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From YouTube: Public Pension Oversight Board (11-22-21)
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B
B
A
And
I
am
here,
thank
you
and
we
will
get
started.
I
will
say
sarah
beth
gregory
welcome
and,
of
course
you,
auditor
harmon
is
a
non-voting
member,
but
we
do
encourage
you.
If
you
have
any
questions,
please
let
the
chair
know
and
we'll
happily
hear
those.
A
So
if
we
could
before
we
get
started,
we
could
vote
on
last
week's
minutes
and
have
an
approval
of
those
minutes.
Please,
from
october
19th
we've
got
a
motion
in
a
second
all
approved
all
right,
like
sign
I'll
approve,
so
we
do
approve
those
minutes.
So
getting
into
that,
we
are
going
to
start
with
bo
craycraft
if
you're
ready
bo
and
he
is
the
executive
director
of
the
judicial
retirement
system,
but
we'll
let
you
introduce
yourself,
sir.
G
Sorry
about
that
good
afternoon,
my
name
is
beau
craycraft,
I'm
the
executive
director
of
the
judicial
forum,
retirement
system
hope
this
finds
everyone
well
and
ready
for
the
thanksgiving
holiday.
It's
good
to
be
here
with
you
all
got
a
short
update,
a
couple
slides
to
start.
We
were
asked
to
provide
return
and
cash
flow
information.
G
G
Moving
past
the
current
the
past,
the
most
recently
completed
fiscal
year
of
2021,
the
first
quarter
of
2022
was
relatively
flat.
The
s
p
500
was
only
up
just
under
half
a
percent
actually
had
pretty
decent
returns
in
july
and
august,
but
september
saw
most
of
those
gains
taken
back
as
inflationary
concerns
and
concerns
with
future
growth
continued
to
kind
of
rise.
G
With
regards
to
our
two
plans,
as
of
september
30th
for
the
three
months
ending
first
quarter
of
the
fiscal
year,
both
plans
slightly
underperformed
the
planned
benchmark.
They
were
up
about
20
to
25
basis
points
for
that
three-quarter
per
or
three-month
period.
However,
if
you
look
over
a
10-year
14
and
a
half
percent-
and
it
was
nine
and
a
half
9.3
percent
for
the
28-plus
year
since
inception,
so
that's
just
to
give
you
a
little
update
post
june
30.
G
Slide
two
or
three
is
the
cash
flow
information
for
fiscal
year
end
as
compared
to
the
prior
12-month
period
ending
june
30
of
2020.
G
You
can
see
that
the
net
cash
flow
before
asset
gain
losses,
which
is
that
gray
shaded
line
negative
cash
flow,
actually
increased
a
little
bit
year
over
year,
but
most
of
that
is
due
to
the
fact
that
our
request
for
employer
contributions
declined
as
a
result
of
the
2019
valuation.
So
you
can
see
in
that
second
line
item
that
contributions
from
2020
to
2021
declined
that
accounts
for
most
of
the
negative
cash
flow
increase,
which
is
kind
of
expected
for
plans
that
have
healthy
funding
levels.
G
You're
not
going
to
ask
for
as
much
money
today
and
then,
as
we
talked
about
you,
can
see
just
the
unrealized
realized
gain
asset
gain
losses
from
2020,
which
was
a
fairly
modest
year
to
2021.
G
G
G
G
New
assumptions
were
adopted
as
a
result
of
an
experience
study
that
was
conducted
in
october
of
2020,
though,
that
experience
study
was
approved
in
april
of
2021,
and
those
new
assumptions
were
put
into
place
for
this
valuation
modest
changes,
except
for
the
mortality
assumptions.
That
was
the
most
material
change.
G
The
other
key
change
is
that
they
also
revise
the
return
assumption
for
the
cash
balance
tier
of
benefits.
G
G
G
G
Partial,
that's
a
lot
due
to
just
the
term.
Limits
are
shorter.
With
regards
to
legislators
on
the
judicial
side,
it's
still
heavy
with
the
tier
one
or
what
I
would
call
legacy
members.
A
lot
of
our
judges
are
eight
plus
year
limits,
so
the
turnover
there
is
just
not
quite
as
high.
