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From YouTube: Public Pensions Oversight Board (5-22-23)
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A
Is
one
o'clock
we'd
like
to
go
ahead
and
get
the
meeting
started
if
we
could
first
off
welcome
to
everyone?
That's
here
today.
I
would
ask
that
if
you
have
any
cell
phones
or
other
electronic
devices
that
might
squawk
at
us
during
the
meeting,
please
silence
those
and
at
this
point
I
would
ask
the
chair
to
Colorado
or
the
clerk
to
Colorado.
Please
Senator.
A
Having
a
quorum,
we
are
duly
constituted
to
connect
business
and
the
first
order
of
business
for
the
day
will
be
to
approve
the
minutes
from
the
April
24th
meeting
to
have
all
right.
Recommendation
for
approval,
have
a
motion
and
a
second
all
in
favor
minutes
are
approved,
and
the
next
item
on
business
is
to
hear
from
cers
concerning
Actuarial
experience
study.
If
the
presenters
would
come
forward,
please.
E
Thank
you
very
much
chairman
Johnson.
It's
with
great
pleasure
that
I'm
here
today
to
discuss
the
experience
study
conducted
by
the
County
Employees
Retirement
System.
My
name
is
Ed
Owens
I
am
the
chief
executive
officer
of
the
County
Employees
Retirement
System
with
me,
via
Zoom,
our
representatives
from
our
actuary
GRS,
Janie,
Shaw
and
Danny
White,
and
also
we
have
with
us
David
Lindbergh,
who
is
representing
Wilshire
wilshere,
has
been
since
2017.
Our
investment
consultant.
E
We've
gone
through
a
very
deliberative
process.
It
started
with
our
actuary
committee,
which
is
chaired
by
Mike
Foster
back
in
March
of
of
2022..
The
committee
then
initiated
the
idea
that
we
wanted
to
look
at
the
assumed
rate.
We
also
had
the
involvement
of
our
investment
committee.
Dr
Merle
hackbart
is
chair
of
that
committee
and
he
also
sits
on
the
Actuarial
committee
on
November,
2nd
of
2022.
E
The
actuary
committee
looked
exclusively
at
the
assumptions
and
the
forward-looking
return
expectations
for
our
plans.
We
met
again
on
April
12th
of
2023
to
go
over
the
same
process
so
for
two
complete
meetings.
The
actuary
committee,
who
took
the
lead
here
but
supplemented
and
helped
by
the
investment
committee,
looked
exclusively
at
return
assumptions
and
forward-looking
returns.
E
E
E
E
We
wanted
to
include
this
slide,
which
is
from
our
finance
committee,
because
we
wanted
to
ensure
that
the
committee
was
aware
that
we're
very
much
looking
at
funding
at
liquidity
at
our
net
contributions.
So
this
report
represents
our
pension
system.
E
The
total
outflows
or
total
inflows
for
both
the
non-hazardous
and
the
Hazardous
programs
for
fiscal
year
2023
are
greater
than
the
total
outflows.
So
there
is
a
net
contribution
to
our
plans
based
on
2022
to
fiscal
year.
2023
numbers
I'll
also
draw
your
attention
to
the
last
line
on
this
slide,
which
is
yield
as
a
percent
of
assets.
You'll
see
that
in
both
hazardous
and
non-hazardous
plans,
the
yield
as
a
percent
of
our
assets
has
fairly
substantially
increased.
E
Looking
at
the
insurance
plans
that
we
have,
the
insurance
plans
have
behaved
exactly
as
we
would
expect
an
insurance
plan
to
behave
that
is
over.
A
hundred
percent
funded
you'll
see
that
the
employee,
the
employer
contributions
for
fiscal
year
2023,
are
substantially
lower
than
they
were
in
fiscal
year.
2022.
E
E
The
Capital
Market
assumptions
and
David
Lindbergh
again
is
on
the
phone
and
I'll
ask
him
to
speak
to
some
of
this,
but
I
wanted
to
first
show
The
Board
what
the
forward-looking
assumptions
have
been
from
our
investment
consultant
you'll
see
that
in
general
they
believe
the
10
20
and
30-year
forward-looking
assumptions
are
extraordinarily
positive.
Going
forward
for
equity
for
fixed
income,
you'll
see
core
fixed
income
substantially
up
at
four
and
a
half
percent
cash
up
at
four
percent.
E
Those
were
numbers
that
would
not
have
been
present
had
we
been
looking
at
this
in
years
past
a
function
of
what's
happening
in
the
larger
economy
as
relates
to
interest
rates,
but
when
you
drill
down
on
this
and
look
at
our
current
policy
and
what
we're
doing
in
terms
of
how
we've
allocated
our
portfolio
the
return
assumptions
for
our
portfolio-
okay,
our
10-year
over
seven
percent
20-year
over
seven
percent
Thirty
Year
over
seven
percent.
E
Now,
one
of
the
things
that
you'll
see
when
we
look
at
our
experience
study
is
that
our
actuary
actually
looked
at
up
to
12
investment
Consultants
to
look
at
what
they
perceived
the
forward-looking
returns
would
be.
So
we
hire
Wilshire
to
work
with
us.
Here's
wilshire's
view
of
what
10,
20
and
30
years
will
look
like
for
our
plan,
but
the
actuaries
will
tell
you
that
of
the
12
investment
Consultants
that
they
looked
at
the
Wilshire
projections
are
almost
squarely
in
the
middle.
E
E
E
David,
can
you
hear
me:
okay,
I'll
I'll
continue
continue
to
walk
through
this.
What
the
efficient
Ed.
F
F
This
is
one
of
the
components
of
an
asset,
only
analysis,
not
a
full
asset
liability
study,
in
this
case
just
focusing
on
the
assets
but
plotted
along
the
frontier,
based
on
the
constraints
that
we
put
into
that
Frontier,
which
reflect
several
very
practical
things
in
terms
of
how
the
plans
might
allocate
assets.
That
line
is
a
line
that
shows
the
maximum
return
for
each
level
of
risk
that
is
taken
along
that
bottom
axis.
F
The
red
circle
is
the
current
policy
allocation,
which
runs
it
just
under
13
percent,
forward-looking
volatility,
so
standard
deviation
of
returns.
That
would
be
the
risk
level
in
this
case,
and
you
can
see
where
that
plots
in
terms
of
expected
return
around
seven
half
percent.
So
this
is
reflecting
forward-looking
over
the
next
10
years.
F
Level
of
expected
return
level
of
expected
risk
for
that
policy
allocation
and
the
in
the
significant
increase
that
you
referenced
relative
to
allocations
or
relative
to
assumptions
in
the
past
reflects
where
we
are
today
with
substantially
higher
interest
rates
than
a
year
and
a
half
ago.
F
The
second
thing
that
this
chart
also
shows
us
is
that
you
could
also
you
know,
reduce
risk
to
a
certain
degree
and
still
achieve
the
expected
returns
that
you
would
like
to
achieve,
so
that
we
will
dig
into
further
with
an
asset
liability
study
later
in
the
year.
F
But
this
gives
you
a
sense
of
how
just
that
asset,
only
efficient
Frontier
works
and
what
it
what
it
speaks
to
in
terms
of
risk
and
return
for
the
plan
assets
then,
and
then,
as
we
go
forward
from
here,
this
is
looking
back
over
one
three
and
five
years,
some
very
strong
statistics.
F
These
are
the
on
on
this
chart.
We're
showing
here,
are
the
pension
plan
assets
and
if
you
notice
on
that
first
chart
Untitled
return.
If
we
just
go
to
the
five-year
data
points,
the
pension
plan
in
total
has
had
a
6.29
percent
expected
return
over
the
trailing
five
years,
which
is
in
the
34th
percentile
of
this
universe
of
other
public
plans,
where
the
median
public
plan
returned
5.96
during
that
five-year
period.
