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From YouTube: Public Pension Oversight Board
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A
Oh
good
morning,
we'll
call
this
meeting
to
order.
We
have
a,
we
have
a
quorum
and
madam
clerk,
if
you
would
please
call
the
roll.
B
B
F
A
We've
talked
numerous
times
through
the
through
the
years,
especially
this
year
about
actuarial
audit
of
the
the
system,
auditors
or
system
actuaries
and
krs-7a
250
that
lays
out
the
powers
and
duties
of
the
ppob
board
and
item
number
eight
on
on
the
our
duties
and
requirements
and
the
it's
got
the
big
word
in
there
that
in
the
kentucky
general
assembly
or
as
lawmakers,
when
they
see
the
word,
shall
that
means
you
will
do
it
and
number
eight
says
shall
at
least
once
every
five
years
have
the
actuarial
audit
performed
for
the
state
administered
retirement
systems
to
evaluate
the
reliability
of
each
system's
actuarial
assumptions
and
methods.
A
The
actuarial
audit
shall
be
performed
by
an
actuary
retained
by
the
public
pension
oversight
board.
So
we're
going
to
have
some
discussion
first
thing
this
morning
and
actually
vote
on
something
this
morning.
We're
going
we're
going
to
discuss
what
an
actuarial
audit
is,
and
please
bear
with
me
because
I
bore
you,
but
you
know
we
need
to
everybody
needs
to
understand
what
we're
voting
on.
So,
what
is
what
is
an
actuarial
audit?
Kentucky
law
is
amended
during
the
during
2016
and
2020
regular
sessions.
A
Krs-7A
0.250
provides
the
audit
powers
and
duties
of
the
public
pension
oversight
board.
An
actuarial
audit
is
mandatory
and
requires
it,
the
ppob
to
engage
in
actuary
to
conduct
an
actuarial
audit
of
the
state
administered
retirement
systems
to
evaluate
the
reliability
of
each
system's
actuary
or
the
actuaries
assumptions
and
methods
at
least
once
every
five
years.
This
measure
was
enacted
enacted
during
the
2016
regular
session,
so
we're
right
on
schedule
to
perform
our
our
required
duties.
A
Also
in
that
there's
a
biennial
budget
review
under
krs-7a
250
that
is
amended
in
in
2020.
It
makes
that
permissible
that
that
gives
the
ppob
the
the
authority
to
have
an
actuary
to
review
the
biennial
budget
request
submitted
by
the
systems
funding
pursuant
to
krs-78240.
A
The
funding
necessary
for
the
actuarial
services
is
to
be
paid
for
by
the
state
administered
retirement
systems,
scope
of
the
actuarial
audit
there's
three
levels:
an
actuarial
audit
involves
engaging
a
outside
actuary,
which
we'll
refer
to
as
a
reviewing
actuary
to
scrutinize
the
work
of
the
retirement
plans.
Consulting
actuary.
The
primary
goal
of
an
actuarial
audit
is
to
ensure
number
one
that
the
actuarial,
valuations
and
experience
studies
studies
are
performed
correctly.
A
Example
is
that
they're
compliant
with
actuarial
standards
and
practices
number
two,
the
methods
and
assumptions
used
are
reasonable
and
number
three.
The
advice
given
is
sound.
There
are
different
types
of
actuarial
audits
classified
by
the
scope
of
the
audit
that
assault
generally
the
more
comprehensive
the
audit,
the
higher
the
cost
and
there's
three
different
levels
level.
One
is
a
full
scope
actuarial
audit
that
replicates
the
original
actuary
valuation,
based
on
the
same
census,
data
assumptions,
actuarial
methods
used
by
the
plans
consulting
actuary.
That's
a
in-depth
review
of
the
entire
the
entire
action,
the
entire.
A
Assumptions
that
are
that
are
set
forth
by
the
actuaries
a
level
two
is
a
limited
scope
actuarial
audit.
The
reviewing
actuary
uses
a
sample
of
the
plan's
participant
data
to
test
the
results
of
the
actuary
evaluations
or
experiment
study
and
examines
the
the
consulting
actuaries
methods
and
assumptions
to
make
sure
they
are.
They
were
reasonable,
compliant
and
sound
and
level.
Three
is
the
least
expensive
and,
and
just
takes
a
a
fifty
thousand
foot
view
of
the
of
the
action
that
they're
reviewing
actuary
it.
A
So
what
the
recommendation
is
going
to
be
today
is
that
we
do
a
level
two
where
we
look
at
the
all
the
things
that
are
included
in
level
three,
that
they
they
look
at
the
the
plan
and
the
consulting
actuaries
methods
and
assumptions
that
they
were
reusable
compliant
and
sound.
But
it
also
includes
a
bit
of
level
one
where
they
actually
look.
Actually,
look
at
some
sample
data
to
make
sure
to
do
a
sampling
of
the
data
to
see
that
the
check
the
I
guess,
the
accuracy
of
the
of
the
actuarial
audit.
A
So
with
that
said,
and
so
what
is
the
process?
The
process
is
in
order
to
retain
an
actuary,
the
ppob
would
vote
to
engage
the
actuarial
actuary
per
7a
250
authority
and
then
seek
the
approval
of
leadership
to
issue
a
request
for
proposals
rfp
consistent
with
lrcs
and
the
finance
companies
procurement
policies.
Here
this
is
an
overview.
A
So
today,
we'll
vote.
Ppob
votes,
request
authority
from
the
lrc
to
extend
funds
to
hire
an
actuary
co-chairs
co-chairs
seek
the
the
speaker
and
the
president
of
the
senate,
speaker
of
the
house
and
president
of
the
senate,
authorization
to
expand
funds
to
conduct
an
actuarial
review
audit
pursuant
to
krs-7a
250.,
and
once
that's
authorization
is
granted.
A
Then
we
begin
the
funding
process.
Ppob
approves
once
we
get
the
approval
to
do
this
and
ppob
approves
an
rfp
and
tenders,
a
request
to
lrc
business
office.
The
rfp
issued
through
emars
and
ppob
appoints
a
subcommittee
of
three
legislators
to
evaluate
the
bids
bids
are
evaluated
according
to
criteria
set
out
but
established
by
the
rfps.
A
So
that's
sorry
to
bore
you
to
death,
but
you
know
we
need
to
understand
what
we're
what
we're
doing
here,
we're
authorized
to
do
it.
Senator
wilson
has
a
question.
B
Thank
you,
mr
chairman.
I
have
a
couple
of
questions
and
one
do
we
know
the
difference
in
the
cost
from
a
level
one
to
a
level
two
to
a
level
three.
A
B
B
And
my
second
question
is,
is
when
we
vote
on
this
and
we
get
to
the
point
of
the
rfp:
will
that
go
to
people
or
people?
Auditors?
I
guess
that
are
experienced
in
this
with
the
scope
and
size
of
systems
like
ours,.
F
F
I
think
we
use
at
least
two
of
those
five
firms.
I
don't
know
what
the
judicial
legislative
system
uses,
but
are
there
a
lot
of
companies?
Are
there
any
companies
that
specialize
in
these
audit
reviews-
and
I,
mr
chairman,
if
we
can
ask
staff
for
that
question,
they
know
that
to
staff.
F
A
That
that
set
the
clock
in
motion
and-
and
so
it
says,
within
every
five
years,
so
this
the
clock's
been
ticking
and
we're
five
years,
and
we
really
need
to
do
this
and
and
one
of
the
reasons
we
went
with
the
level
two
we
have
with
our
quasis
and
house
bill,
eight
a
lot
of
questions
about
how
that
was
that
that
might
you
know
some
of
that
data
might
be
looked
at
as
as
as
a
sample
of
data,
maybe
to
look
at
the
accuracy
of
of
how
the
actuaries
did
looked
at
that,
and
so
it
I
think
you
know
level.
A
Three
will
just
tell
us
that
they
did
it
the
right
way
but
level.
Two,
our
recommendation
without
replicating
the
entire
process,
will
give
us
a
give
us
a
sample
of
the
data,
and
I
guess
if
we
found
something
horribly
wrong,
then
we
were
we
could.
We
could
go
back
and
and
request
a
level
one.
But
as
at
this
point
we
we
don't
know
anything
about
the
cost
we,
when
we
we
do
the
rfp,
then
we'll
know
more
about
it
and
and
we'll
be
able
to
discuss
it.
A
Then,
and
of
course
the
the
board
will
vote
on
this
again
once
we
have
more
information
and
we
will
also
set
up
a
you
know,
committee
of
three
legislators
to
to
decide
to
look
at
that
also
make
a
recommendation
to
the
board.
B
Mr
chairman,
sorry
to
ask
another
question:.
A
No
sir,
this
is
this,
is
the
time
for
it,
and-
and
I
appreciate
everybody's
interest
in
and
taking
a
look
at
this
because
it
is,
this
is
an
important,
important
issue.
This
is
something
that,
when
the
ppob
was
put
into
place,
that
that
we
wanted
to
be
relevant
and
have
some
teeth
and
and
this
and
and
to
really
be
a
a
you
know,
I
guess
a
champion
for
transparency-
and
this
is
this-
is
this-
is
part
of
the
process.
B
A
Hold
I'm
gonna,
I'm
gonna
have
a
conference
with
staff
and
ask
that
question.