We
do
have
a
you
know,
a
fairly
big
election
year
coming
up
at
the
end
of
2022.
G
Every
single
one
of
our
judges,
except
two
will
be
up
for
a
re-election,
so
I
expect
to
see
this
chart
change
as
we
go
forward,
but
moving
to
the
left
side
of
the
slide.
This
is
the
information
that
most
folks
are
interested
in
funding.
The
funding
statistics
are
on
the
top.
Half
contribution
levels
are
on
the
bottom
half
in
both
cases
across
both
plans
or
all
four
plans:
pension,
health
for
both
j
and
l.
You
saw
funding
levels
improve
and
you
saw
the
requested
employer
contribution
decline,
as
we
mentioned
earlier.
G
G
You
know,
20
percent
of
those
gains
were
actually
realized
in
this
current
valuation,
and
so,
when
you
look
at
projections,
you're
going
to
see
those
asset
gains
continue
to
be
recognized
which
is
going
to
help
again
push
funding,
assuming
that
all
of
our
other
assumptions
continue
to.
We
meet
all
of
our
current
assumptions.
G
Jrp
is
just
under
95
and
but
again
the
the
the
a
deck
or
the
actuarial,
determined
employer
contribution
did
decline.
With
regards
to
that
plan
from
just
over
seven
million
to
just
under
5
million.
G
Now
I
will
note
there's
one
oddity
that
you
probably
recognize
pretty
quickly
on
this
slide
and
that
is
with
regards
to
the
legislative
retirement
pension
plan.
It
is
fully
funded,
but
there's
still
an
a
projected
a
deck
or
an
employer
contribution.
G
It's
a
bit
of
an
oddity
and-
and
it's
you
know
when
we
provided
our
preliminary
budget
requests,
we
we
preliminarily,
thought
it
was
going
to
be
zero.
G
In
my
public
comments,
I
said
I
thought
it
could
potentially
be
slightly
above
that
and
that's
with
regards
to
the
way
that
our
plan
recognizes
and
amortizes
any
unfunded
liability,
or
in
this
case
you
have
a
surplus
of
actuarial
assets
and
it's
it's
a
it's
a
mathematical
oddity
but,
as
you
can
see
on
the
bottom,
half
of
that
slide,
the
recognition
of
the
asset
surplus.
Doesn't
the
one
percent
plus
interest
doesn't
quite
cover
normal
cost.
So
there's
a
very
small.
G
G
B
You,
mr
chairman,
bo
appreciate
you
being
here,
and
I
know
we've
had
this
conversation
in
the
past
last
two
or
three
budget
cycles.
The
general
assembly
has
chosen
not
to
put
the
additional
funding
in
the
legislative
retirement
plan,
but
based
on
these
numbers,
is
it
accurate
to
say
that
has
not
negatively
impacted
the
situation
with
that
plan.
G
I
think
that's
accurate,
and
a
lot
of
that
is
due,
I
mean
a
lot
of
that
is
due
to
the
outsize
investment
returns.
Sure
you
know
in
a
normal
world.
I
didn't
expect
us
to
earn
15
a
year
for
the
last
five
years,
which
is
double
the
actuarial,
assumed
rate
of
return.
G
But,
yes,
the
funding
level
has
continued
to
to
grow,
and
so
and
as
you
can
see
now,
the
funding
request
is
effectively
zero
yeah
and
unless
something
changes
with
regards
to
investment,
return
or
benefits,
I
don't
expect
hope
not
to
see
that
increase.
Okay,
thank.
A
You
and
I
do
have
one
question
for
you:
bo
the
percent
funding
for
the
health
plans
at
272
and
362
percent.
You
mentioned
that
there's
some
reductions
in
your
the
requested
amounts.
Does
that
include
health
or
is
that
just
pension.
G
G
That's
an
interesting
question,
and
actually,
during
our
evaluation,
the
presentation
at
our
most
recent
board
meeting
findlay,
who
is
our
third
party
actuary?