F
But
more
importantly,
is
that
risk
level
to
the
second
chart
where,
over
that
five
years,
this
was
accomplished
with
lower
risk
than
most
other
plans,
a
level
of
risk
that
being
volatility
of
asset
returns
over
the
five
years.
At
nine
point,
one
nine
percent
was
in
the
sixth
percentile,
so
lower
risk
than
94
of
the
other
public
plans
in
that
universe
and
yet
accomplished
returns
that
were
better
than
roughly
two-thirds
of
those
plans
in
that
universe.
So,
looking
back
historically
very
strong,
risk-adjusted
Returns,
the
final
chart,
titled
sharp
ratio
is
exactly
that.
F
It's
the
risk
adjusted
measure
showing
that,
over
five
years,
a
measure
of
0.55
indicating
that
you
were
better
compensated
for
the
risk
that
you
took
over
the
trillion
five
years
than
93
of
other
funds
in
that
universe,
and
we
see
similar
results
for
the
insurance
plans.
You
could
see
very
similar
numbers
five-year
returns
in
the
38th
percentile
five-year
risk
level
in
the
fourth
percentile,
meaning
less
risk
than
96
percent
of
the
other
funds
in
the
plan
and
yet
higher
returns
than
62
percent
of
those
those
funds.
E
David.
Thank
you
very
much
for
sharing
that
information.
E
The
Actuarial
experience
study
I'll
turn
that
over
to
Danny
White
and
Janie
Shaw
as
everyone
on
the
oversight
board
knows,
KRS
78
784
would
require
our
system
to
conduct
an
experienced
study
before
we
determined
that
we
would
move
the
assumed
rate.
G
Great,
this
is
Danny
White
with
jbroder
Smith
with
me
is
Jamie
Shaw
Gabriel
Smith
Jamie.
Would
you
actually
be
interested
in
going
over
the
the
demographic
side
and
I'll
cover
the
economic.
H
Sure
it
looks
like
we're.
Gonna
actually
start
with
the
economic
assumptions
here:
okay,.
G
Well,
we'll
we'll
dig
more
into
the
economic
side
further
on,
but
there
were
a
number.
This
was
a
total
and
comprehensive
experience,
study
that
looked
at
all
the
demographic
assumptions
and
the
economic
assumptions.
It's
it's
all
the
Assumption
of
going
to
the
valuation.
G
So
as
a
reminder
in
the
valuation
process,
is
we
receive
valuation,
our
Census
Data
from
the
retirement
system,
every
member
who's
due
or
entitled
to
benefit
either
who's
currently
accruing
a
benefit
or
who
is
no
longer
an
active
member,
but
is
either
receiving
a
benefit
now
or
or
going
to
receive
one
the
future
when
they're
retirement
eligible
and
with
that
we
build
into
assumptions
a
number
of
economic
demographic
on
Behavior.
How
you
know
Investments
are
expected
and
performed
during
that
time
period.
G
Salary
increases
payroll
growth
and
that
so
with
that,
that
develops
a
liability
which
feeds
into
you
compare
to
the
assets
and,
ultimately,
the
the
contribution
rate
to
to
shore
up
or
how
do
you?
How
do
you
fund
that
difference
between
the
liability
and
the
assets?
But
with
that
on
the
price
inflation,
we
recommend
an
increase
from
two
three
to
two:
five:
the
investment
return
assumption.
G
We
said
we
recommended
6.5,
but
we
also
recognize
the
risk
that
if
the
board
wanted
to
stay
stay
put
at
six
and
a
quarter,
that
would
also
be
sensible.
The
the
cash
balance
interest
rate-
this
is
only
on
tier
three
members
6.75,
and
what
that
that
difference
recognizes
the
there's
a
four
percent
floor.
G
So
while
there's
no
minimum
or
or
no
bottom
on
the
investment
return
experience
on
the
cash
balance,
interest
credit
there's
a
four
percent
floor
that
they
won't
receive
anything
less
than
that.
So
there's
a
difference
there
and
then
we
make
other
assumptions
on
individual
salary
increases
that
they
get
through
their
career.
We
increase
that
at
certain
levels
and
then
the
payroll
growth
doesn't
impact
the
the
liability.
It's
more.
The
financing
you
collect
the
system
collects
contributions
as
a
percentage
of
payroll,
and
so
this
is
kind
of
your
Revenue
growth
assumption.
G
How
do
we
expect
that
payroll
to
change
over
time
in
collecting
contributions,
and
that
affects
how
the
unfunded
liability
is
financed?
Think
of
as
a
mortgage
or
any
other
type
of
debt,
you
know
on
a
business
debt,
you
project
out
your
revenue
and
how
how
that's
financed
next
page.
Please.
H
So,
on
the
other
side
of
things,
we
have
our
demographic
assumptions.
This
is
how
the
membership
of
cers
are
going
to
act
on
the
mortality
assumption,
we
increased
our
mortality
rates
and
to
refract
to
reflect
a
lower
life
expectancy
for
the
members,
and
this
is
based
on
actual
mortality
experience
for
all
of
the
members
of
kpp
kppa,
so
that
is
about
a
1.5
D
about
1.5
to
2
years
decrease
in
our
life
expectancy,
and
we
saw
higher
rates
of
termination
for
member
for
active
members.
H
As
far
as
Retirement,
we
saw
members
retiring
at
about
the
same
rate
in
about
the
same
age
as
they
were
at
the
last
experience
study.
So
no
change
in
that
assumption
in
a
smaller
or
less
material
assumption
is
the
disability.
We
slightly
decreased
our
rates
of
disability
for
our
active
members
as
well,
so
the
the
biggest
assumption
changes
there
was
that
mortality
and
the
termination,
the.
G
Thing
to
note
on
the
demographic:
if
people
you
know
on
this
committee
remembers
from
four
years
ago,
when
jira's
last
did
an
experience
study
was
in
2018.
There
were
a
lot
of
significant
changes,
especially
on
the
mortality
and
and
some
other
assumptions
that
really
increase
the
cost,
and
what
we
saw
here
was
this
is
more
of
a
confirmation
that
the
assumptions
that
were
used
still
remain
applicable
because
they
were
much
smaller
and
I
would
say.
The
big
one
is:
is
the
mortality
and
we've
gone
through
a
pandemic?
G
I
mean
it
was
really
a
pandemic
that
on
the
data
dependence
and
we're
still
we're
still
assuming
life
expectancy
is
going
to
improve
and
going
to
improve
in
the
future,
but
we've
kind
of
had
a
you
know.
Just
honestly,
it
was
a
setback
in
life
expectancy
and
it
we're
reflecting
some
of
that
reality.
You
just
can't
you
just
can't
completely
ignore
it,
but
we
don't
give
it
full
credibility
either.
That
was
set
on
9
years
experience.
We
had
three
post-pandemic,
which
we
factor
in,
but
we've
gotta.
G
You
know
you
think,
on
a
on
a
credibility
weighted
basis.
It's
let
you
know
about
a
third,
so
two-thirds
is
of
that
assumption
is
reflect
on
a
pre-pre-pandemic
assumption.
G
We
go
to
the
next
slide.
Let's
go
back
to
the
investment
returned.
You
know
this
is
this.
Is
the
most
subjective
assumption?
It's
also
one
of
the
most
important
we
focus
in
the
valuation
and
what
we've
our
principal
basis
is
more
forward-looking
than
historical,
and
if
we
go
to
the
next
slide
in
that
analysis
and
I
apologize
for
the
small
font,
there's
a
lot
of
data
in
here,
but
to
go
through
here.
G
We
look
at
the
assumptions
for
wilshires
in
there
wilshire's
number
five
on
the
list,
but
we
look
at
it
on
number
of
investment
Consultants.