A
Some
very
good
advice:
I've
just
received
an
answer
that
we
could
certainly
look
into
that
and
and
and
ask
that
question
okay,
and-
and
we
can
we
can.
We
can
note
that
either
in
the
motion
or
we'll
we'll
do
that.
A
A
F
A
B
D
A
Okay,
I
think
I
can
okay
well,
here's
here's
the
here's,
the
motion
and
we
can
have
some
discussion.
Okay,
we
here's
the
motion
under
under
2016
house
bill
238
codified
as
krs
7a
250.
The
board
is
required
to
hire
its
own
actuary
to
conduct
an
actuarial
audit
of
state
misministered
retirement
systems
once
every
five
years
and
evaluate
the
reliability
of
each
system's
actuarial
assumptions
and
methods.
A
It
is.
It
has
been
five
years
since
the
passage
of
house
bill,
238
we're
following
this
statutory
requirement
and
state
starting
the
process
co-chair
duplessey
and
I
have
discussed
that
the
independent
actuaries
should
conduct
what
is
called
a
limited
scope
or
level
2
audit.
We
will
also
request
a
price
of
level
2
and
a
level
1
audit
when
we
request
rfp,
where
the
independent
actuary
not
only
reviews
the
methods
and
assumptions
of
the
system's
actuary,
but
they
also
test
those
results
against
a
sample
of
the
system's
data
and
run
their
own
calculations.
A
That's
that's
level,
two
level
one
will
just
look
at
the
at
the
the
actual
actuary
and
the
review
of
their
methods
and
assumptions.
So
we'll
include
both
of
those
level
two
and
level
three.
A
As
with
other
contracts,
a
professional
contract
requires
leadership
approval
and
will
be
bid
out
under
rfp.
Today.
We're
voting
to
have
lrc
start
the
process
once
the
rfp
is
prepared.
We
will
also
review
and
approve
it
before
it's
issued,
so
per
ppo
visa
authority
and
duty
under
krs
7a
250
to
hire
an
actuary
to
give
us
a
rfp
on
a
level
one
and
a
level.
Two
audit,
I
do.
Do
I
hear
a
motion
to
request
the
lrc
research
commission
to
extend
funds
for
actuarial
services
motion
by
representative
tipton.
C
B
Comment,
I
did
not
vote
and
the
reason
I
did
not.
G
B
G
A
So
noted
the
motion
passes.
We
will
re
request
that
the
lrc
request
leadership
to
request
lrc
to
proceed
all
right.
Thank
you
and
and
again
sorry
for
the
that's
the
long
drawn
out
process,
and
so
thank
you
for
bearing
with
me
on
that.
H
There
you
go.
Thank
you,
mr
chair.
Good
morning,
everyone
bo
barnes,
deputy
executive
secretary
and
general
counsel
for
teachers,
retirement
system.
I've
been
asked
today
to
provide
some
information
about
some
supplemental
funding
that
trs
is
receiving
for
some
prior
benefit.
Adjustments
sometimes
referred
to
as
greenbox
dollars.
I've
been
asked
to
provide
some
data,
some
statistics
about
the
impact
of
sick
leave
on
retirement
allowances
and
also
the
impact
of
having
a
member
having
a
retirement
allowance
calculated
on
their
three
highest
rather
than
their
five
highest
salaries.
H
Most
of
these
are
numbers
they're,
going
to
speak
for
themselves,
so
I'll
be
largely
going
over
these
slides
and
explaining
what
they
do
show,
but
I'll
have
a
few
highlights
that
I'll
make
and
then
certainly,
as
always,
any
questions
that
any
member
of
the
board
may
have
before
I
get
into
that,
though,
I
do
want
to
note
that
at
the
prior
meeting
I
stated
that
it
looked
like
trs
could
conclude
the
last
fiscal
year
close
to
30
percent
with
returns
on
the
pension.
H
A
H
You,
sir,
and
I
do
want
to
know
too
that
that
exceptional
year
would
not
been
possible
without
the
additional
funding
that
tr's
is
receiving
now
for
the
sixth
straight
year
in
a
row,
without
that
additional
funding,
these
returns
would
not
be
possible.
So
certainly,
we
appreciate
want
to
thank
members
of
the
general
assembly
for
providing
additional
funding
we're
getting
today.
Thank
you.
A
Both
for
the
I
guess
for
those
watching
and
for
I
guess,
to
better
educate
this
committee
and
myself
well,
those
returns
at
the
29.5
will
that
be
smooth.
Yes,.
A
Okay
and
so
the
five
year
smoothing
that
will
show
this.
What
will
that
show
this?
And,
as
we
look
back
and
we
look
at
the,
I
guess,
five-year
or
one-year
average,
what
will
that
will
still
show
when
we
look
at
those
when
you
say
one,
five,
ten:
twenty?
How
would
that
look
on
paper
and
what
difference
will
smoothie
make
to
those
numbers,
as
we
look
at
them
in
the
future?.
H
Well,
well,
for
those
time
periods
that
we
share
with
this
body,
you
know
the
as
you
discuss
the
one
five
ten.
All
those
periods
will
be
above
seven
and
a
half
percent.
Now,
with
this
year
in
the
five-year
period,
the
smoothing-
I
don't
have
that
final
number
yet,
but
we're
dropping
off
a
negative
one
percent
year
and
adding
essentially
a
thirty
percent
year.
So
for
the
five
year,
smoothing
you're
going
to
see
something
north
of
10.
I
would
imagine.
H
H
Okay,
this
is
the
first
of
three
slides
that
I'm
going
to
share
with
you
this
morning,
and
this
reflects
some
payments
that
are
coming
out
of
the
general
fund
for
certain
prior
benefit
adjustments,
and
you
saw
this
slide
last
time.
It's
it's
sick
leave,
but
I've
been
asked
to
provide
more
broader,
look
at
the
supplemental
payments
that
are
being
made
for
these
prior
benefit
adjustments,
and
these
benefit.
H
Adjustments
and
sick
leaves
the
first
one
I'm
going
to
talk
about,
of
course,
at
one
time
in
the
90s
they
were
paid
for
and
lumped
some
so
there'd
be
a
general
fund
appropriation
just
to
pay
for
them
and
in
the
late
90s
the
commonwealth
moved
to
paying
for
these
on
an
amortized
basis,
so
that
now
most
of
these
payments
are
a
20-year
amortized
period
to
pay
off
his
benefits.
And
so,
if
you
just
look
at
this,
on
the
left
hand
column,
you
see
the
beginning
amortization
year.
So
that
means
there
was
sick
leave.
H
That
was
provided
that
the
commonwealth
paid
for
through
the
general
fund
in
2002
that
the
payments
began
being
made
in
2003.,
so
we're
still
making
payments
on
that
amount,
and
you
can
see
just
to
the
right
of
that
column.
The
balance
as
of
june
30th
2021
on
that
was
two
million
two
hundred
eight
thousand
two
hundred
twenty
four
dollars.
H
One
thing
I
will
notice
with
this-
and
I
noted
this
last
time-
if
you
look
at
the
year
2020
at
the
bottom
and
you
look
under
annual
fiscal
payment,
that
amount
is
going
to
go
down
by
half
okay,
because
we
have
to
predict
how
many
people
are
going
to
retire
with
what
salaries,
how
much
sick
leave
are
they
going
to
have
and
that
number
there
of
4
million
826
thousand
dollars.
H
That's
going
to
be
less
about
half
that
in
coming
years,
in
that
amortization
period
and
the
commonwealth
will
receive
credit
for
having
made
more
than
what
was
necessary
in
the
first
year.
Likewise,
2021
that
4
633
100
that's
going
to
be
about
half
okay
and
therefore
that
balance
you
see
to
the
left
of
it
of
50
million
722
171,
that's
going
to
be
more
in
line
with
the
balances
you
see
just
above
it.
H
You
know,
for
example,
the
24
million
365
681,
and
I
would
anticipate
that
we're
probably
going
to
see
the
same
thing
with
2022.
Okay,
same
thing
there,
so
we're
not
really
we're
not
seeing
spikes
in
the
cost
of
sick
leave.
These
are
just
being
conservative
and
what
we
request.
If
we
suddenly
have
a
big
year
in
retirements,
we
have
a
big
year
with
a
lot
of
sick
leave
or
or
anything
else
that
might
affect
the
cost.
A
If
you
don't
mind,
of
course,
to
make
this
help
me
better
understand
this
and
as
as
I
better
understand
it,
hopefully
other
members
and
and
those
watching
will
in
2003
you
have,
the
balance
was
2
million,
208,
000.,
yes,
and
then
now
is.
That
is
that
the
balance?
That's
just
what
sick
leave
cost
us
that
year.
H
A
Okay
and
then,
of
course,
in
the
2022
and
that's
an
estimate,
but
that's
50
million
222
000.
That's
that's
a
cumulative!
What
we
owe
for
20
years
or
that's
the
payment
per
year
on
what
we
owe.
H
That
is
the
total
balance
for
all
those
payments
together.
That
is
how
much
is
owed
on
sick
leave.
Now
I
would
expect
again
that
to
come
down
a
little
bit
even
below
400
million,
because
2021
and
2022
those
balances
2021
for
certain
is
going
to
be
about
it's
going
to
be
less
a
lot
less.
