond
that,
we
don't
restrict
eliminate
any
Investments
on
an
ESG
basis,
the
with
regard
to
proxies
we're
in
a
process
of
going
out
to
the
all
of
our
managers.
It's
going
to
take
some
time
asking
them
to
adopt
our
proxy
policy
and
write
it
into
the
investment
management
agreement.
G
I,
don't
know
that
we'll
get
uniform
compliance
and
we
have
to
look
in
a
case-by-case
basis
where
we
don't,
but
but
by
and
large,
the
managers
use
isi
to
vote
to
practice
and
their
Isa
is
very
similar
to
our
own
proxy
policy.
So
not
I'm
not
concerned
about
it
at
the
moment,
but
we
do
want
to
comply.
J
Good
afternoon
Beau
Barnes
I
serve
as
Deputy
executive
secretary
and
as
general
counsel
for
the
teachers
retirement
system.
I've
been
asked
today
to
give
a
similar
presentation
on
the
recent
valuations
and
with
that
I
would
like
to
say
up
front.
You
know
these
final
evaluations
were
just
presented
to
our
government's
audit
committee
yesterday
afternoon
and
staff
have
really
not
had
much
time
to
go
over
these
valuations
and
as
a
normal
part
of
this,
the
process.
With
these
valuations,
we
always
have
questions
for
our
actuars.
J
We
always
want
to
get
more
background
about
the
calculations
and,
in
fact,
I
have
emailed
that
actually
already
a
lot
of
questions
that
I
have
about
the
vows
just
so
I
understand
it
better.
That
said,
that's
there
are
some
questions
you
may
have
today
that
I
am
unable
to
answer,
but
I
will
do
my
best
today.
Thank
you.
J
Okay,
first
key
happenings
since
the
beginning
of
this
year.
Well,
the
investment
returns
and,
of
course,
are
always
a
key
driver
in
what
your
funded
status
is
going
to
be,
and
we've
already
heard.
We
all
know
that
2022
fiscal
year
was
a
down
year
in
the
market.
In
comparison
with
the
previous
year,
which
was
a
30
percent
return,
this
year
we
had
a
negative
10.68
percent
gross
negative
10.89
percent
net
for
the
annuity
trust
which
pays
the
pensions.
The
insurance
trust
had
a
negative
4.3
percent
gross
negative
9.677
percent
net
return.
J
The
and
these
are
the
market
value
numbers
okay.
So
what
the
actuary
is
going
to
look
at
I
know
you've
heard
about
that.
The
actuaries
do
what
they
call
Actuarial
smoothing.
J
So,
instead
of
using
just
one
year's
return,
they
use
an
average
of
five
years
that
Smooths
the
returns,
and
we
have
a
slide
I
need
to
present
that
sometime,
but
it
shows
that
five-year
smoothing
a
line
that
shows
that
five-year
smoothing
the
impact
on
assets
versus
the
actual
Market,
the
actual
markets.
Like
this,
you
know
this
year's
down
last
year's
way
up,
but
the
five-year
smoothing
it
follows
the
volatility
of
the
market
very
well,
and
you
know
just
right
in
line
right
in
the
middle.
So
that's
why
we
do
it.
It
helps
with
budgeting.
J
J
Other
things,
another
big
thing
that
happened
and
we're
very
appreciative
of
the
general
assembly
for
for
the
460
minus
479
million
dollars
that
was
appropriated
to
pay
off
certain
past
benefit
adjustments
that
was
received
in
late
April.
That
was
a
very
good
time
to
receive
that
lump
sum
payment
and
we've
been
able
to
put
it
to
very,
very
good
use
when
the
market
was
down
and
buying
low,
which
is
what
we
always
want
to
do.
No
assumption
changes
for
the
year.
I
will
note.
J
We
did
have
course
have
new,
a
new
tier
take
effect,
January
1st
trs4,
you
know
a
completely
new
tier.