We
look
at
it
when
they
publish
these
in
these
these
assumptions.
Some
of
them
note
hey.
These
are
more.
G
Like
short,
they
call
them
short
term,
seven
and
ten
years
and
more
longer
term,
which
is
20
to
30
years
and
how
things
are
look
how
how
the
expected
development
of
those
assumptions
are-
and
we
also
track
actually
from
year
to
year,
to
see
how
they
change
in
the
assumptions
and
what
we
saw
is
just
a
remarkable
increase
in
the
expectations.
G
That's
because
you're
at
a
new
starting
point
when
you
think
of
2022
interest
rates,
were
low,
you're
still
fighting
some
inflation,
but
you
know
it
was
by
by
and
large
on
the
yield
curve
and
the
interest
rates
have
dramatically
increased
much
of
a
driven
by
the
FED
in
in
this
last
I
call
it
12
18
months,
and
that
is
changing
the
forward-looking
expectations.
G
So,
while
the
last
18
months
haven't
been
favorable
investment
experience,
it's
set
me
up
forward
to
be
much
easier
to
recede,
to
earn
those
returns
and
by
and
large
your
you
know,
it
can
be
achieved
on
the
yield
on
a
yield
basis.
G
So
the
the
purpose
of
this
is
to
say
all
right:
we
you've
got
wilshere,
which
certainly
understands
crs's
investment
policy
better
than
anybody,
so
they
have
an
extra,
a
layer
of
expertise
but
based
on
on
just
Capital
Market
assumptions
or
Expectations
by
asset
class
of
others.
We
mapped
to
the
investment
policy
and
to
see
all
right.
G
We
want
to
know
kind
of
the
brain
kind
of
the
range
and
where
it
kind
of
gives
this
this
committee,
an
understanding
of
the
variance,
at
least
of
these
10
to
12
investment
consoles
of
what
their
expectations
are
going
forward,
they're
all
consistent.
They
all
went
up
and
the
so
I
to
us.
It
was
sensible
to
recognize
some
of
that,
and
you
know,
if
you
think
of
it
on
the
portfolio
experience.
The
portfolio
expectation
is
much
higher
where
they
increase,
maybe
one
or
1.2
percent.
G
One
other
thing:
that's
not
in
there
in
the
experience
study,
but
it's
in
the
statutes
of
the
board's
funding
or
the
funding
policy
how's
the
unfunded
liability
paid
down.
This
was
commented.
Grs
made.
The
comment
during
the
board
meeting
I
think
it's
worthwhile
to
comment
here
that
the
legislators
in
2020
modified
the
funding
policy.
While
it
was
reset
back
to
30
years,
it
was
also
put
in
20-year
layered
amortization,
so
any
new
gains
or
losses
that
occur
financed
over
a
closed
20-year
period.
G
In
our
opinion,
this
is
actually
a
much
stronger
funding
policy
now
than
back
in
2017,
when
the
assumed
rate
of
return
was
was
changed
from
six
or
change
to
six
and
a
quarter.
It
was
just
a
single
layer
dimerization.
So
that's
to
us
that
you
look
at
it
in
a
totality
basis.
I've
I
think
it's
in
a
better
spot.
G
We
go
to
the
next
slide.
I
think
we've
got
some
of
the
cost
impact
questions.
This
is
for
the
non-haz.
What
we
did
is
we
separately
showed
the
current
assumptions.
This
is
based
on
the
2022
valve,
so
it's
just
a
pro
forma.
It
doesn't
mean
that
the
actual
rates
are
going
to
go
down
to
to
that
for
July
1
2023
as
Ed
mentioned,
but
this
is
a
pro
forma.
How
would
the
rates
have
changed
so
you've
separately
identified?
Do
the
demographic
assumptions,
namely
mortality,
and
you
build
on
that.
G
G
We've
got
the
same
thing
actually
here
it's
the
the
discount
rate
makes
a
bigger
bigger
impact,
and
then
we've
got
both
as
a
percentage
of
pay
and
the
change
in
contributions.
It
would
be
26
million.
A
Well,
thank
you
to
each
of
you
for
your
presentations.
I
I
appreciate
the
depth
that
you've
gone
into
to
to
explain
your
process
and
I.
Clearly,
you've
put
some
thought
into
the
process.
I
will
probably
have
some
questions
here
as
we
move
forward,
but
I
would
open
that
to
the
floor
for
questions
auditor
Harmon.
We
would
like
to
start
with
you
thank.
I
You
Mr
chairman
Mr
Owen.
If
you
go
back
to
I
think
it
was
page
four.
The
historical
performance
I've
got
a
question
when
it
comes
to.
If
you
go
down
to
fiscal
year
2018
and
you
go
over
to
the
Actuarial
value
of
the
asset
and
the
funding
level
it's
listed
at
5.27
was
that
a
clerical
era.
E
I,
don't
believe
it's
a
clerical
error,
but
I
will
say
that
this
report
is
manually
put
together
there.
There
was
nothing
that
we
had
that
showed
the
historical
performance.
This
way
we
we
leaned
very
heavily
on
our
investment
office
to
get
together
the
returns
for
us,
but
I
I.
Don't
think
that
is
a
clerical
error.
I
think
the
10-year
in
that
Year
may
have
been
just.
I
E
A
Thanks,
sir
next
would
be
representative
bojanowski.
Please.
J
Thank
you,
I
haven't
been
here
for
a
while
forget
about
how
to
push
my
button
on
the
pension
contribution
report.
The
increase
in
the
member
contributions
is
that,
because
there
are
more
members
or
there
are
members
with
higher
pace,
so
it's
a
higher
percentage
of
their
pay,
not
a
higher
percent
a
higher
amount
because
of
the
percentage
of
their
pay
or
what
contributes
to
the
increase
in
member
contributions.
Thank.
E
You
very
much
for
the
question
I
believe
that
the
result
of
the
increased
member
contribution
is
simply
more
employees.
The
assumed
payroll
increase
from
GRS
is
two
percent,
but
our
experience
last
year
was
a
seven
percent
payroll
increase.
J
Okay,
thank
you
and
one
more
if
I
may
all
right,
so
it
really
kind
of
caught
my
eye
that
our
mortality
has
decreased
and
I
know
that
the
impact
of
covid
was
discussed
in
in
the
research
on
the
mortality.
Is
there
any
indication
that
people
you
know
they
call
it
long
coveted
and
it
impacts
you
over
time
is?
Is
there
any
indication
that
that
might
have
an
ongoing
impact
on
our
mortality
rights,
Jaden.
H
Sure,
I
guess
the
long
story
is
I
mean
we
don't.
We
will
say
that
the
you
know
the
mortality
rates
that
we
carried
and
we
did
see
higher
rates
mortality
over
the
last
three
years.
We
don't
necessarily
think
that
those
High
rates
of
mortality
are
going
to
continue,
but
we
did
want
to
reflect
that
in
our
mortality
rate.
So
we
did
look
at
nine
years
of
the
mortality
rates
for
the
kppa
retirees
and
beneficiaries,
and
we
did
use
that
as
The
credibility
for
our
analysis.
H
So
as
the
effect
of
long
coveted,
specifically
I
can't
speak
to
that,
but
we
are
projecting
those
low
those
higher
rates
of
mortality.
As
a
baseline
now,
I
will
say.
The
majority
of
experts
do
believe
that
a
mortality
Improvement
is
going
to
continue
into
the
future,
which
means
that
going
forward
that
mortality
rates
are
going
to
decrease,
and
that
is
an
assumption
that
we
continue
to
make.