It's
going
to
be
more
like
those
lines
above
it
and
20
22
is
likely
going
to
be
less
too
so,
ultimately,
it's
it's
probably
going
to
be
a
little
less
than
400
million
outstanding.
A
So
we
owe
today
our
the
calculation
is
we
we
owe
we
have
an
outstanding
debt
of
433
million
180
000
and
our
annual
payment
is
63
million,
493
thousand
dollars
back
to
and
again
this
is
elementary,
but
I
want
a
better
understanding
in
2003
the
balance
was,
you
know,
2
million
208
000,
and
it
looks
like
we
paid
that
one
off
that
year
did
we
because
we
actually,
the
actual
payment,
was
more
than
what
showed
the
balance
being.
H
The
so
that
that
it
will
be
paid
off
this
year,
so
this
fiscal
year
that
we
just
started
it
will
be
paid
off.
The
last
payment
will
be
made,
and
so,
if
you
will
it's
like
making
the
last
payment
on
your
home
mortgage
and
there'll
be
no
balance
left
for
that
year.
Now.
A
It
appears
to
me,
and-
and
you
know
these
numbers
have
increased
every
year.
You
know
they've
gone
from.
You
know
that
two
million
a
year
that
that
that
accumulate
up
to
you
know
anticipated
for
22
and
50
million,
so
the
50
million
that
is
estimated
for
2022
is
for
the
the
retirees
that
retire
that
year
and
what
it
would
cost
the
additional
money
that's
needed
to
pay
for
sick
leave
over
the
the
course
of
their
retirement.
Is
that
correct.
H
And
I
need
to
do
a
better
job.
I
should
provide
some
more
detail
on
this
comment.
I
apologize
for
that,
but
so
this
is
this
second
column
from
the
left,
though
you
know
just
to
the
I'm
sorry
to
the
right
of
of
the
years.
Okay,
the
balance
as
of
june
30th
2021,
the
header
that
represents
the
balance
for
each
single
year.
H
So
when
you
look
right
underneath
balance
at
june,
30th
2021
and
you
see
for
2003
the
2
208
224,
that's
the
bounce
just
for
that
year,
and
then
we
keep
on
adding
cumulatively,
adding
up
all
those
balances
for
these
years.
So
you're
seeing
the
balance
go
up
for
these
years,
because
you
know
at
2023
we
had
one
payment
left.
If
you
go
off
further
for
you
go
down,
you
have
more
years
left,
so
the
balance
is
going
to
be
larger.
H
The
further
you
go
down
because
we
have
only
made
we've
made
fewer
payments
toward
paying
off
the
cost
of
the
sick
leave
for
that
year.
So
that's
doesn't
that
just
reflects
normal
cost.
So
if
you
want
to
see
how
the
payments
have
changed
over
the
years,
that
would
be
the
the
third
column
from
the
I'm
sorry
from
the
left
and
that's
annual
payment
fiscal
year,
2022.
H
Okay,
so
you
can
see
two
three
one,
four
two
hundred
for
two
thousand
three
and
then
it's
fluctuated
as
you
go
down
that
column,
largely
in
the
twos
and
three
million
range.
You
know
we
saw
several
years
in
the
three
million
dollar
range
and
then
in
2019
we
saw
it
at
two
million,
seven
hundred
fifty
one
thousand
three
hundred,
so
it
actually
went
down
a
little
bit.
I
anticipate
twenty
or
twenty
twenty
will
be.
H
You
know
similar
to
that
so
down
a
little
bit
from
the
3
million
range,
but
that's
the
column
that
kind
of
reflects
how
the
payments
have
varied
over
the
years
and
fairly
similar.
You
have
some
years
where
you
know
it
goes
up
a
little
bit
more
and
then
you
have
some
of
your
goes
down,
but
basically
the
two
to
almost
four
million
dollar
range,
mostly
around
three.
You
know-
probably
average
you've
averaged
all
that.
C
Thank
you,
mr
chairman,
and
bo
you
kind
of
touched
on
this,
but
I
guess
what
I
want
to
get
to
is.
Are
these
numbers
that
we
see
in
front
of
us
under
the
balance
at
june?
30Th
2021?
H
C
So
if
I
say,
for
example,
2020
it's
24
million
365
681,
with
a
payment
of
4.826
million
dollars
with
20-year,
am
I'm
assuming
we're
in
essence
calculating
that
at
the
same
the
discount
rate,
there
is
the
same
as
the
assumed
rate
of
return
internal
to
the
system,
correct,
correct,
so
the
essence
of
what
we're
looking
at
there,
then
is
the
policy
starting
back
in
03
was
to-
and
this
is
not
exactly
what's
happening,
but
it's
the
essence
of
what's
happening,
which
is
borrowing
from
the
retirement
system,
at
their
assumed
rate
of
return
to
pay
off
a
sick
leave
debt
correct
all
right.
F
I
senator
mcdaniels.
The
answer
to
that
was
a
little
was
definitely
helpful
toward
my
question,
but
the
20
years
was
in
the
bill
back
in
2003.
Why
is
that?
Why?
Year
of
last,
payment
is
20
years
later.
H
Yes,
it
actually
it's
it's
in
the
budget
bill
and
it
actually
started
back
in
the
late
90s.
So
we've
already
rolled
off
some
of
those
20-year
periods
because
they
started
back.
You
know
in
the
90s.
Okay,
2003's
is
the
only
one
we
have
left.
There's
only
one
payment
left
on
it.
A
I
guess
looking
looking
at
this
back
early
on
when
this
started.
It
I'll
just
be
curious,
why
we
didn't
try
to
pay
those
off
on
a
yearly
basis
instead
of
financing
them.
For
you
know,
if
I'm,
if
I'm
correct,
if,
if
I'm
reading
this
right,
2004
was
5
million
563
000.
the
payment
per
year
for
20
years
was
3
million.
So
it's
am.
I
correct
we're
paying
back
60
million
dollars
on
that
5
million
dollar
that
we
borrowed.
A
H
B
B
So
what
was
the
original
principal
balance,
and
I
think
that
will
help
us
have
a
better
understanding
of
how
much
is
principal
and
how
much
of
the
payment
we're
making
is
the
assumed
rate
of
return
that
discount
rate,
and
so
basically
on
this
debt
of
433
million
dollars,
we're
paying
seven
and
a
half
percent
interest
on
that.
Is
that
a
correct
assumption
correct
if
I
could
have
one
more
follow-up
question,
mr
chairman?
Yes,.
A
B
H
H
And
that
was
the
first
slide
of
showing
payments
toward
the
supplemental
or
supplemental
payments
for
some
prior
benefit
adjustments.
There
are
two
more
payments
streams
of
payments
and
those
are
reflected
on
this
slide
and
at
the
top
here,
you'll
see
a
box
for
supplemental
colas,
okay,
and
what
that
is
most
of
you
are
probably
aware,
but
there
is
a
teachers
retire,
teachers
get
a
standard
one
and
a
half
percent
cost
of
living
adjustment
each
year
and
that's
fixed
in
statute.
H
Okay
and
trs
is
a
social
security
replacement
plan,
so
security
provides
colas
for
their
retirees,
so
trs
provides
a
base
1.5
cola
in
earlier
years,
when
budgets
were
better-
and
we
haven't
had
this
since
you
know
the
you
know
early
part
of
the
first
decade
of
the
2000s
when
some
budget,
when
budgets
were
better,
the
general
assembly
could
sometimes
provide
additional
funding
that
would
provide
for
a
cost
of
living
adjustment
over
and
above
the
one
and
a
half
percent
cola,
the
contract
cpi,
and
that
the
budgets
you
know
we
had
some
tight
budgets
right
around
2008.
H
You
know
you
see,
that's
the
last
one
that
we
we
got
a
cola,
for
we
had
some
some
tough
budgets,
and
fortunately,
inflation
has
been
low
since
that
period
of
time
too.
So
anyway,
this
box
represents
funding
to
provide
some
cost
of
living
adjustment
greater
than
one
and
a
half
percent,
and
you
can
see
just
like
the
prior
schedule
that
I
showed
you
for
sick
leave.
You
have
the
beginning
year
that
the
first
payment
was
made.
Then
you
have
the
balance.
H
H
That
is
not
being
provided
to
retirees,
tr
or
kppa,
and
but
the
commonwealth
was
providing
that
for
retired
teachers.
At
one
point,
and
just
like
with
you
see
with
this-
and
this
was
set
up
in
a
10-year
amortized
period,
we
see
that
the
last
year
of
payment
is
this
fiscal
year.
So
after
this
fiscal
year,
this
schedule
will
no
longer
exist
and
then
for
the
last.
D
Oh,
thank
you,
mr
chairman.
My
question
was
actually
prior
on
the
on
the
sick
leave.
We
didn't,
I
stuck
my
hand
up
real,
quick,
but
bo.
Could
you
go
back
on
the
annual
payment
of
the
63
million?
D
H
So
the
2020
that
4
million
826
thousand
dollars
has
already
been
received,
so
we
will
adjust
going
forward
future
budget
request
down
less
than
about
half
of
that:
okay
2021,
that
that
will
be
adjusted
down
by
about
half
and
2022,
which
will
be
our
next
budget
request
for
the
up
in
the
upcoming
session,
we'll
ask
for
something
in
that
neighborhood,
but
that
very
likely
will
be
adjusted
downward
with
experience
again.