We
only
have
about
3
100
members
in
that
new
tier
so
far
and
they're,
mostly
part-time.
We
only
have
six
months
experience,
so
we
don't
really
have
anything
to
report
on
Tiaras
for
yet,
but
that
that
will
be
coming
in
future
years.
When
that
tier
starts
to
build
out-
and
it
will,
it
will
very
quickly
start
to
gain
more
and
more
members.
J
Okay,
here's
a
summary
of
the
valuations.
The
top
boxes
reflect
the
retirement
annuity.
Trust
in
the
bottom
boxes
reflect
the
health,
insurance
trust
and
we
are
comparing
on
the
left.
You'll
see
June
30th
2021.
It
was
June,
30th
2022,
so
starting
with
assets-
and
this
is
the
Actuarial
value
of
assets,
not
Market
fact.
The
actual
value
of
assets,
June
30th
21,
was
22.6
billion
dollars,
June
30th
2022,
24.1
billion
dollars,
liabilities,
June,
39.6
billion.
This
is
total
liabilities,
39.6
billion
dollars
and
21
increased
slightly
to
41
billion
and
22..
J
The
unfunded
ratio
decreased
very
slightly
from
those
two
years
from
17
billion
and
21
to
16.9
billion
in
2022
and
the
funded
ratio.
We
see
here
improved
from
57.2
percent
to
58.8
percent,
which
is
the
highest
it's
been
in
in
many
years,
so
good
news
there,
the
bottom
row
of
boxes,
health
insurance,
trust,
same
presentation.
We
see
assets,
Grew,
From,
2.1
billion
in
2021
to
2.4
billion
in
2022
liabilities,
also
Increase,
five,
three
slightly
from
3.5
billion
to
3.8
billion.
J
Cash
flow,
so
with
that
479
million
dollars
we
received
in
April
that
gave
us
a
hundred
and
forty
percent
of
the
actuary
determined
political
contribution
for
the
pension
okay,
because
of
that
payment
and
that
had
a
big
impact
on
negative
cash
flow,
as
you
might
assume
so.
Negative
cash
flow
for
2022
as
a
percentage
of
assets
was
a
1.19
Okay
negative
1.19
percent.
Compared
to
you
can
see
the
other
years
at
the
bottom
of
this
slide,
where
it's
like
around
three
and
a
half
percent
and
three
percent
range.
J
I
J
This
is
what
our
actuary
does
every
single
year.
They
look
at
gains
and
losses
over
what
they
projected
would
happen
with
certain
assumptions
and
what
actually
happened
again.
They
do
this
every
year
and
then
they
they
take
these
games
and
losses
and
they
amortize
them
over
a
20-year
period.
Now,
we've
had
about
as
many
gains
as
losses.
J
Since
we've
been
doing
this
for
eight
nine
years
now
we
have
slightly
more
losses
than
gains,
but
these
are
small
and
because
they
are
small
and
because
we
are
dealing
with
them
each
year
by
new
advertising
them
over
a
20-year
period.
We
are
dealing
with
them
so
that
they
will
not
have
a
Major
Impact.
You
know
on
the
main
funding
going
and
getting
us
to
full
funding
here
in
just
over
20
years.
So
you
see
here
investment
return.
J
It
was
a
gain
here
again
because
we're
using
the
Actuarial
investment
return
of
7.9
percent,
which
again
is
more
than
our
assumed
Ray
return
of
7.1
percent
salary
increases
is
a
loss
here.
What
that
means
is
individual
salaries
of
teachers
overall
were
greater
than
anticipated
for
this
year.
So
when
teachers
have
higher
salaries,
that
means
they're
used
for
retirement
calculation
purposes,
higher
salaries,
higher
higher
retirement
allowances,
that's
why,
when
the
salaries
are
higher,
that
means
we're
paying
out
more
in
benefits,
because
the
retirement
allowances
are
going
to
benefit,
and
that's
why
we
have.