G
Our
our
report,
it's
out
there
on
this,
the
kppa
website,
I,
believe
or
it
can
provide
you
wanted
and
what
we
did
is
we
actually
showed
the
the
mortality
just
the
raw
mortality
rate
by
year
for
the
last
six
years,
so
you
have
three
pre-covered
three
post
covered
and
to
me
one
of
my
personal
things
that
I
I
was
surprised
about
was
I
expected
I
started
to
expect
to
see
mortality
Improvement
in
this
last
fiscal
year
of
the
FY
2022,
and
we
didn't
see
that
and
I
it
could
be
some
of
the
long,
coveted
stuff
you
mentioned.
G
I
think
there's
other
things
that
I've
read
that
can
contribute
to.
It
is
during
covert
a
lot
of
people
put
off
going
seeing
the
doctor,
so
you
know
they
they
weren't
keeping
up
with
their.
You
know
either
diabetic
diabetes,
you
know,
maybe
they
had
some
some
problems.
You
know
either
cancer
or
otherwise
that
they
put
off
because
of
the
covid
that
they're
having
to
deal
with
now
that
that
impacts
mortality.
So
I
think
that,
in
in
response
to
your
question
about
long
covid,
I
think
it's
a
possibility
it
could.
K
Need
all
right,
thank
you.
I
I
do
I'll
make
a
comment
here
when
we
passed
General
Assembly
past
the
CER
separation
a
few
years
ago.
I
did
support
that
bill,
but
one
of
the
things
that
made
me
nervous
on
the
reservations
I
had
that
was
a
future
cers
Board
of
Trustees
would
change
these
assumption
rates.
D
K
K
K
Does
the
CRS
Board
of
Trustees
also
share
that
fiduciary
responsibility
to
the
retirees
and
members?
Absolutely
okay
just
want
to
get
that
out
there
as
I'm
reading
the
contribution
rates.
Of
course,
we
know
that
the
three
main
employers-
that's
c-e-r-s-
are
Kentucky
League
cities,
the
cities,
the
counties
and
our
school
boards,
and
there
are
some
I
think
the
state
has
the
cers
members
go
figure
that
but
of
course
it's
gonna,
it's
gonna
decrease
the
amount.
K
The
projection
would
decrease
their
contribution
amount
and
it
looks
to
me
I'm
added
up
the
the
figures
correctly
from
the
has
and
not
has
the
projected
rates.
They
would
have
a
decreased
contribution
of
103.82
million
dollars
per
year.
Now,
I
understand
that
the
funded
ratio
looks
better
because
of
the
increased
Actuarial
rate.
K
E
You
represent
Mr
chairman,
if
I
might.
E
Representative
Tipton,
thank
you
very
much
for
that,
and-
and
let
me
first
respond
to
the
5-3
vote
at
the
CRS
Board
of
Trustees
and
I
and
I
must
say
that
our
chairman,
Betty
Pendergrass,
has
done
a
tremendous
job
in
teeing.
This
issue.
Up
for
the
board,
I
was
very
happy
that
there
was
a
robust
discussion
about
what
we
were
doing
with
the
assumed
rate.
The
no
votes,
if
I
could
characterize
them,
were
not
that
we
weren't
seeing
the
data
that
we
saw,
but
that
we
maybe
needed
to
wait
a
little
longer.
E
It
was
a
timing
issue,
not
an
issue
of
whether
or
not
the
data
itself
supported
moving
forward,
but
that
robust
discussion
I
think
is
the
epitome
of
every
member
of
that
Board
of
Trustees
fulfilling
their
fiduciary
responsibility
to
the
members,
because
we
got
exactly
what
they
thought
and,
and
we
moved
forward
accordingly,
if
I
might
as
to
moving
to
six
and
a
half
percent
still
two-thirds
of
public
pension
plans
are
well
over
seven
percent,
not
well
over
seven
point
one
percent
in
terms
of
their
assumed
rate,
we
are
well
well
below
them.
E
The
risk
that
we
have
in
our
portfolio
as
David
Lindbergh
mentioned,
we've
received
outsized
returns
based
upon
that
risk,
and
given
this
and
the
asset
liability
study
that
we
intend
to
do
before
the
end
of
this
year,
we
believe
that
we'll
be
able
to
take
some
additional
risk
out
of
our
portfolio.
So
we're
we,
we
understand,
and
we
I
think
the
board
was
well
aware
when
we
teed
it
up
and
when
it
was
voted
upon,
that
there
would
be
some
level
of
controversy
concerning
it.
E
This
process
started
approximately
14
months
ago
and
all
during
that
time,
if
things
had
turned
around
people's
opinion
on
what
we
should
do,
may
have
changed,
but
it
did
not,
and
the
the
5-3
vote
occurred
and
I
am
very
thrilled
that
you
will
continue
to
watch
this
very
closely
because
I
I
wanted
to
say
in
the
opening
Mr
chair,
Mr,
chairman
and
I,
didn't
that
I
I
am
very
excited
about
the
oversight
provided
by
this
board.
You
make
us
better.
E
You
make
us
better
when,
when
I
first
testified
here
in
April
of
2022,
I
was
asked
a
question
by
auditor
Harmon
concerning
proxy
voting,
and
we
went
back
after
that
meeting
and
determined
you
know.
We
don't
have
that
as
fully
under
control
as
we'd
like
to
have
it.
So
we
started
working
on
that
the
day
after
that
meeting
to
correct
the
blind
spot
that
we
had
as
it
related
to
proxy
voting.
E
Subsequently,
House
Bill
236
passes
requires
that
we
do
that,
but
we're
in
a
position
now,
where
11
of
the
12
external
managers,
Equity
managers,
that
we
have
have
already
modified
their
contracts,
modified
their
agreements
and
we're
in
a
position
to
move
forward.
This
will
take
a
period
of
time
for
anyone
doing
it,
but
because
you
made
us
better,
we
were
well
ahead
of
that
curve.
C
C
C
E
This
is
what
is
apportioned
to
us
and
there
is
a
a
complicated
formula:
that's
used
to
determine
what
will
be
attributed
to
cers
and
what
will
be
attributed
to
KRS
some
administrative
expense.
We
split
50,
50
Summit,
some
administrative
expense
is
based
upon
assets
under
management,
and
some
administrative
expense
is
based
upon
the
number
of
members
that
we
have.
So
this
is
a
a
function
of
the
formula
that's
implemented
to
come
up
with
our
overall
administrative
expense.
C
E
I
I
would
say
that
we
have
250
to
270
employees
at
kppa
which
administers
this
program,
which
is
the
the
bulk
of
the
administrative
budget,
and
a
number
of
those
employees
are
responsible
for
member
attention,
so
we
have
as
an
umbrella
over
kppa
over
400
000
members.
There
are
a
number
of
members
that
have
things
claims
to
be
adjudicated
questions
to
be
answered.
E
There
are
a
number
of
people
that
need
to
be
in
place
in
order
to
do
that,
and
that
the
administrative
budget
is
in
fact
presented
to
this
oversight
board
on
a
annual
basis.
D
Do
thank
you
Mr
chairman,
and
thank
you
all
for
your
explanation,
but
I
guess
my
biggest
concern
is:
is
history
repeats
itself?
Yes,
sir,
our
pension
plans
are
in
the
Min
at
the
shape
they're
in
today,
because
of
underfunding-
and
there
are
several
here
on
this
board
on
the
center
Neil
representative
Graham
Arthur
Harmon.
We
were
here
in
that
2008
when
everything
the
wheels
run
off
of
everything
and
and
part
of
the
problem
when
we
started
looking
at
it,
wasn't
that
the
markets
performed
so
well.
D
It's
just
that
our
assumptions
were
out
of
line
return
rate
of
return
was
was
outlined,
assumed,
payroll
growth
and
it
was
almost
looked
like.
It
was
not
a
as
far
as
the
actuaries
were
concerned
that
that's
tended
to
be
what
what
was
done
across
the
country,
but
the
just
to
keep
the
rates
high.