They
actually
made
an
interesting
note
that-
and
this
is
more
specific
to
the
hybrid,
but
with
regards
to
the
hybrid
members
in
both
of
our
plans,
the
the
normal
cost
is
eight.
It's
like
88
basis
points
and
they're
paying
in
one
percent,
so
it
effectively
has
a
built-in
over-funded
component
to
it.
G
So,
to
answer
your
question,
they
would
say
at
a
minimum,
there
should
be
0.88
being
contributed
to
the
hybrid
cash
balance
insurance
versus
the
1
that
those
members
are
paying.
Now.
With
regards
to
our
plan
prior
to
the
cash
balance,
all
of
our
judges
paid
all
of
our
judges
and
legislators
paid
five
percent
up
until
2008.
G
A
Okay,
so
in
in
your
recommendations,
housekeeping
request
that
you're
getting
ready
to
go
over,
I
don't
believe
you
addressed
that
overpayment.
It
might
be
something
I
think
you
guys
should
consider
to
add.
I'm
not
saying
you
should,
but
I
think
that
should
be
talked
about
it's
quite
over
funded
and
that's
coming
from
the
from
the
taxpayer
themselves.
A
G
No,
I
I
appreciate
that
when
I
actually
initiated
the
housekeeping
bill
that
I
didn't
know
that
information.
Yet
that
was
during
our
october
board
meeting,
but
we
would
it's
an
active
discussion
that
was
held
at
the
board
meeting,
and
so
I
don't
you
know
again
that
one
percent's
being
paid
by
the
member,
I
don't
think
any
member
would
complain
if
we
reduced.
You
know
the
amount
being
withheld
from
there
their
their
their
payroll.
A
Fair
enough,
okay,
continue
on.
Please.
G
The
last
slide
is
just
speaking
to
housekeeping.
We
have
three
primary
housekeeping
items
that
we
would
like
to
request,
one
of
which
is
the
amortization
policy,
and
we
we
touched
on
that.
This
is
not
a
new
topic.
This
is
something
that
my
predecessor,
donna
early,
was
working
on
prior
to
her
passing,
you
know,
quite
frankly,
our
current
statutes
have
a
fairly
dated
model,
one.
G
It's
a
one
percent
of
the
current
surplus
or
unfunded
amount
plus
interest
for
that
given
year,
so
we're
effectively
only
capturing
or
recognizing
1
100th
of
any
surplus
or
deficit
in
a
normal
model
without
excessive
asset
gains.
G
So
we
would
like
to
move
to
an
approach,
that's
very
similar
to
what
the
kppa
plans
are
utilizing
in
trs.
It's
a
it's
a
base
approach,
and
it
would,
it
would
include
layers
in
the
event.
A
plan
fell
below
100
funded,
and
so
it
would
be
closed
if
you
had
a
base
of
20
years
and
then
in
our
case,
if
the
plans
are
open
above
100,
you
can
recognize
kind
of
a
larger
percent
of
that
excess,
and
you
would
not
have
a
situation
like
you
have
with
lrp
plans
where
you're
still
asking
for
money.
G
When
you
have
a
surplus
of
six
and
a
half
million
in
assets
projected
that's
the
only
aspect
of
the
housekeeping
bill
that
would
have
an
actuarial
impact.
We,
of
course,
would
have
it
reviewed
by
findlay.
Our
third
party
actuary,
but
our
expectation
is
there
would
be
a
probably
a
modest
increase
on
the
on
the
jrp
side,
because
it
does
have
an
unfunded
liability
and
we
would
be
amortizing
a
slightly
larger
percent
of
that
than
one
percent
on
the
lrp
side.
G
G
The
second
item
is
with
regards
to
administrative
expenses.
This
is
something
that
the
plan
is
is
currently
we're.
Currently,
operating
we've
changed
the
way
that
we're
handling
administrative
expenses.
This
was
something
that
was
initiated
prior
to
my
arrival
in
the
past,
jfrs
had
asked
for
a
general
appropriation
above
and
beyond
the
arc
for
the
purposes
of
administrative
expenses
a
couple
years
ago
that
was
kind
of
revisited
with
current
language.