J
These
others
are
not
quite
as
important
turnover
in
retirement.
We
had
a
few
more
retirements
and
a
few
turnovers
than
we
expected
mortality.
You
know
we
moved
to
a
very
conservative,
more
conservative
mortality
table,
that's
teacher
specific,
and
it
also
has
a
generational
approach
that
takes
the
Viewpoint
that
younger
active
members
are
going
to
live
longer
than
older,
active
members,
those
in
their
20s
or
just
those
in
their
50s
or
60s.
So
positive
experience
there
from
an
Actuarial
standpoint
new
entrance,
we
had
more
new
entrants
coming
in
than
anticipated.
J
They
carry
a
little
bit
of
liability.
You
know,
there's
some
liability
there,
because
they
may
have
reciprocity
service
with
kppa
there's
liability
there,
because
they
could
get
hit
by
a
you
know.
They
have
an
injury,
a
duty,
related
injury,
the
next
day
and
get
disability
or
death
life
insurance
and
death
benefits.
So
there's
some
liability
for
new
entrants
that
the
actuary
measures,
others
contributions
coming
in.
J
We
were
asked
to
compare
previous
years
with
current
and
projected
so
you'll
see
in
the
Top
Line
actual
2022,
682
million
dollars,
23
and
24,
and
this
is
just
for
pension-
it's
690
million
respectively
for
each
year,
just
for
the
pension-
and
this
is
a
preliminary
number
for
fiscal
year-
25,
based
on
the
evaluation
that
they
just
completed
for
for
2022..
You
see
an
805.7
million
dollar
preliminary
for
fiscal
year,
2025.
fiscal
year
2026
is
not
available
yet
because
there's
a
three-year
lag
fiscal
year.
J
26
will
be
available
this
time
next
year,
when
the
evaluation
for
fiscal
year
2023
is
completed,
health
insurance
we're
seeing
pretty
consistent.
You
know
71
million
in
2023
77
million
in
2024
and
projected
preliminary
77
million
in
2025.,
and
we
don't
have
20
to
26.
Yet
we're
going
to
be
when
we
get
closer
to
that
year.
J
Health
insurance
can
change
a
lot
for
a
lot
of
reasons.
You
know:
what's
the
kehp
premium
going
to
be,
you
know,
what's
going
to
happen
with
medical
inflation,
what's
going
to
happen
with
some
of
these
Federal
subsidies
and
programs
that
really
pay
the
bulk
of
the
cost
for
our
65
and
over
health
insurance?
Those
can
change
a
lot.
J
So
we
kind
of
wait
and
get
a
little
bit
closer
to
the
point
of
the
budget
request
when
we
have
better
numbers
to
present
to
the
general
assembly
and
then,
of
course,
for
2022,
you
will
see
that
479
million
dollars
that
was
appropriated
to
pay
off
some
previously
awarded
benefits,
which,
for
that
year,
140
funded
again
very
appreciative
of
those
funding.
It
came
at
a
very
good
time.
It
was
being
applied
very
well.
So
with
that
that
is
my
presentation.
J
The
things
I
was
asked
to
cover
today
be
happy
to
take
any
questions
about
my
presentation
or
anything
else.
Thank.
F
F
From
June
June
30
2022,
it
showed
them
24.1
billion.
Yes,
sir,
and
that
looks
like
that's
up
1.5
billion
from
the
year
before.
Yes,.
J
F
And
then
we'll
go
over
to
the
library
liabilities
39.6
last
year
in
41
billion
this
year,
and
it's
it's
that's
up
1.4,
so
they
kind
of
it's
kind
of
a
wash
there.
What's
your
assets
were
up,
but
so
were
your
liabilities.
Yeah.
J
So
that's
you
know
looking
at
that,
previous
page,
for
example,
games
lost
slide.
You
know
we're
going
to
have.
We
haven't
slightly
increase
in
liabilities,
slightly
very
slightly
greater
increase
in
in
assets.