So
you
can
keep
you
keep
the
assumptions
high,
so
the
rates
that
the
employer
was
paying
would
be
low
and
that's
what
put
us
in
the
position
we
are
in
now
and
and
we're
we're
we're
doing
the
same
thing
again.
D
We
struggled
here
the
last
few
years
to
raise
to
lower
those
assumptions.
We
put
a
lot
of
extra
money
into
the
pension
plans.
I
know
chairman
Petrie
and
chairman
McDaniel.
There
was
a
lot
of
extra
money
that
went
into
pensions
last
year,
not
necessarily
cers,
because
you're,
not
ours
anymore.
You
all
divorced
us
where
you've
moved
on,
but
in
in
a
state,
police
and
and
kers
and
and
TRS.
D
We
put
a
lot
of
extra
money
to
try
to
shore
those
pension
systems
up,
we
didn't
reduce
the
rates
or
the
increased
assume
rate
of
returns,
which
makes
it
look
better
on
paper,
but
I
guess
my
my
question
to
to
your
actuary
Danny.
D
When
you
make
this
recommendation,
did
you
look
at
the
the
funding
ratio
of
cers?
It's
not.
You
know
it's
not
a
fund,
that's
80
or
90,
or
even
100
funded.
Why
would
you
recommend
a
raise
in
the
assumptions
for
for
a
pension
plan?
That's
50
funded.
G
Yes,
sir,
it's
I
think
it's
a
valid
question
and
in
terms
of
the
funded
status
yeah,
there
was
some
consideration
given
in
that
I
actually
put.
You
know,
Genie
and
I
put
more
consideration
on
the
funding
policy
that
was
put
in
when
you
think
about
when
the
funded
ratio
is
was
when
those
those
difficult
decisions
were
made
in
2017
and
you
had
a
closed
funding
period.
G
It
was
a
single.
It
was
a
single.
It
started
off
as
30
years,
but
it
was
walking
down
to
you
know,
I
think
it
was
28
or
27
at
the
time
and
here
in
2020,
when
it
was
reset
back
to
30,
but
you
put
in
the
20-year
layered
amortization
in
some
ways.
We
consider
that
an
improvement,
because
any
new
gains
or
losses
are
going
to
be
amortized
over
a
much
faster
period.
So
if
there's
so,
the
contribution
rates
are
going
to
react
quicker.
G
G
So
in
that
regard
we
fail
like
and
we
believe
it's
a
stronger
funding
period
or
funding
position,
so
it
seems
sensible
to
to
take
back
some
of
that
that
other
conservatism
you
know
I
I,
haven't
used
it
in
a
while,
but
I'm
going
to
go
and
refer
to
belts
and
suspenders
that,
if
you
think
of
your
assumptions
as
part
of
your
part
of
your
you
know,
the
assumptions
is
part
of
your.
You
know
your
funding
strategy
and
you
got
your
funding
policy.
How
quickly
you
pay
back
the
unfunded
liability
as
the
other.
G
You
know
it's
it.
You
know
it's
like
having
a
belt
suspender,
you
can.
You
can
wear
both,
but
do
you
actually
need
both?
G
G
I
say
that
and
we're
really
counting
on
the
legislators
or
not
or
the
general
assembly,
and
not
not
changing
or
or
modifying
that
amortization
policy
to
to
weaken
it
or
reset
it
back
to
30
by
hold
it
to
where
it
is
because
you
know
I've
seen
a
lot
of
systems
across
the
country
and
if
you
look
at
the
ones
that
are
stronger,
it's
not
the
ones
that
have
the
best
assumptions
or
the
the
most
conservative
assumptions.
Actually,
the
ones
that
have
the
strongest
funding
policy
and
yeah
assumptions
go
into
that
on
the
payroll
growth.
G
And
you
know
you
mentioned
the
assumptions
But
continuing
to
reset
that
30-year
funding
policy
was
was
also
a
detriment
to
the
funding
period
of
CRS,
and
we
did
a
stress
test
report
back
in
a
few
years
ago,
2020
or
2021,
and
we
identified
that
was
one
of
the
most
significant
risks
for
CRS.
Was
this
continuation?
If
if
the
funding
period
was
reset
every
five
years
or
six
years
back
to
30
years,
that
would
that
was
actually
the
most
detrimental
and
I.
D
I
think
this
is
a
a
setback
for
us
to
get
to
100
funding
as
soon
as
we
can
so,
hopefully,
you'll
reconsider.
E
And
thank
you
very
much
Senator
Higdon
for
for
that
comment,
and
certainly
the
board
as
they
watch
this
oversight.
Meeting
we'll
hear
that
and
I
certainly
will
communicate
your
sentiment
as
as
part
of
this
oversight
board
to
them.
But
if
I,
if
I
might
on
that,
representative
Tipton
indicated
that
the
change
in
the
contribution
rate
would
decrease
employer
contributions.
E
Around
100
million
dollars
are
there
about,
and
we
would
like
to
think
that
much
as
we
saw
with
the
insurance
portfolio
as
we
got
over
100
funded
and
were
able
to
reduce
significantly
the
contribution
rates
for
employers
that
we
believe
that
that
led
to
the
employers,
actually
turning
that
money
back
into
hiring
additional
employee
employees
and
and
being
able
to
pay
to
keep
the
strong
employees
that
they
had
I,
believe
that
some
of
that
is
what
the
state
of
Kentucky
did
over
the
last
year
and
a
half
by
increasing
employee
salaries
over
15
percent.
E
You
want
to
be
able
to
make
sure
that
you're
able
to
keep
the
best
talent
that
you
have
and
and
the
the
cities
and
and
counties
are
no
different
and
need
to
be
able
to
do
it.
But
it
wasn't
done
for
that.
It
was
done
based
upon
our
total
review
of
all
of
the
documentation
and
almost
all
of
that
documentation,
we've
presented
in
front
of
this
board
today
and
it
it
it
speaks
to
a
forward-looking
and
we
are
long-term
investors.
E
It
speaks
to
a
forward-looking
prospect
of
returns
that
are
significantly
higher
than
600
six
and
a
half.
A
Is
that
anything
else,
and
if,
as
we
wrap
up
I
would
I
do
have
a
couple
comments
and
questions?
My
first
question
and
I
open
this
up
to
anyone.
You
may
need
to
get
back
to
me
on
this,
but
without
these
rate
changes
what
is
the
anticipated
date
where
we
would
be
100
funded?
E
My
my
guess
on
that
is
is
night
in
48
Danny
in
2048.
Is
that
the
the
Year
yes.
G
Yeah
it
the
change
in
the
assumptions
it
that
goes
back
to
your
funding
policy.
You
have
a
you,
have
a
policy
if
you
have
an
unfunded,
that's
going
to
be
paid
in
a
certain
date
and
that
and
the
longest
tier
that
or
the
longest
launcher
layers
that
existing
unfunded,
that
that
was
sitting
on
the
books
in
2020
and
that
is
currently
on
a
27.
This
next
year
will
be
on
a
27
year
funding
period.
So
it's
about
2048,
2049,.
A
A
All
right,
thank
you
for
that
I
I
would
just
I
wasn't
clear
on
that.
So
I
appreciate
that
I
want
to
go
back
to
the
process
that
you
guys
have
gone
through
and
I
appreciate
that
you've
had
a
very
steady
process
on
this,
but
I
was
curious.
You
do
have
an
Actuarial
subcommittee,
correct.
E
The
Actuarial
committee
did
not
make
a
recommendation
to
the
full
board
and
there's
there's
a
reason
for
that.
This
committee
and
the
actuary
committee
is
made
up
of
three
individuals
and
the
normal
course
of
governance.
For
us
and
most
other
institutions
is
that
a
committee
will
make
a
recommendation
to
the
full
board
for
ratification.