Some
of
these
budget
requests,
where
we're
looking
in
the
future,
how
many
people
are
going
to
retire.
H
You
know
what
are
retirement
where
the
final
salary
is
going
to
be
how
much
sick
leave
are
they
going
to
have?
You
know
as
pertains
to
this,
so
we
do
kind
of
an
over
and
under
we
make
our
budget
request
and
we
see
where
it
is,
and
we've
asked
for
too
much.
Then
we
ask
for
less
and
we
adjust
downward
for
the
overpayment
in
that
year.
H
If
we
ask
for
too
little,
then
we
ask
for
a
little
bit
more
to
adjust
and
we
do
that
with
the
the
the
fixed
statutory
rate
that
comes
through
the
seek
formula
too.
H
You
know
we're
predicting
into
the
future
how
many
teachers
there's
going
to
be
what
payroll
is
going
to
be
so
we're
constantly
doing
kind
of
this
look
back
and
doing
over
and
under
make
adjustments
along
the
way,
and
that's
what
we're
doing
here
so
that's
to
get
more
directly
to
your
answer
that
63
493
200
will
probably
be
a
little
bit
less
than
what
a
little
bit
less
than
the
final
budget
request
slightly
less.
A
Thank
you,
mr
central
meals.
Beau
on
I
guess
the
payoff
on
on
sick
leave
is
basically
433
million.
If
we
was
to
pay
it
off.
If,
if
somehow
we
decided
like,
we
did
back
in
2008,
where
we
bonded
money
to
pay
payback
and
it
would
actually
save
the
taxpayers
three
or
four.
I
don't
know
what
bonding
what
we
could
borrow
money
for
now,
two
and
a
half
three
percent.
I
don't
I
don't
know
what
bonding
would
be
and
then
144
on
the
on
the
cola
is.
A
H
Yes,
sir,
and
I've
advanced
to
the
third
of
those
three
slides,
and
this
shows
the
totals
for
those
payments
that
are
being
made
for
those
three
benefit.
Adjustments
and
you'll
see
the
bounds
as
of
june
30th
2021
was
570
billion,
266
111,
so
that
would
be
the
payoff
amount,
and
you
know
this
is
of
course
it's
like
a
home
mortgage,
so
this
is
not
set
in
stone.
Just
like
with
a
home
mortgage.
H
You
know
you're
going
to
pay
it
not
pay
it
off
now
or
wait
a
month
or
two
months
or
six
months.
Then
you
have
to
get.
You
know,
updates
on
payoff
information
because
of
interest
and
because
of
payments
that
are
made.
So
that
would
be
the
same
thing
here.
So
this
just
gives
you
an
idea,
as
of
june
30th
2021
what
the
payoff
is
amount,
but
it
gives
you
a
good
idea
of
what
the
payoff
amount
is,
and
I've
asked
the
actuaries.
H
You
know
if
that
were
paid
off
lump
sum,
as
you
stated
that
could
be
done
and
it
can
be
done.
That
would
result
in
a
reduction
of
about
conservatively
of
about
one
percent
in
the
actual
required
contribution
from
the
commonwealth.
It
was
paid
in
lump
sum,
so
about
37
million
dollars
a
year.
Less
would
have
to
be
paid
to
trs.
H
F
Am
I
correct
that,
since
these
are
reflected
as
20
fiscal
22
payments,
this
does
not
reflect
the
changes
in
the
amazon?
The
actuarial
assumption
changes
that
we
just
heard
about
this
summer.
Is
that
correct.
F
H
Yes,
yes,
I
would
say
the
the
offsetting
thing.
Of
course
here
is
the
return
we
had
this
past
fiscal
year
and.
H
That's
going
to
and
I'd
that's
something
I
know
we're
all
anxiously
looking
forward
to
having
and
but
that
it
could
be
an
offsetting
factor.
I
mean
it
could
completely
offset,
or
at
least
it's
going
to
partially
offset
these
requests
in
future
budgets,
you're
right,
not
for
2022.
correct.
Thank
you.
H
Okay,
so
we
were
asked
to
provide
some
retirement
statistics
kind
of
broken
down
by.
H
Oh,
maybe
it
did
not
quite
finish
that,
but
anyway,
yes,
that's
the
for
our
under
age,
65
retirees
who
participate
in
the
kentucky
employees
health
plan.
H
At
one
time
there
was
a
non-single
subsidy
through
kehp
that
active
teachers
and
state
employees
get
but
is
not
now
available
to
retirees
state
or
teachers.
So
the
state
was
making
some
payments
to
provide
that
non-single
subsidy
and
again
that's
for
people
who
choose
couple
parent,
plus
or
family
coverage
that
they
were.
Then
they
were
paying
for
those
on
amortized
basis
over
10
years
and
the
beginning
amortization
period
was
2012.
So
that
means
this
fiscal
year.
H
A
Back
to
your
total
balance
there
on
the
on
that
next
page
that
you've
gone
to,
I
guess
the
one
you're
on
there
now.
Yes,.
H
A
579
million,
if
maybe
somebody
would
would
look
at
that
if
we
bonded
that
at
a
great
reduced
interest
rate,
would
the
would
the
savings
be
enough
to
do
a
pay
as
you
go
going
forward
on
them
on
sick
leave
amortization
as
we
as
we
know
it.
That's
basically
what
four
million
a
year.
A
Our
or
the
the
on
average,
what
the
sick
leave
cost
us
a
year
that
we
would
have
to
have
additional
money
to
pay
to
do
pay
as
you
go.
H
And
I
need
to
get
you
a
number
on
that
it
would
by
saving
37
million
dollars
a
year
if
this
were
paid
off.
Lump
sum
you
know
approximately
could
be
a
little
bit
more
than
that
you're
paying
most
of
the
cost
of
the
annual
sick
leave,
but
I
need
to
get
you
a
better
number
on
just
the
sick
leave
alone.
H
H
Okay,
so
this
is
just
retirement
statistics
you
know,
and
we
were
asked
to
provide
statistics
based
on
a
range
of
annual
pension
benefits
at
the
upper
left-hand
corner
in
this
schedule.
You'll
see-
and
this
is
everybody-
this
is
retirees-
this
is
survivors
too
okay,
so
it's
not
just
retired
teachers,
since
they're
survivors,
so
you'll
see
less
than
ten
thousand
dollars.
H
H
Then
we
see
number
next
column
number
of
annuitants
beneficiaries,
the
actual
number
of
people
receiving
payments
in
these
amounts
and
you'll
see
most
of
these
most
of
our
folks
are
in
the
twenty
five
thousand
to
fifty
thousand
dollar
range.
That's
twenty!
Eight
thousand,
eight
hundred
and
nine
folks
are
receiving
retirement
annuity
in
that
amount,
and
the
next
highest
range
is
the
fifty
thousand
to
seventy
five
thousand
dollar
range,
where
eleven
thousand
nine
hundred
five
people
are
receiving
a
return
annuity
in
that
amount.
H
Next
column
is
total
share
of
pension
payments,
and
this
is
by
dollar
the
actual
dollar
amount,
where
all
the
dollars
going
and
again
you
see
most
of
these
dollars
paid
out
are
going
to
retirees
making
between
25
and
50
thousand
dollars
in
pension.
It's
49.70
about
50,
you
know
or
50
percent
half
of
our
retirees
are
in
that
range
or
the
dollars.
H
Half
the
dollars
are
going
to
retirees
in
that
range
and
the
next
highest
is
the
50
000
to
five
thousand
thirty
one
point:
four:
eight
percent
of
our
the
dollars
are
going
to
folks.
You
know
in
that
range,
so
essentially
ninety
percent,
I'm
sorry.
Eighty
percent
of
all
of
our
the
kind
of
the
dollars
are
going.
H
The
folks
in
that
range.
That's.
The
next
is
final
average
salary
of
group.
Next
to
that
is
average
service
credit,
and
you
see,
as
you
go
down,
that
column
years
of
service
credit
increase
as
retirement
allowances
increase.
So
you,
when
you
get
to
our
largest
retirement
allowance,
it's
43.66
years
on
average
that
those
retirees
are
retiring
with
in
that
group,
let's
see
and
then
the
last
is,
let's
see
I'm
sorry.
Next
is
average
annual
benefit,
and
then
you
see
average
sick
days
paid.
H
It
capped
sick
leave
days
at
300,
for
individuals
become
members
on
or
after
that
date,
and
the
other
thing
that
I'll
note
in
this
slide
is
the
the
two
rows
just
below
at
the
upper
part.
I
was
just
talking
about.
They
reflect
the
same
statistics
for
people
who
retire
with
27
or
more
years
of
service
credit
or
anyone
with
27
or
more
years
of
service
credit
who
also
get
a
retirement
allowance
calculated
on
their
three
highest
rather
than
their
five
highest
salaries.
A
Okay,
let's
see
that's
a
lot
of
data
there.
Thank
you
for
providing
that
one.
I
guess
if
you
drew
anything,
if
you
look
at
that,
just
conclusions
you
would
draw
from
that.
Is
that
the
those
higher
paid
ranges
they
didn't
do
they
ended
up
with
a
lot
of
sick
days,
this
more
sick
days
than
the
than
the
average
is
that
is
there?