So
that's
why
you
saw
just
a
very
marginal
decrease
in
the
unfunded
liability
from
17
to
16.9
billion.
But
overall
you
did
see
an
improvement
in
the
the
the
ratio
because
of
the
increase
in
assets.
F
Okay
and
I'm,
looking
at
the
of
course,
we
always
talk
about
negative
cash
flow
and,
and
on
those
last
years,
1.19
and
and
I
assume
that
the
money,
the
green
box
dollars
made
that
much
much
lower
than
because
it's
been.
It's
been
going
up.
A
little
bit
looked
like
almost
every
year,
well,
3.63
and
18,
and
3.68
and
20
3.85
and
21..
What
would
have
been?
What
would
the
percentage
of
being
without
the
green
box
dollars?
The.
J
F
Over
on
the
the
next
page,
what
the
smoothing
looks
like
it
it
by
doing
the
five
year,
smoothing
gains
were
178
million.
Is
that
am
I?
Reading
that
right,
investment
return?
That's.
J
F
And
what
would
that
have
been
I
think
it
was
about
a
billion
dollars
last
year
when
it
was
smooth
I
guess
that's
the
difference
in
the
in
the
the
loss,
the
losses
that
we
had,
how
many,
how
many
years
out
of
that
five
years,
that
you're
smoothing
do
we
have
losses.
J
F
Okay
and
one
other
question:
Mr
chairman
I
notice
on
the
24-26
budget
request
we
go
from
this
past
year,
23
and
24
budget
request
of
690
million,
and
it
jumps
up
to
805
million
dollars
and
for
25
and
and
you
don't
have
26
on
there.
Yet
that's
it
looks
like
it's
been
run
along
fairly
consistently
and
then
all
of
a
sudden
we
take
a
a
pretty
good
jump.
Is
there
what's
the
main
reason
on
that,
but.
J
That
that's
one
of
the
questions
that
I
have
pending
with
our
actuary
right
now.
I
have
a
list
of
questions,
and
this
is
as
normal
when
we
get
these
valuations,
that
staff
always
have
a
lot
of
questions.
We
want
to
make
sure
we
understand
so
we
know
and
that
we
can
explain.
You
know
to
other
stakeholders
in
the
public.
You
know
what
these
numbers
mean
and
fully
understand
them.
A
Chairman
Miller
has
a
question.
Thank.
I
You
I,
as
it
turns
out
I'm,
going
to
be
following
Right
Along
on
chairman
Higdon's
line
of
thinking,
and
that
is
I
would
say.
Part
of
that
jump
is
going
to
be
the
drop
in
your
assumed
rate
of
return.
Would
you
not
agree
with.
J
We
we
recognize
the
full
drop
and
the
raid
return
and
the
secondary
thing
was
the
change
in
mortality
tables.
Those
revolved
very
big.
The
change
in
mortality
table
is
a
one-time
thing
going
to
teacher-specific
mortality
table
those
who
both
had
a
big
impact,
and
we
recognized
those
immediately
for
purposes
of
the
valuation.
The
funded
status
that
I
just
reported
to
you
unfunded
liability.
All
of
that,
but
as
far
as
budgetary
budgetary
item,
because
we
had
that.
F
J
Gain
in
2021,
you
know
the
30
percent
return,
the
over
five
billion
dollars
in
additional
you
know,
increase
in
value
of
the
pension
are
actuary,
recommend
that
we
could
phase
in
Harvest
those
games
sort
of
by
phasing
in
that
reduced
assumptions
on
future
returns
and
on
mortality
at
1.7
percent
per
year
over
five
years.
So
that's
linear,
you
know
as
its
impact
on
the
co
on
the
funding
that
we're
asking
for
in
the
budget
it's
at
1.7
per
year
growth.
It
is
somewhat
incremental.
J
I
The
and
lastly,
on
the
could
you
do
you
know
off
top
of
your
head,
or
do
you
have
it
with
you?