E
This
issue
was
of
such
great
import
that
it
was
the
committee's
determination
that
they
did
not
want
to
make
a
recommendation
to
the
full
board
and
I
believe
and
and
I
I'm.
Only
speculating
here,
I
believe
that
that
had
to
do
with.
When
you
make
a
recommendation
for
ratification,
there
is
a
inherent
tilted
bias
toward
whatever
that
recommendation.
Is.
E
It
may
only
be
slight,
but
I
believe
the
committee
itself
determined
that,
because
this
was
such
a
weighty
issue,
that
each
of
the
nine
members
based
on
their
own
individual
fiduciary
responsibility
needed
to
come
to
this
fully
cognizant
of
what,
in
fact
they
were
voting
on
and
their
up
or
down
vote
would
make
a
difference
in
terms
of
the
decision
made
by
the
entirety
of
the
board.
A
Okay,
I
would
I
would
think
that
actually,
that's
the
purpose
of
a
committee
is
to
provide
input
and
I,
don't
want
to
say,
take
a
committee
take
the
full
board
in
One,
Direction
or
another,
but
at
least
provide
their
input.
Otherwise
what
he
had
that
committee
for,
but
that's
a
conversation
for
another
time.
We
do
have
a
couple
of
other
questions:
Senator
Carroll,
if
you
would,
if
you
have
a
question.
M
Thank
you,
Mr
chairman
I.
Do
you
spoke
a
little
bit
about
the
the
issue
of
timing?
I,
don't
know
that
there
are
many
economists
who
would
disagree
with
the
statement
that
we
are
facing
a
recession.
Soon
talk
a
little
bit
about
what
happens.
Should
that
fall
into
place
next
year
the
following
year?
Will
you
all
be
ready
to
turn
right
around
and
increase
the
assumptions.
E
Absolutely
we
would
and-
and
that's
why
this
is
reviewed
on
an
annual
basis,
because
we're
making
the
very
best
determination
that
we
can
based
upon
the
most
recent
and
up-to-date
information
that
we
have.
M
But
what
is
your
message
going
to
be
to
the
retirees
that
haven't
had
a
cola
in
what
15
years,
some
many
are
getting
more
elderly
now
and
relying
strictly
on
a
pension,
many
that
did
not
pay
into
Social
Security
or
will
draw
reduced
Social
Security?
What's
your
message
going
to
be
to
them?
That's
you
know
that
I
think
that's
important
in
this
discussion.
Well,.
E
Senator
Carol,
thank
you
for
for
that
question
and
I'll.
Take
that
question.
First.
We
understand
that
anything
related
to
a
cola.
We
are,
there
are
only
two
conditions
under
which
cers
can
do
that.
The
first
would
be.
If
we
are
a
hundred
percent
funded,
we
are
not.
The
second
would
be
if
the
general
assembly
were
to
actually
indicate
that
we
should.
Then
we
would
so
one
of
those
two
things
would
have
to
occur
before
we
could
consider
it.
E
I,
don't
believe
that
it
that
it
will
I
think
the
the
forward-looking
projections
of
not
only
the
investment
consultant
that
works
with
us
and-
and
let
me
say
that
I
am
tremendously
impressed
by
the
work
that
has
been
done
by
the
Wilshire
group
and
the
work
that
has
been
done
by
GRS.
These
are
Best
in
Class
professionals
and
they're,
both
looking
and
using
the
best
information
available
to
determine
a
forward-looking
analysis
that
has
been
done
for
40
or
50
years.
E
It's
only
in
the
light
of
what
may
or
may
not
occur
in
the
near
term
that
some
might
be
given
pause
about
the
the
wisdom
of
moving
our
rate
now,
but
we're
we're
looking
at
what
we
see
and
basing
our
decision
on
that
as
opposed
to
what
may
occur
in
the
broader
economy
over
a
period
of
time,
which
we
will
have
an
opportunity
within
12
months
to
reevaluate.
If
that
in
fact
does
occur,.
A
Thank
you,
Senator
Carol,
chairman
Petrie.
Thank.
N
You
Mr
chairman
I,
think
I've
heard
some
of
the
same
sentiment
from
Senator,
Higdon
and
and
Senator
Carroll
and
even
representative
Johnson
I'm,
not
sure
that
I'm,
seeing
the
benefit
to
the
retirement
participants
adjusting
the
Assumption,
especially
on
the
rate
of
return,
even
if
your
actuaries
and
I
don't
dispute.
This
say
that
well
with
this
change
and
with
future
changes
we're
within
our
time
frame
of
reaching
100
funding
that
this
won't
delay,
that
I
think
we're
all
else
consistent
and
held
steady.
N
A
hundred
million
not
going
into
the
pot,
will
not
hasten,
whereas
if
it
did
go
in
the
assumptions
remained,
then
it
may
hasten
the
timetable
for
reaching
100
funding,
which
would
seem
to
the
benefit
psychologically
and
physically
to
the
participants.
I
would
really
ask
that
the
that
the
governing
body
seriously
consider
what
actual
Advantage
there
is
to
the
participants
in
the
retirement
system
and
the
hastening
of
the
full
funding
of
that
retirement
system.
N
A
Thank
you
and
I
would
just
re-emphasize
that
I,
don't
I
don't
want
to
Pal
on,
but
I'm
going
to
Pal
on
a
little
bit.
We
have
gone
through
a
few
years
ago,
a
very
painful
process
to
get
our
assumptions
to
where
we
are
getting
the
fund
healthy.
Yes,
sir,
we
will
be
very
concerned
about
anything
that
takes
away
from
that
100
effort
to
get
that
fund
healthy.
A
It
just
feels
like
it
does
that
so
I
would
just
Echo
for
the
third
or
fourth
time
now
that
we're
very
concerned
about
what
we're
doing
here
we
would.
Hopefully
we
hope
that
you
will
look
at
this
again
very
carefully
with
the
long-term
benefits
of
your
employees
in
mind.
I
hope
that
makes
sense.
L
A
At
this
quite
a
while,
but
you
made
a
comment
mentioned
something
I'd
like
to
just
touch
on
you
mentioned
when
you
were
talking
about
proxy
voting,
that
you've
got
11
of
the
12
and
management
funds.
Is
that
the
right
term?
For
that.
A
E
That
12th
group,
thank
you
for
that
Mr
chair,
where
we're
running
we're
going
to
have
to
structurally
change
part
of
our
agreement
with
that
12th
group
and
we're
in
negotiation
with
them.
Now
as
to
how
we
change
that,
because
it
relates
to
are
not
actually
owning
some
of
the
underlying
stock
and
that
so
we've
got
to
materially
change.
It
we're
talking
with
them
about
how
we
do
it.
E
But
we're
also
looking
on
the
off
chance
that
we're
not
able
to
come
to
an
agreement
in
a
timely
fashion,
how
we
pivot
and
and
achieve
the
same
goal
with
another
manager.
E
A
A
A
O
Alrighty
I'll
go
ahead
and
get
started.
I
will
try
to
be
as
brief
as
possible.
O
Hopefully,
you've
got
all
your
questions
out
with
the
last
presentation,
but
today
what
we're
going
to
talk
about
is
when
we
look
at
our
retirement
projections
and
all
the
Retirement
systems
are
required
to
project
costs
out
into
the
future.
One
of
the
big
questions
that
it
often
comes
up
is
how
much
of
the
general
fund
our
state
tax
dollars,
are
we
going
to
have
to
expend
for
this
purpose
and
kind
of
before
I
begin
I
just
want
to
thank
our
budget
staff.
O
Some
people
think
I'm
on
budget
I
am
not
but
Zach
Ireland
who's
sitting
back
in
the
back.
He
really
doesn't
want
to
be
recognized
his
incredible
what
he
does.