Is
that
correct.
H
That
that
is
correct,
so
you,
you
know
the
longer
that
people
remaining
in
employment,
that
they
do
tend
to
accumulate
more
unused
sick
leave
days
and
that
that's
reflected
here
in
the
schedule.
H
H
Questions
and
and
if
not
certainly
we're
more
than
happy
to
follow
up.
A
Okay,
well
that
I'm,
I
didn't
jump
ahead
so
I'll
be
waiting!
Wait
on
that
then.
A
B
Mr
chairman,
I
have
a
question:
if
I
can.
Butt
in
this
is
representative
wheatley.
B
Okay,
thank
you,
mr
chairman,
bo
on
this
chart
with
the
retirees
that
that
brings
up
this
question
that
that
gets
asked.
Sometimes-
and
I
don't
know
if
you
have
this
at
your
fingertips
or
if
you
can
provide
it
to
us,
but
do
you
know
the
percent
of
retirees
who
are
kentucky
residents
and
then
how
that
percentage
compares
to
other
states,
for
instance,
if
if
our
retirees
are
90
or
kentucky
residents,
what
is
the
comparison
to
maybe
u.s
average
and
then
our
surrounding
states?
Do
you
have
any
numbers
on
that.
H
The
number
of
retirees
who
stay
within
kentucky
that
that's
about
90
percent
you're
correct,
that's
where
I
don't
have
comparable
percentages
for
other
retirement
systems
or
other
states.
We
do
obviously
retain
a
lot
of
folks
here
and
we
tend
to
retain
the
career
folks
here
you
know
a
lot
of
people.
We
see
that
don't
stay
in
kentucky
or
people
maybe
set
a
few
years
of
service
and
and
maybe
in
a
bordering
state.
You
know
they've
moved
to
a
bordering
state
because
that's
where
they
have
most
of
their
career.
B
Well,
if
I
can
also
ask
what
would
be
interesting
is-
and
this
might
get
too
close
to
identifying
individual
retirees,
but
the
dollar
amounts
that
are
being
spent
or
saved
or
left
here
in
kentucky
and
what's
being
spent
that
circulate
throughout
our
economy,
is?
Is
there
a
way
to
to
come
up
with
that?
That
number.
H
H
This
slide
was
shared
with
the
the
the
this
board
last
meeting
as
well,
but
I'll
just
go
over
it
one
more
time,
just
sort
of
as
a
refresher
and
for
anyone
who
might
not
have
been
at
the
last
meeting.
So
this
is
the
basic
it's
the
basic
formula
for
how
retirement
allowances
are
calculated
and
there's
some
other
things
that
go
into
it.
H
But
this
is
the
basic
formula,
and
it's
the
bottom
here
and
what
you
do
is
you
see
on
the
very
bottom
here
total
service
credit
and
that's
times
the
multiplier
for
most
years.
For
most
our
members,
that's
going
to
be
two
and
a
half
percent
times
the
final
average
salary,
which
is
going
to
be
average
of
the
highest
three
or
highest
five
salaries.
H
So,
for
example,
if
your
total
service
credit,
you
had
30
years
that
you
retired
with,
and
that
would
get
you
a
two
and
a
half
percent
multiplier,
multiplying,
30
up
two
and
a
half
that
gives
you
75
percent-
and
let's
say
your
final
average
salary
is
sixty
thousand
dollars.
Seventy
five
percent,
some
sixty
thousand
forty
five
thousand
dollars.
H
So
it's
a
forty
five
thousand
dollars
a
year
retirement
allowance
and
of
course,
I
always
you
know
the
previous
slide,
and
you
know
with
these
examples
we'll
always
like
remind
most
people
know,
maybe
not
everybody
in
the
audience,
but
teachers
do
not
participate
in
social
security,
so
these
retirement
allowances
replace
social
security
and
then,
on
top
of
that,
like
most
large
employers
provide
a
retirement
on
top
of
social
security
and
here's
a
little
more
detail
on
on
how
sick
days
are
used
in
retirement
calculations
and
sick
leave
for
increasing
what
we
call
salary
credit-
okay,
as
opposed
to
increasing
just
days
of
service,
that's
available
only
for
local
school
districts.
H
That
was
just
passed
out
this
recent
session
and
provide
a
new
tier
benefits
for
individuals
who
become
members
on
or
after
january,
1st
2022.
They
cannot
use
sick
leave
towards
salary
for
salary
retirement
calculation
purposes.
The
school
districts
can
still
compensate
them
and
they
could
put
that
money
into
the
trs
supplemental
savings
account
they
want
to,
but
it
cannot
be
used
to
boost
their
retirement
loans
as
it's
going
to
be
shown
in
this
example.
So
the
way
sick
leave
is
used
in
retirement
calculations
right
now.
H
First,
you
take
the
retiring
teachers
contract
salary
for
that
last
year.
What's
their
how
much
they're
getting
paid
divided
by
the
contract
days,
how
many
days
are
in
their
contract,
and
that
gives
you
a
daily
rate
that
daily
rate
is
then
multiplied
by
local
policy
and
what
that
means
is
school.
Districts
are
not
required
to
compensate
retiring
teachers
for
their
unused.
Sick
leave
is
discretionary
and
they
may
not
compensate
them
for
more
than
30
percent
of
that
daily
rate.
H
Okay,
but
where
we
are
today,
all
school
districts
to
my
knowledge,
are
not
only
compensating
the
retiring
teachers
for
their
unused
sick
leave,
but
they
are
compensating
them
at
that
maximum
30
percent
daily
rate,
so
multiplying
that
30
percent
times
a
daily
rate
gives
a
six
day
value
and
that
six
day
value-
and
I
have
an
example
to
show
all
this
and
below
that
sick
day.
Value
is
multiplied
by
a
number
of
use.
H
Sick
leave
days
to
give
the
final
payment
and
that
final
lump
sum
payment
as
they
retire,
is
incorporated
into
their
last
year's
salary
for
retirement
calculation
purposes.
So
in
this
example,
you
have
someone
a
58
thousand
dollar
contract
salary
divided
by
187.
They
have
a
310.16
daily
rate
at
310
dollars
and
16
cents.
The
school
district
will
compensate
them
and
lump
sum
at
30
percent
of
that,
so
that's
93
dollars
and
five
cents
and.
F
B
Thank
you,
mr
chair,
and
my
question
was
from
the
or
in
the
chat
it
was
about
the
previous
slide,
but
I
do
have
a
question
about
this
one
also
so
bo
just
just
to
see
if
this
is
plays
out
the
correct
way,
with
final
calculation
being
based
on
the
the
high
three
we
could
assume
with
this
example
of
58
000,
plus
the
12
000
561
for
their
final
year.
B
H
Yeah,
yes,
that
that
would
give
you
if
it
was
based
on
the
three
highest
hours.
You'd,
have
your
final
average
salary
based
on
your
three
highest
salaries
and
I
represent
wheatley.
I
have
a
slide
that
gives
a
sort
of
example
of
how
that
works.
It's
coming
up
next,
but
you
are
correct.
Thank
you,
mr
chair.
F
Good
timing
and
as
you
go
through
that
slide
now,
I'm
you
know
recovering
account
and
I'm,
but
just
my
calculations
is
for
those
people
who
are
on
a
high
three.
F
This
could
sick
pay
could
represent
about
12
percent
of
their
benefit.
So
that's
my
assumption
and
I'd
like
you
to
comment
on
that
as
you,
the
reasonableness
of
that
as
you
go
through,
because
again
it's
whatever
that
number
is
divided
by
three:
that's
the
impact
on
on
the
final
average
salary
on
which
benefits
are
placed
so
continue.
Sir,
thank
you
I'll,
listen!
F
A
H
H
I
I
but
I
don't
know
I'd
and
I'd-
have
to
ask
back
the
office
and
see
if
we
have
some
information,
we're
just
having
total
sick
leave
days
reported
to
us,
so
we
wouldn't
have
the
detail
of
some
of
our
personal
days
being
rolled
into,
but
anecdotally,
I
think
probably
staff
would
have
some
idea.
A
You
know,
I
think
they
you
know
should
be
compensated
for
for
those
those
days,
but
I
guess
ultimately
they
end
up.
You
know
with
a
fairly
hefty
price
tag
as
we
as
we're
financing
them
over
over
years
over
over
the
years.
So
please
proceed.
H
Okay,
so
this
next
slide
shows
how
sick
leave
impacts
retirement
on
the
left.
You
just
have
the
labels
in
the
middle
column.
H
H
You
know
for
the
board
to
see
how
sick
leave
impacts,
retirements
so
I'll
just
start
at
the
first
at
the
top
of
the
first
row
years.
You
know
we're
using
the
same
years
in
this
example
27
years
salaries
for
averaging
again,
the
middle
columns
using
the
five
highest
salaries,
the
column
to
the
right.
The
three
highest
salaries
about
64
percent
of
our
members
are
having
a
return
allowance
that
are
calculated
on
the
five
highest
salaries
about
36
percent
of
our
members.
Have
a
retirement
allowance
calculated
on
the
three
highest
salaries.
H
Then
we
get
down
to
the
next
row,
the
total
multiplier
that
we
discussed
in
the
previous
slide,
67.5
for
both
same
years
of
service,
okay,
that
doesn't
change
and
then
I'll
focus
on
the
middle
column.