What's
the
trend
line
over
the
last
four
or
five
years
in
terms
of
membership
in
the
total
members
of
TRS?
Is
it
declining
continually
it's
it's.
J
It's
been
pretty
steadfast,
you
know,
covid
those
two
years
changed
everything
and
we
don't.
They
don't
provide
good
data,
because
that
was
an
outlier,
but
you
know
slightly
increasing
but
pretty
steady
around
75
000
we're
not
seeing
a
decrease
a.
J
In
terms
of
active,
yes
about
75
000,
full-time
part-time
members,
it's
kind
of
held
around
that
okay
number
for
a
while
now
all
right.
Thank
you
both!
Yes,
sir.
F
Thank
you,
Mr
chairman
and
Bo
I,
just
remembered
a
conversation
we
had
about
this
time
last
year.
That
I
want
to
change
those
assumptions
our
our
great
year
last
year
and
the
market
was
going.
We
were
it
would,
it
would
all
set
those
gains
or
those
assumption
changes,
but
how
how
time
does
change
things.
J
Yes,
I,
we
we
will
still
have
because
2021
was
such
an
exceptional
year
and
we
did
have
such
gains
for
that.
C
J
Still
have
gains
from
that
year,
despite
the
negative
10
year
we
just
had
so
if
it's
and
and
with
those
gains
and
with
the
full
funding
we're
getting
now
and
with
the
479
million
dollars,
you
know
we're
in
a
constant
process
of
selling
high
and
buying
low.
So
when
the
market
was
really
hot
over
the
last
part
of
2021
well
before
that,
even
into
early
2022,
before
the
market
declines,
investment
staff,
we
so
two
and
a
half
billion
dollars
worth
of
Investments
we
sold.
J
For
example,
you
know
stocks
that
were
running
really
hot,
really
high,
and
we
took
that
two
and
a
half
billion
dollars
put
a
lot
of
it
in
cash
bonds,
those
sort
of
things
and
when
the
market
declined
not,
we
were
able
to
put
that
back
to
work
in
every
asset
class
when
they
were
selling
lower
and
take
advantage
of
the
down
Market.
A
Thank
you,
Mr
chairman
Beau
I
appreciate
the
2426
budget
requests
as
I
recall,
chairman
McDaniel,
inquired
about
that
last
month,
the
the
805
million.
Now
that
does
not
include
the
statutory
contribution.
This
is
just.
This
is
just.
I
J
There's
additionally,
KDE
makes
a
request
for
the
Sikh
formula
for
the
fixed
statutory
that
you're
talking
about
and.
A
Do
your
actuaries
have
any
projections
or
on
what
these
contribution
levels
will
have
to
be
in
the
next
five
to
ten
years.
J
J
We're
on
we
are
looking
at
payroll
growth
of
2.75
a
year
is
what
the
assumption
is,
so
we
would
expect
the
growth
and
budget
requests
from
the
seek
formula
to
grow.
At
that
rate,.
A
On
your
gain
loss
analysis
on
the
salary
increase
is
causing
an
Actuarial
loss
of
285.9.
To
understand
you
is
that,
due
to
increases
in
salary,
that's.
J
A
J
A
Slide,
if
you
could
get
that
information
for
us,
it
would
be
greatly
appreciated
and
I
know.
Sandra
Higdon
and
the
other
two
presentation
talked
about.
How
is
TRS
approaching
this
issue
of
ESG
investing
and
proxy
voting?
Could
you
just
give
us
an
update
on
where
you
all
are
if
that
situation
right
now?
Yes,.
J
I'd
be
glad
to
so
again.
J
In
fact,
we
have
a
trusty
Workshop
coming
up,
and
every
year
we
have
a
trustee's
trustee
Workshop
I,
give
a
presentation
on
ethics
and
fiduciary
responsibility,
and
then
what
we
start
out
with
every
year
is
that
every
member
of
our
board
and
staff
are
fiduciaries
and
that's
not
just
a
noun.