He
has
spreadsheets
that
dim
the
lights
around
here.
He
does
a
great
job
in
his
partner
Perry
papka
and
Liz
Columbia
and
Seth
Dawson
on
the
education
side
that
deal
with
these
Pension
funds
from
a
budget
perspective.
Do
an
incredible
job
and
I
will
just
tell
you
a
lot
of
what
we
have
here
today
is
because
of
their
efforts
as
well
too.
O
So
that
being
said,
just
very
briefly,
we're
going
to
look
at
all
six
of
our
state
administered
retirement
plans,
certainly
kers
sprs,
which
are
administered
by
the
KRS
board
cers,
which
is
now
administered
by
the
CER
sport,
Teachers,
Retirement,
Systems,
and
certainly
the
lay
legislative
and
judicial
plan
administered
by
jfrs.
O
When
we
look
at
retirement
costs,
we're
a
little
bit
of
an
anomaly
in
that
we
have
both
pension
and
retiree
Health
Combined
in
our
Pension
funds,
and
so
when
we
look
at
numbers
when
you
look
at
these
contribution
rates,
that
Mr
Owens
went
over,
there's
a
contribution
to
pension
the
contribution
to
retiree
health
and,
in
the
case
of
TRS,
there's
actually
a
contribution
for
life
insurance
as
well
too.
For
that
benefit.
O
So
the
purpose
of
what
we're
trying
to
do
today
is
certainly
not
to
talk
specifically
about
the
next
two
years
of
the
budget
in
August
September.
You
will
have
folks
come
in
and
have
their
projections
as
they
you
know,
kind
of
lean
towards
this
2023
valuation.
Really.
What
we're
trying
to
do
today
is
look
at
long-term
trends
and
product
projections.
Are
they
going
up?
Are
they
going
down
and
just
as
some
reference
point,
there
is
a
lot
of
things
that
have
changed
over
the
years
that
have
come
out
of
the
ppob.
O
As
far
as
when
we
look
at
things
like
this.
First
and
foremost,
all
the
Retirement
systems
are
now
required
to
have
30-year
projections
in
their
valuations.
That
was
a
ppob
recommendation
several
years
ago.
So
one
of
the
nice
Parts
is
we
can
pull
those
valuations
up
and
look
at
those
costs.
Now
it
doesn't
always
give
us
a
general
fund
cost,
so
that's
kind
of
the
the
difficulty
we
have
in
trying
to
figure
out
what
it
means
from
a
budget
perspective.
O
Secondly,
we're
also
in
process
as
we
hit
towards
the
end
of
the
year.
All
these
Retirement
Systems
will
be
finishing,
starting
on
their
2023
actuary
evaluations,
which
will
finalize
their
upcoming
budget
requests
and
there's
two
things
that
are
kind
of
big.
You
know,
certainly
the
experience
that
will
come
from
FY
23
and
then
another
thing
that's
come
out
of
this
oversight
board
has
been
some
consistency
in
evaluating
assumptions.
All
of
our
retirement
plans
over
history
have
done
what's
known
as
an
experience
study
that
you
just
saw
from
cers.
O
The
rest
of
them
will
be
coming
in
either
through
their
valuation
or
later
in
the
year,
but
they
all
have
to
review
their
economic
assumptions
once
every
two
years
and
their
demographic
assumptions
once
every
five
years
in
the
case
of
cers
today
it
was
everything,
demographic
and
economic.
So
that's
the
other
side
of
it
we're
looking
at
long-term
trends,
because
we
know
that
the
numbers
that
are
probably
closest
to
us
when
they
come
from
this
next
valuation
will
be
a
little
bit
different.
O
O
It's
most
some
of
them-
it's
not
very
much
at
all
or
honestly
non-existent,
so
to
kind
of
see
that
interaction
just
to
talk
about
it
a
little
bit
and
certainly
again,
those
costs
include
pensions,
retiree,
health
and,
in
the
case
of
TRS
life
insurance
and
then,
lastly,
we'll
approximate
some
general
fund
costs
for
the
applicable
systems.
As
we
look
forward,
I
will
say
this
is
not
a
perfect
science,
particularly
as
it
relates
to
k-e-r-s-c-e-r-s
or
spr
in
particularly
kers,
where
you
have
general
fund
federal
funds,
trust
and
agency
accounts.
O
O
So
when
that
last
thing
I
had
on,
there
was
talking
about
that
the
variability.
Now
there
is
a
lot
of
data
on
this
sheet
and
we
are
not
going
to
walk
through
all
of
it,
but
this
is
just
to
kind
of
show
a
little
bit
of
the
volatility
and
things
that
can
change
very
quickly.
When
we
talk
about
our
Pension
funds,
so
looking
over
at
the
right
hand
side,
you
know
we
have
a
pension
cost.
We
have
a
retiree
Health
cost.
If
you'll
look
at
look
at
the
top
kers9
has
in
2018.
O
That
fund
was
36.4
percent
funded
with
a
1.5
billion
dollar.
Unfunded
liability.
Look
to
the
far
right,
then
there's
no
79.1
percent
funded
374
million
dollar
unfunded
liability,
big
dramatic
reduction-
and
if
you
look
at
Ker's
hazardous,
172
percent
funded
now,
State
Police,
100,
funded
cers9
has
132..
C
has
101.
O
So
we
had
a
big
jump,
big
change
that
significantly
reduces
unfunded
liabilities,
which
has
an
impact
on
cost.
So
if
you
were
to
you
know,
I
will
tell
you
two
years
ago.
Somebody
said:
when
will
we
be
100
funded
in
some
of
these
I
would
have
said:
5
10,
15,
20
years
down
the
road.
Well,
guess
what
it's
today
would
not
have
anticipated.
So
there
are
things
that
change
State
Police.
O
If
you
look
on
the
pension
side
between
2021
and
2022,
you
know
you
have
that
215
million
dollars
of
general
fund
Appropriations
that
went
in
and
that
fund
went
from
30.7
percent
funded
to
52.5
as
those
stats
improve
or
deteriorate
that
changes
the
amount
of
money.
That's
ultimately
going
to
have
to
be
paid
into
these
funds,
and
so
this
is
just
you
know,
to
see
some
of
this
data,
but
to
also
understand
at
the
end
of
the
day,
our
unfunded
liabilities
are
our
costs.
We
are
not
a
place
where
we're
paying
normal
costs.
O
This
is
just
something
to
you
know:
I,
like
new
stuff,
I've
seen
people
do
these
box
plots
I
like
them,
but
this
is
just
to
kind
of
give
us
an
idea
of.
Where
is
our
unfunded
liability
at,
and
so
you
can
kind
of
see
from
a
standpoint,
particularly
as
it
relates
to
the
state
budget.
We
have
two
big
ticket
items:
kers
non
has
and
TRS.
O
Cers
is
largely
not
a
budgetary
issue.
The
only
thing
we
have
there
is
we
have
the
circuit
clerks
that
are
in
the
judicial
branch
budget
who
transferred
from
kers
to
cers
back
in
1996,
and
so
we
appropriate
some
monies
for
them
to
pay
their
cers
non-hazrate.
There
are
no
cers
hazardous
general
fund
contributions
and
then
you'll
see
that
small
purple
group
down
at
the
bottom.
O
That
is
largely
kers
and
sprs,
but
so
you
can
just
gives
you
an
idea
that
and
then
just
looking
on
the
right,
you
can
kind
of
see
our
combined
retiree
Health
obligations.
It
just
gives
you
an
idea
of
the
variability
of
where
we're
at,
but
also
that
it's
improved
I
would
have
never
expected
to
say
we
have
0.6
billion
combined
unfunded
liabilities
for
retiree
health.
It
was
much
much
more
when
you
go
back
to
2007-2008.
It
was
bigger
than
the
pension
side.