Before
shifting
over
to
the
column
or
box
on
the
right,
it's
more
than
a
column,
so
you'll
see
in
the
middle
box
in
green
on
the
left,
it's
what
the
retirement
allowed,
how
what
the
retirement
allowance
would
be
without
sick
leave
days.
So
you
see
zero
sick
days.
Zero
leave
payment.
H
The
final
average
salary
for
this
example
is
fifty
seven
thousand
four
hundred
and
the
annual
benefit
is
thirty.
Eight
thousand
seven
hundred
forty
five
dollars
and
their
last
salary
was
fifty
eight
thousand
dollars
so
that
thirty,
eight
thousand
seven
hundred
forty
five
represents
a
replacement
of
their
last
salary
at
sixty
six
point.
H
Eight
percent
now,
in
that
same
middle
box,
going
to
the
right
hand,
column
in
green
now
we're
going
to
assume
that
they
have
135
unused
sick
days,
so
they're
getting
a
leaf
payment
of
12
562
dollars
and
that
increases
their
final
average
salary
from
fifty
seven
thousand.
Four
hundred
to
fifty
nine
thousand
nine
hundred
twelve
and
increases
their
annual
benefit
from
thirty
eight
thousand
seven
hundred
forty
five
to
forty
thousand
four
hundred
forty
one
dollars.
H
So
we
now
have
they're
replacing
69.7
of
their
last
salary
versus
66.8
percent
by
the
inclusion
of
that
sick
leave.
Now
moving
over
to
the
the
box
on
the
right
again
and
we'll
go
to
the
the
green
column
on
the
left-
and
this
is
again,
this
is
using
the
three
highest
rather
than
the
five
highest
salaries.
H
You'll
see
zero
unused
sick
leave
day,
zero
leave
payment
final
average
salary,
57,
700
annual
benefit,
38
948
dollars
same
last,
salary
in
in
this
case,
because
you're
using
the
three
highest
dollars,
rather
than
the
five
you're,
seeing
a
replacement
of
67.2
percent
of
their
last
annual
salary
of
58
thousand
dollars.
Now
shifting
to
the
the
data
in
the
the
green
column
to
the
right,
we're
now
assuming
135
sick
leave
days
and
we'll
see
they
have
a
leaf
payment
of
12
562
dollars.
H
Their
final
average
salary
increases
to
sixty
one
thousand,
eight,
eighty
seven,
which
gives
them
a
retirement
allowance
of
forty
one
thousand
seven
hundred
and
seventy
four
dollars,
and
in
this
case
they
have
replacement
of
their
last
salary
of
72
percent.
With
the
sick
leave
in
the
high
three.
A
F
Regarding
that
bo,
though,
and
I'm
going
off
your
numbers
salaries
forever,
if,
if
you
make
it
to
the
high
three,
let's
just
assume
you
got
135
use
sick
days,
your
leave
payment
is
not
12
562.,
based
on
your
final
average
salary.
On
the
previous
slide,
it's
really
19
541..
So
well,
it's
79
0091.
F
So
I
the
the
way
you
presented
this,
I
think,
is
a
little
misleading.
I
don't
know
if
it
changes
the
point,
but
nonetheless
it
just
seems
to
be
well.
H
That's
because
I
do
want
to
make
sure
there
might
have
been
some
confusion
about
that
prior,
the
the
12
562
that
is
based
on
the
last
annual
salary,
not
the
final
average
salary.
So
that
would
be
unchanged,
and
that
would
be
so
it's
based
on
the
58
000.,
not
not
the
final
average.
F
Okay,
mr
chairman,
can
I
have
a
follow-up
please.
A
F
So,
who
is
responsible
for
the
sick
leave
costs
for
school
districts.
H
The
the
the
school
district
pays
that
lump
sum
amount
30
of
the
daily
rate
the
commonwealth
pays
for
the
actuarial
cost
of
having
that
included
in
their
retirement.
F
Okay,
so
right
so
it
does
affect
our
retirement
liability.
Yes,
because
of.
A
A
Do
you
go
back
and
recalculate
that
and
if
you
do,
does
that
what
does
that
increase
cost
because,
obviously
there'll
be
some
increased
costs
when
you
go
back
and
and
recalculate
those
with
the
longevity,
I
guess
assumption:
does
that?
Does
that
make
a
difference
anywhere?
Where
do
we
pick
that
payment
up?
If,
if
there
is
one.
H
A
I'll-
just
just
be
you
know,
of
course
I
guess
as
we
go
along,
we
know
that
you
know
our
our
payments
will
go
up,
the
our
we
don't
call
it
the
arc,
but
the
required
contribution
will
go
up
because
of
the
assumption
changes,
and
I
guess
in
that
calculation
sickly
would
be
a
very
small
piece
of
that,
but
it
would
be
in
there.
H
Yes
and
I'm
still
sort
of
holding
out
to
see
what
the
final
valuation
for
2021
does
for
future
budget
requests,
because
it
was
such
an
exceptional
year
with
returns
and
adding
over
five
billion
dollars
to
the
pension,
trust
alone.
It's
it's.
It's
going
to
have
quite
an
effect,
so
I
don't
want
to
get
ahead
of
the
actuaries
and
accountants
using
information
from
the
actuaries
about
how
future
budget
requests
might
go.
H
H
D
I
actually
have
two
questions,
so
let
me
get
this
right
so,
if
sick
days
were
paid
by
the
school
district,
when
the
teacher
retires-
and
it
was
not
rolled
into
their
last
year
of
calculated
salary,
the
commonwealth's
cost
of
sick
days
would
be
alleviated.
Is
that
correct,
correct?
Okay?
So,
with
the
with
the
we've
made,
two
different
legislative
changes
correct
that
so
when
do
our
sick,
the
commonwealth's
sick
days
go
away
or
start
to
go
away?
H
One
is
the
capping
sick
leave
at
300
days
for
individuals
who
become
members
on
or
after
july,
first
2008,
so
you're
not
going
to
see
any
immediate
effect
of
that,
because
you
know
only
people
with
longer
tenured
people
more
years
of
service
are
going
to
have
sick
leave
in
that
range.
But
at
one
point
yes,
that
will
help,
because
in
that
one
slide
we
showed
there
were
people
who
were
working
longer.
H
Our
longer
working
folks
had
sick
leave,
accruals
in
excess
of
300.,
the
biggest
change
and-
and
this
is
going
to
take-
you
know
more
a
little
more
time
to
have
effect,
but
is
house
bill
258,
which
sets
up
the
new
tier
for
individuals
to
become
members
of
trs
on
or
after
january,
1st
2022
and
their
sick
leave.
The
school
district
can
still
pay
for
it.
That's
important
because
we
get
that
question
a
lot.
H
The
school
district
can
still
still
compensate
them
at
30
percent
of
their
daily
rate
and
lump
sum
at
retirement,
but
that
lump
sum
payment
cannot
be
used
to
enhance
their
retirement
annuity.
It
can
be
rolled
over
into
a
savings
account
if
they
want
to
our
one
of
our
our
savings
account
for
that
new
tier
if
they
want
to,
but
the
commonwealth
is
walling
off
liability,
not
just
for
this
new
tier
group
for
well.
It's
for
all
benefits,
not
just
sick
leave.
Okay,.
D
D
So
it's
26,
probably
approximately
27
years
before
sick
days,
will
be
not
costing
the
commonwealth
correct.
Yes,.
H
You'll
see
it
a
little
earlier
in
that,
because
we
have
our
two
groups
of
people
who
become
teachers
that
are
the
folks
who
come
in
right
out
of
college
and
those
who,
surprisingly,
as
a
barbell,
those
who
come
in
later
in
life,
for
whatever
reason
they
were
doing
something
else
for
the
first
10
15
years
after
college
20
years.
H
Even
then
they
decide
they
want
to
come
back
to
teaching
and
so
for
those
folks
they
will
retire
with
less
than
27,
because
they'll
be
age
eligible
to
retire,
so
they
will
not
have
sick
leave.
You
know
used
for
their
time
calculation
purposes,
so
you'll
start
seeing
it.
You
know
a
little
earlier.
You
know
the
effect
of
there
being
no
sick
leave
for
retirement.
For
these.
For
this
new
tier
group,
okay,.
F
One
is
going
back
to
my
original
comment.
It
really,
I
think
your
numbers
will
bear
it
out
somewhere
between
seven
and
12
percent.
If
you
make
it
to
high
three,
even
if
you
don't
you're
somewhere
between
seven
and
twelve
percent
of
your
final
at
final
benefit,
payment
is
coming
from
your
sick,
sick
leave
conversion.
So
unless
you
can
pro
prove
to
me,
I'm
wrong,
let's
go
with
that
assumption.
F
Second
thing
is
related
to
who's
paying
for
it
is,
I
guess
my
question
is:
are
we
paying
for
this
on
behalf
of
the
school
district?
Historically,
like
we
do
the
fixed
rate,
or
is
this
only
a
state
obligation,
because
it's
in
the
statute.
H
It's
so
again
the
district
is
responsible
for
the
financial
lump
sum
finds
responsibility
for
that.