It
is
a
word
that
has
real
legal
consequences.
It's
a
word,
that's
been
subject
of
court
cases
or
there
have
been
consequences
for
individuals
who
are
not
fiduciaries.
J
Acting
as
fiduciaries
and
being
a
fiduciary
means
you
have
one
go
only
you
are
serving
in
the
best
interest
of
the
people.
You
were
acting
fiduciary
for
so
and
for
investing.
What
that
means
is
that,
as
fiduciaries
board
member
staff,
we
are
investing
for
the
best
value
for
our
members
within
acceptable
levels
of
risk.
So
it's
both
best
value,
acceptable
levels
of
risk.
Trs
is
not
an
ESG
investor.
We've
been
asked
throughout
the
years
again,
I've
been
there
for,
since
99
periodically
yet
requested
to
invest
in
a
certain
way
for
certain
causes.
J
You
know
whether
it's
the
Sudan
Firearms
tobacco
that
happens
often,
and
we
tell
them
that
you
know
we
fiduciaries.
We
only
invest
for
value
and
that's
in
our
policy
and
it's
also
with
our
proxy
voting.
We
use
international
or
institutional
shareholder
services
and
part
of
our
grant
with
them.
You
know
that's
the
same
way.
They
vote
like
we
vote
our
proxies,
but
they
understand
you
know.
J
We
expect
recommendations
and
evaluations
from
them
on
proxy
votes
to
be
consistent
with
our
road
fiduciaries
and
that
is
enhancing
and
protecting
shareholder
value
and
that's
what
we
do.
I
will
say
that
most
these
proxy
votes
that
we
get,
that
we
review
our
staff
review
and
then
send
back
to
ISS
to
vote.
We
tell
them,
you
know
most
of
the
recommendations
that
we
see
I,
think
probably
all
of
them
have
been
consistent
with
our
fiduciary
responsibility,
but
most
of
them
are
are
more
run
a
mill.
J
You
know
it
could
like
appointing
new
trustees
to
the
board.
You
know
that's
a
proxy
vote,
selecting
an
auditor
to
audit
the
company,
that's
a
proxy
vote
and
you
know
mergers
and
Acquisitions.
You
know
that's
a
proxy
vote.
So
that's
largely
what
you
see,
but
certainly
we
expect
and
we
every
vote
that
we
cast.
We
want
to
be
for
shareholder
value.
A
Any
other
member
have
a
question
for
Beau
at
this
time.
Well,
I
appreciate
your
presentation
before
we
adjourn
I
want
to
invite
to
remind
the
members
of
ppob
and
also
any
member
of
the
general
assembly
who
is
listening
and
leader.
There
I
appreciate
your
comments
last
month
that
we
need
to.
A
We
were
asking
that
if
you
have
legislation,
that's
dealing
with
pensions
or
retirement
system
to
present
that
to
ppob
during
the
months
of
December
in
January,
for
us
to
go
through
that
review,
that
legislation
and
vet
that
with
you
I,
anticipate
that
we
will
have
a
couple
of
pieces
of
legislation
in
December.
So
if
anybody
else
has
to
has
something
you
want
to
present,
please
contact
myself,
co-chair
Higdon
or
a
member
of
Staff,
yes
leaders
there
thank.
D
You
Mr
chairman
for
that
reminder
to
anyone
who's
thinking
about
running
legislation
to
be
clear
in
the
Senate,
any
pension
related
legislation
will
go
through
the
state,
gov
state
and
local
government
committee,
but
we'd
like
to
have
it
at
the
request
of
the
co-chairs
to
go
through
ppob
first
to
get
properly
vetted
before
we
move
forward
during
a
regular
session.
Thank
you,
sir.
A
Absolutely
if
there's
no
further
business,
we
will
meet
again
in
December
and
thank
you
for
your
attendance.
The
meeting
is
adjourned.