O
So
what
are
we
going
to
do
today?
As
far
as
showing
some
projections
we're
going
to
show
you
some
projections
through
2050.
we're
going
to
look
at
the
total
employer
cost,
which
means
all
employers
all
funds,
try
to
estimate
some
of
that
general
fund
component,
we're
using
the
June
30
2022
data,
except
for
lrp.
They
do
a
biennial
evaluation,
so
we're
using
the
2021
and
like
I
mentioned,
the
percentage
of
general
fund
varies
by
System
I'll
talk
about
the
simple
ones
first
in
general,
but
lrp
JRP
are
all
general
fund
sources.
O
I
will
tell
you
their
current
projections
through
2050
and
the
time
frame
we're
looking
at
is
zero
every
single
year
for
TRS.
It
is
pretty
heavy
on
general
fund,
particularly
as
it
rates
to
the
pension
side.
O
We
do
on
behalf
payments
in
the
KDE
budget,
so
you'll
go
the
education
side
and
you'll
see
an
appropriation
to
KDE
there
and,
as
many
of
you
all
know,
about
2007
2008
2009
and
that's
for
the
fixed
statutory
rate
that
fixed
statutory
rate
was
no
longer
sufficient
to
pay
off
those
unfunded
liabilities,
and
we
are
now
making
an
additional
adec
contribution,
which
is,
on
top
of
that
directly
to
TRS
to
help
pay
down
that
unfunded
liability
and
then
certainly
for
kers
and
sprs.
O
What
we're
going
to
do
as
far
as
projections
is
just
try
to
use
our
24
numbers
and
I
will
say
for
kers,
it's
become
more
difficult
to
look
at
and
only
because
of
House
Bill
eight,
not
that
house
bill.
8
is
bad,
but
we
are
now
providing
Appropriations
more
Appropriations
to
quasi-governmental
entities
into
K
nkers
to
help
pay
the
bill.
So
one
of
the
big
questions
we
have
a
staff
is:
will
that
continue
in
the
future?
Will
it
not
we're
actually
going
to
look
at
it?
O
I
won't
go
through
a
lot
of
this,
because
I
think
I've
hit
all
of
this
in
general.
This
is
the
hey
make
sure
you
tell
them
what
you're
doing
and
the
budget
staff
the
we
they
will.
They
like
to
be
particular
about
numbers,
and
so
this
is
kind
of
the
warnings,
if
you
will
I
think
I've
hit.
All
of
those
Zach
am
I.
O
Okay,
all
right,
good
trust
Zach
on
that
one,
but
we'll
go
ahead
and
kind
of
move
into
this,
and
so
the
first
honestly
Mo
almost
entirely
our
general
fund
costs
are
going
to
be
eating
up
about
95
percent
from
kers,
non-hazardous
and
TRS,
and
this
is
just
to
kind
of
give
you
an
idea.
So
the
big
blue
boxes
or
columns
that
you
see
there
are
the
projections
that
come
from
the
Retirement
Systems
for
the
next.
You
know,
25
years
plus
here
as
far
as
everything
that
they're
projecting
to
receive.
O
The
red
is
without
any
subsidies
to
those
quasi-governmental
entities
which
were
paying
in
excess
of
100
million
dollars
of
subsidies
right
now,
and
the
blue
is
if
those
subsidies
continue
in
a
relatively
same
share,
if
you
will
so
in
these
examples,
we're
looking
at
roughly
around
43
general
fund
with
that
red
line,
52
percent
general
fund,
with
that
blue
line
there
and,
as
you
can
kind
of
see,
we're
roughly
estimated
at
589
520
589
million
right
now
as
we
move
forward.
Certainly
those
policy
decisions
will
come
up
about
houseboat
subsidies.
O
You
will
probably
notice
that
that
number
comes
down
and
then
goes
back
up
to
a
very
similar
level.
That
is
where
I
talked
about
that
health
insurance.
You
may
remember
Danny
with
GRS
talking
about
our
20-year
tranches.
Well,
a
lot
of
this
is
essentially
that
game
that
we
got
from
that
Medicare
eligible
premium
that
we're
going
to
get
for
20
years,
and
then
it
pops
back
up.
O
If
you
will
and
then
you'll
see
at
the
very
end
there,
where
we
have
the
drop
off
when
the
unfunded
liabilities
are
to
be
exhausted
or
be
paid
off,
if
you
will
and
we
move
more
towards
that
normal
cost
scenario
for
reference
purposes,
just
as
far
as
total
cost
I
just
show
down
at
the
bottom,
what
did
we
pay
total
dollars
all
in
from
all
employers
all
fund
sources?
In
2000
and
2010?
You
can
kind
of
see
192
million
238
million
2000
2010.
O
O
O
One
of
the
things
that
they're
certainly
experiencing
you
may
remember
in
the
ppob
a
couple
years
ago,
they
had
an
experience
study
in
general
I
think
it
was
around
three
billion
dollars
of
additional
unfunded
liability
between
all
of
their
funds
and
the
board.
Their
board
made
a
decision
to
smooth
in
the
impact
the
cost
to
the
employer
over
a
five-year
period
in
2021.
That
was
also
coincided
with
really
good
investment
returns
in
2021..
O
Certainly
2022
was
not
was
the
opposite
of
2021
as
far
as
investment
returns
are
concerned,
and
so
we
are
seeing
a
growth
in
that
contribution
rate
as
we
move
forward,
but
also
in
relationship
to
payroll
growth
and
other
things
in
there
as
well
too,
so
their
cost
is
growing
in
terms
of
dollars
in
general
fund
dollars.
O
So
we
just
left
kers9
has
where
we're
looking
at
43
or
sorry,
yeah,
40,
42,
43
to
50,
plus
percent
on
general
fund
costs
in
terms
of
the
pension
side,
it's
about
94
general
fund
when
we
get
to
it.
O
So
the
other
thing
I
need
to
talk
about
is
the
TRS
retiree
Health
fund,
you've
heard
Beau
Barnes
talk
about
shared
solution
that
was
passed
in
2010
that
raised
employee
contribution
rates.
School
districts
started
contributing
the
state,
it's
contributing
additional
money.
Technically,
that
fund
is
receiving
more
than
the
ax
readily
determined
contribution.
It
is
projected
to
be
fully
funded
by
2030,
but
there
is
not
really
a
mechanism
to
unwind
that
when
it
gets
fully
funded,
so
I
did
ask
for
general
fund
projections
from
TRS
and
because
there's
not
a
specific
unwinding.
O
O
So
this
is
the
pension
side
of
the
equation,
and
you
can
see
that
in
fy25
total
contributions
coming
in
of
1.3
billion,
1.2
of
which
is
general
fund.
You
can
see
that
kind
of
sharper
turn
as
those
costs
for
those
assumption.
Changes
are
smooth
in
the
employer
rate
and
it
continues
up
above
2
billion
capping
out
at
2.7
billion
of
which
2.5
is
projected
to
be
general
fund
cost
in
2043,
and
then
you
can
certainly
see
like.
O
O
O
So
last
of
all,
this
is
just
kind
of
showing
you
everything
collectively
together
the
blue
is
kers
non,
has
the
Orange
is
TRS
and
the
green
is
everybody
else
which
that
is
largely
kers,
hazardous
and
State
Police,
so
I
don't
have
much
more
I
hope
that
was
short
and
sweet,
but
I
will
take
any
questions
if
you
have
them.
D
O
J
J
A
You
know
representative
a
lot
of
people
had
that
question.
Nobody.
O
O
L
Thank
you.
Thank
you.
Mr
chairman
just
Brad
in
case
you
maybe
have
the
historical
knowledge.
I
like
this
at
the
at
the
bottom
on
the
TRS
employer,
cost
graphic
where
it
said
for
reference
purpose:
fiscal
year.