Lump
sum
payment
that
30
percent
at
retirement
and
the
state
by
statute
is
responsible
for
the
actuarial
cost
of
having
that
payment
applied
to
their
last
year's
salary,
for
retirement
calculation
purposes
and
and
to
your
other
question
represent.
I
don't
have
a
calculator,
but
it's
a
looks
like
with
a
high
three
with
sickly,
with
versus
without
sick
leave.
It's
about
a
twenty
eight
hundred
dollar
increase
in
their
retirement
annuity,
so
whatever
2
800
divided
by
38..
H
H
Okay,
these
rather
show
hypotheticals
a
range
of
values,
and
it's
more
illustrative
of
how
salary
sick
days
high
three
high
fives,
just
how
that
can
impact
retirement
allowances,
but
these
don't
actually
reflect
actual
accounts
and
and
and
some
of
these
numbers
we
may
not
even
find
in
some
of
our
accounts,
but
it
does
give
you
an
indication
of
the
interplay
between
various
factors
that
go
into
retirements
and
again
I'll.
Explain
what
this
shows
and,
on
the
far
left
column,
you'll
see.
H
Last
salary
we
were
asked
to
break
down
into
increments
of
last
salary
and
then
you'll
see
the
same
salary,
for
example,
at
the
top
left
hand,
50
500
and
we're
asked
what,
if
that
person
has
100
sick
leave
days.
206
days,
306
days,
we
were
asking
the
next
column
what
if
they
have
a
high
five
or
high
three
for
each
of
those
scenarios
leaf
payment
that
first
green
column.
There
is
zero,
because
this
is
in
the
box
that
assumes
no
unused
sick
leave
day.
So,
of
course,
there's
no
leave
payment
there.
H
So
you
have
leave
payment
here,
because
they're
getting
paid
for
their
unused
sick
days,
then
you
have
how
that
affects
our
final
average
salary
in
this
hypothetical,
how
that
would
affect
the
final
average
salary,
the
annual
benefit
and
percent
of
last
salary.
So
more,
let's
say
ulcerative
of
how
these
various
factors
the
interplay
about.
You
know
how
they
increase
based
on
these
hypotheticals
and-
and
that's
is
my
last
slide
of
my
presentation
and
as
always,
if
there's
questions,
I'm
more
than
happy
to
to
take
those.
A
Well,
thank
you
boat
and
one
of
the
things
that
myself
and
and
a
lot
of
members
in
the
general
assembly
and
the
public
don't
totally
understand
the
green
box
and
and
how
that's
all
operating.
So
today
was
a
it's
like
a
lot
of
things
in
in
retirement
system
and
and
other
things
that
are
clear
as
mud
sometime
and
the
more
you
hear
about
them,
the
easier
it
is
to
understand-
and
I
think
that's.
This
has
been
a
fairly
elementary
approach
to
look
at
the
green
box,
and
I
appreciate
your.
H
A
With
us
today
and
and
helping
us
to
better
understand
the
green
box
dollars
and
and
and
sick
leave
house
how
it's
financed
yes,.
H
A
A
G
A
couple
of
before
we
get
into
the
meat
of
it
a
couple
of
things:
you're
all
aware
that
house
bill
484
and
hospital
nine,
which
was
kind
of
fine-tuned
that
established
two
new
boards.
G
A
B
B
B
I'm
I'm
excited
to
work
with
dave
eager
and
his
executive
management
team.
Let
me
publicly
acknowledge
how
open
mr
eager
and
his
executive
team
have
been
to
me
to
help
me
get
acclimated
to
this
role.
I'm
more
excited
to
work
with
the
nine
extraordinary
members
of
the
cers
board.
They
are
exceptionally
talented
and
focused
on
protecting
and
growing
the
assets
of
the
cers
funds.
So
thank
you,
mr
chairman,
for
the
opportunity
to
introduce
myself.
I
look
forward
to
having
an
opportunity
to
speak
with
you
and
your
committee
in
the
future.
A
Thank
you
and
best
wishes
and
and
look
forward
to
working
with
you.
Thank
you.
G
G
I'm
going
to
refer
to
that
later,
what
it
says,
but
essentially
they
do
a
sampling.
They
validate
the
data.
That's
our
actuary
grs
is
already
presented.
They
opine
on
the
assumptions
and
in
siegel's
case
they
they
assume
they
made
statements
that
all
the
assumptions,
both
economic
and
and
demographic,
were
reasonable.
G
G
You
want
to
go
ahead.
Yeah
we're
gonna
we're
going
to
talk
about
the
implementation
implementation
of
hospital
eight,
I
would
say
to
begin
with
before
I
even
get
into
the
bullets
there.
This
was
a
critical
bill
for
us.
You
know
we
consider
it
one
of
four
initiatives
in
the
last
seven
years
that
really
put
this
system
back
in
good
order,
and
I
thank
repeatedly
because
there
was
a
lot
of
effort
that
was
put
into
this
representative
miller.
Representative
tipton.
G
I
believe
representative
duplessi
is
on
representative
wheatley
and
for
their
intentions
today
spent
a
lot
of
time.
Putting
this
together.
Educating
people,
we
got,
you
know
unanimous
votes
in
the
house
and
the
senate,
so
I
thank
all
those
who
voted
for
it.
It
was
critical.
We've
got
it
and
we're
going
to
talk
about
the
implementation
of
it.
G
G
Thank
you
too
four
points.
The
first
is
house
built,
eight
addresses
the
issue
of
a
declining
membership
and
and
therefore
declining
ability
to
capture
contributions
without
accelerating,
at
a
rapid
rate,
the
contribution
rate.
So
over
the
last
10
years,
our
active
membership
in
k9
has
is
declined
from
a
little
less
than
46
000
to
a
little
more
than
31
000.
That's
the
problem.
G
Employers
were
incented
to
outsource,
not
replaced
employees,
but
there
was
a
real
financial
incentive
to
do
that.
So
that's
number
one
number
two
is
the
actuary.
Actuaries
are
going
to
still
do
the
same
calculation
they're
going
to
come
up
with
an
aggregate
liability
and
aggregate
unfunded
liability
just
like
they
have
every
every
prior
year
that
doesn't
change
at
all.
What
does
change
is
the
method
to
pay
the
annual
expense,
so
we
will
have
a
continued
normal
cost
rate,
which
is
right
now.
10.1
normal
cost
is
the
cost.
G
That's
in
estimates
incurred
to
cover
the
liability
associated
with
what
people
earn
in
a
given
year,
so
we're
anticipating
the
10.1
times.
The
payroll
will
do
that.
That
should
gradually
go
down
as
more
and
more
people
are
in
tier.
Three
and
less
than
tier
one
and
two:
what
does
change
is
the
the
way
the
amber
the
amortization
of
the
unfunded
liability.
It
goes
from
a
percent
of
pay
to
a
dollar
amount
and-
and
essentially
we,
the
actuaries,
took
the
unfunded,
the
liability
to
unfunded
liability.
G
Let's,
let's
go
to
the
next
here's
an
example
and
we're
using
the
total
liability,
the
percentage
is
going
to
be
the
same,
whether
using
total
or
unfunded,
because
their
their
ratios
are
the
same.
Total
liability,
19.2
billion
we've
got
an
employer
whose
liability
is
2
million,
so
they
are
0.0142
percent
of
the
total
as
of
june
30th
2019.
And
why
did
we
use
june
30th
at
2019,
because
employers
were
continuing
to
lay
off
going
forward
and
we
wanted
to
draw
a
line
in
the
sand
and
say
it's
it
stops
here,
the
imp.
G
You
can't
get
any
more
impact
in
punch
past
june,
30th
of
2019,
so
here's
an
employer,
it's
0.01042,
if
the
in
fiscal
2022,
if
the
total
amortization
cost
is
a
billion
or
39
million,
we
apply
the
0.1042
to
that
and
we
say
that
employers
cost
for
that
year
is
108,
000,
108,
352.
G
and
the
next
year.
This
is
purely
illustrative.
Let's
say
it's
a
billion
o
20,
their
cost
is
going
to
be
160
thousand
dollars
and
then,
in
the
following
years,
a
billion.
Oh
55,
it's
going
to
be
109.,
and
so
why
does
the
1039
change?
Why
is
it
down
to
one
of
this
again?
It's
illustrated.
Why
is
it
under
102.0
or
up
to
105.5
experience?
G
So
if
we
have
favorable
experience
investment
experience,
which
we
are
definitely
likely
to
have
for
a
number
of
years-
that
that
amortization
cost
is
going
to
go
down
somewhat,
but
the
percentage
will
still
be
applied,
though
in
there.
In
this
case
the
01.
G
042,
so
there
is
a
there
is
an
appeal
process
in
the
bill
and
I'll
tell
you
what
they
can't
appeal
and
then
we'll
tell
you
what
you
can
appeal.
They
can't
appeal
the
methodology,
they
can't
say
well,
we
would
use
a
different.
We
wouldn't
use
entry
age,
normally,
we'd
do
something
else.
They
can't
cannot
appeal
the
assumptions
and
again
I've
said
we
had
a
june
30
2019
audit
of
our
of
the
2019
valuation.
G
Siegel
presented
that
to
our
board
in
december
of
2020,
and
he
has
said
essentially,
assumptions
are
reasonable
right
up
and
down
every
one
of
the
assumptions
was
reasonable
and
they
can't
appeal
their
portion
of
it.
They
can't
say
well,
we
are
you
know
0.1042,
we
are,
we
are
locked
in
with
a
rate.
What
they
can
appeal
is
they
can
get
a
list
and
we've,
given
this
list
and
rebecca's
going
to
go
into
much
more
detail.
G
They
can
say
that
person
we
are
not
the
last
employer
for
that
person.
You
know
statute,
says
whoever's.
The
last
employer
picks
up
the
pension
liability
for
that,
for
that
person
they
can
say
that,
wasn't
us
somebody
else
can
say
gee.
We
had
a
contract
with
the
executive
branch
where
we
were
had
that
person
on
our
payroll,
but
they
were
really
a
state
employee
and
that
liability
should
go
back
to
the
state.
We
got
some
examples
of.
E
G
Or
they
can
say,
look
they
were
you
know
mental
health.
The
state
took
over
contracted
to
have
these
mental
health
employees
and
but
we're
getting
assigned
the
liability
associated
with
them
so
they're.
Essentially,
there
have
the
ability
to
say
that
we
have
people
that
are
being
we're
being
charged
for
that.
Don't
belong
to
us.
So
that's
the
process,
we're
going
through.
G
Let's
pick
up
yeah,
let's
go
to
the
not
eligible
to
appeal,
so
we've
got
a
group
that
are
eligible
appeal:
we've
got
a
group
that
are
not
eligible
and
and
the
ones
that
are
not
eligible:
the
total
membership
for
those
people
in
the
legislative,
judicial
and
executive
branches,
91
534.
So
we
have
employers
with
that.
Many
members
who
are
not
eligible
to
appeal
and
that's
about
15
billion
plus
of
the
of
the
of
the
total
it's
about.
80
percent
of
the
total
cannot
appeal
those
that
can
appeal.
E
E
82
of
those
178
employers
requested
a
list
of
the
persons
who
make
up
their
liability
in
order
to
calculate
their
percentage
based
on
2019
of
those
82
47
employers
appealed
those
47
appealing
employers.
They
had
total
membership
of
26
000,
with
the
total
liability
of
two
point.
E
Left
off
on
mine,
okay,
two
point:
four:
what
they
appealed
was
50
189
members,
totaling
366
308
million.
E
So
what
did
they
appeal
on?
34
employers
appealed
227
members
as
not
their
last
employer,
so
for
whatever
reason
they
believe
that
employee
worked
somewhere
else
or
shouldn't
be
in
their
list.
They'd,
never
work
for
us
or
we're
going
to
talk
to
us
about
a
variety
of
reasons
they
have
for
that.
E
The
big
bulk
is
contract
with
exec.
Excuse
me,
the
big
bulk
is
the
previous
mental
health,
so
22
employers
with
399
members,
37
million
dollars
for
the
contract
executive
branch
and
then
the
big
one
is
that
it
was
a
state
mental
facility.
It
was
previously
run
by
the
state
is
almost
half
of
the
people
who
are
being
appealed.
E
So
we
broke
that
down
by
type
or
agency
classification.
Regional
mental
health
has
about
76
of
the
total.
Being
appealed
is
being
appealed
by
those
10
agencies
about
18
by
universities,
and
the
rest
of
it
is
is
made
up
by
the
others.
E
You
asked
for
a
list
of
some
of
the
concerns
or
the
issues
that
we've
come
up
against
you
asked
specifically
did
we
have
anything
that
we
thought
would
require
some
sort
of
legislative
correction,
and
no
is
the
answer
to
that.
There
are
a
couple
of
outstanding
kind
of
questions,
but
at
this
time
we
don't
think
there's
anything
that
will
need
legislative
changes.
E
One
of
the
biggest
issues
has
been
the
stuff
we
have
talked
about
a
couple
times
is
that
employers
are
asking
well
and
legislators
too.
How
do
we
know
the
liability?
Calculation
is
correct
and,
as
mr
iger
is
saying,
you
know
it
because
it's
not
unique,
it
is
not
a
new
calculation,
the
val
always
they,
the
actuary,
has
always,
for
years
and
years
and
years
calculated
a
specific
liability
per
person
and
then
aggregated
them
as
a
total
and
the
methodology
for
that
was
audited
by
siegel.
E
E
The
academy
american
academy
of
actuaries
requires
that
we
hire
another
actuary
to
audit
their
actuaries
every
five
years,
so
this
siegel
one
they
audited
the
2019
val,
which
is
perfect,
since
that's
the
one
that
that
was
used
for
these
percentage
calculations
and
it
audited
the
2014
to
2018
experience,
study.
G
E
And
what
they
found
was
that
they
were
happy
with
the
way
grs
had
done
it.
They
were
able
to
get
generally
within
less
than
one
percent
variation
of
their
calculations,
and
they
thought
their
calculations
were
appropriate.
Another
issue
that
we
have
had
we've
worked
with
several
employers
on
is
this
federal
funding.
E
The
writers
of
this
statute
were
very
aware
of
that,
and
the
employers
have
been
thankful
that
there
was
so
much
work
done,
pre-passing
this
bill
about
federal
funding,
so
we've
worked
with
that
list.
That's
on
there
ed
ross
spoke
to
the
omb
at
the
white
house.
Omb
and
ed
has
been
very
helpful
to
us.
We
appreciate
that
his
help
with
those
pieces
what
we
have
found,
especially
with
the
this,
is
not
this
employee
shouldn't
be
in
my
list.
This
is
not
my.
I
am
not
the
last
employer.
E
What
we
found
is
some
misunderstanding
of
what
the
list
ought
to
entail.
So
they
said
there
are
people
on
my
list
that
are
deceased.
They
shouldn't
have
liability,
they're
deceased,
well,
deceased
members
do
have
liability
because
they
have
beneficiaries,
things
like
their.
I
know
that
they
left
us
and
went
to
work
for
this
agency,
but
the
agency
that
they
think
they
went
to
work
for
doesn't
fall
under
kers
non-hazardous
because
it's
specific
to
the
kers
non-hazardous
liability.
E
E
So
this
lack
of
understanding
that
that
house
bill
8
did
not
assign
a
specific
liability
to
the
employers,
what
it
assigned
as
a
percentage
of
the
liability.
So
we've
had
questions
from
employers
who
want
to
know
if
I
paid
you
earlier,
could
I
avoid
some
interest?
Is
there
any
advantage
to
paying
you
earlier?
E
And
lots
of
questions
about
so
for
the
liability
that
I've
proven
to
you
shouldn't
be
mine,
because
it's
been
a
contract
with
the
state.
I
expect
my
liability
number
and
therefore
my
payment
to
go
down
by
exactly
that
amount,
but
because
their
liability
is
just
defining
the
percentage
of
the
defined
liability
for
the
year,
it's
not
going
to
be,
it
would
be
proportional,
but
it
won't
be
an
exact
match
for
that.
So
there's
been
some
misunderstanding
with
that.
E
E
I
can
give
you
that
information,
but
I
can,
I
don't
know
it
off
the
top
of
my
head,
but
I
can
send
that
to
you
later.
Thank.
E
Some
of
the
july
payments
were
late.
We
waived
penalties
for
that
new
process,
trying
to
get
all
this,
but
generally
people
are
paying
and
paying
on
time.
E
G
A
G
I
think
I
jumped
over
a
a
key
point,
and
that
is-
and
I
think,
I'm
speaking
to
this
fiscal
23
and
24
they
they
have
to
have
at
least
60
percent
of
the
their
workers
beyond
the
payroll
for
25
and
26
has
to
be
at
least
80
percent
and
and
and
thereafter
and
that's
the
or
they
lose
their
subsidies.
A
Thank
you
any
any
questions,
representative
miller.
I
I
don't
think.
F
He's
online-
or
I
don't
believe-
but
this
this
really
is
a
testimony
particularly
to
representative
duplessy.
He
he,
you
know,
sweated
blood
and
tears
and
sweat
all
that
on
this
bill,
and
I
think
he
did
an
outstanding
job
so
so
far
so
good.
Thank
you
all
for
your
presentation.
A
And
thank
you
all
for
the
process.
I
know
there's
been
a
lot
of
activity
on
this
and,
and
you
stayed
the
course-
and
it
sounds
like
we'll
get
this
all
resolved
and
you've
certainly
laid
out
the
criteria
that
everyone
needs
to
for
the
appeal
process,
and
you
have
you
have
several
appealing
and
I'm
sure
we'll
you'll
keep
us
informed,
as
those
appeals
are
are
dealt
with.
G
Yeah
and
our
our
employee
employer
reporting
group
that
deals
with
the
roughly
1500
employers
well
300
and
some
are
affected
directly
178.
I
guess
were
the
those
that
could
appeal
that
group
works
for
rebecca
and
she's
done.
An
excellent
job
and
they've
done
an
excellent
job.
I
mean
this:
is
they
all
had
out?
They
all
have
a
day
job.
As
I
say,
this
is
a
lot
of
work.
That's
been
piled
on
top
of
that,
but
we're
happy
to
do
it
because
we're
so
convinced
that
bill
was
necessary.
A
A
Okay,
we'll
we'll
look
for
that.
So
thank
you
all
see.
No
further
questions
entertain
a
motion
to
adjourn.