G
That's
on
this
on
the
statute
and
also
in
the
budget
bill
and,
and
so
the
plan
has
started,
to
build
administrative
expenses
into
the
valuation
process.
This
is
more.
This
is
consistent
with
how
the
other
plans
operate,
and
so
the
administrative
expenses
are
being
paid
out
of
the
trust.
G
On
a
pro
rata
basis,
based
on
membership,
we
would
like
to
just
add
some
language
that
clarifies
how
we
actually
request
that
money
we're
effectively
requesting
access
or
we're
requesting
authority
to
spend
trust
dollars.
But
given
the
fiduciary
nature
of
our
trustees,
they
just
would
like
to
have
the
clarity
that
hey
we're
going
to
request
this.
This
is
how
the
process
is
going
to
operate
and
again
it's
consistent
with
how
we're
doing
business,
so
it
would
just-
and
it
will
align
statute
with
what
we're
doing
we're
trying
to
we've.
G
Actually,
using
language,
I
think,
is
very
similar
to
the
kers
kppa
language,
so
it
would
be
consistent
with
what
you
all
have
seen
and
kara61
and
then
the
last
item
is
just
some
additional
cleanup.
With
regards
to
krs
chapter
6
and
21.,
we
have
a
few
sections
that
still
have
some
language
that
has
since
been
voided.
It
creates
some
confusion,
especially
with
members,
but
also
just
internally.
G
You
know:
jfrs
has
fully
turned
over
their
staff
in
the
last
18
months,
and
so
there's
some
newbies
that,
don't
quite
remember
all
the
old
statutes,
and
so
we
would
just
like
to
do
some
cleanup
to
revise
and
just
have
the
current
statute
reflect
what's
current
law,
and
so
those
are
the
three
primary
items
we're
totally
open
to
the
information
you
discussed
with
regards
to
the
health
insurance.
We
possibly.
G
G
We
would
love
for
the
ppob
to
consider
this
as
a
recommendation
that
they
adopt
in
their
annual
report,
we're
very
thankful
that
I've
been
able
to
initiate
a
conversation
with
co-chair
higdon
and
we're
working
on
a
bill
draft
that
we
hope
that
we
can
share
at
some
point
and
again
we
would
have
that
scored
by
our
actuary
for
sure,
although
we
we
don't
expect
there
to
be
a
material
impact
for
either
of
our
plans.
G
A
Welcome
mr
eager,
if
you
would
thank
you
announce
yourself
for
the
for
the
record.
H
H
I
wish
we
had
those
returns,
but
we
had
great
returns.
We
had,
we
had
record
returns
fiscal
21,
the
overall
return
for
the
all
the
assets
and
kppa
was
25.1
percent.
We
it
ranged
from
22-6
in
the
k-9
has
to
25-6,
and
the
c-non
has
so
it
was
a
a
great
year.
H
I
warned
in
an
earlier
meeting
if
you
look
at
a
25
percent
return
in
the
5
or
6
assumption.
We
got
20
to
20
19
to
20
percent
over
the
assumption.
We've
had
a
year
in
the
past,
where
we
had
27
below
the
assumption.
So
there's
two
tails
on
this.
We
were
fortunate
to
be
on
the
on
on
the
proper
tail
this
time
and
it's
it's.
It's
and
other
things
have
allowed
some
pretty
favorable
trends.
H
We
have
10
out
of
10
pension
and
insurance
plans,
having
contribution
reductions,
10
out
of
10
insurance
and
retirement
plans
having
increased
funded
status,
so
we're
20
for
20,
and
that
year
the
25
year
went
a
long
way
toward
making
that
happen.
But
but
I
also
reflect
back
on
the
fact
that
I
call
it
the
one
two
three
four
step
and
I
give
the
legislature
a
lot
of
credit
for
this
2014
senate
bill
2
created
the
full
funding
requiring
the
arc
to
be
paid.
It
also
set
up
tiers,
3.
H
2017.
Our
board
approved
assumptions
that
made
funding
levels
rise
rapidly.
Steeply
canine
has
one
up
70
and
we
got
the
money
to
do
that
and
then
in
the
2021
general
assembly
we
got
house
bill,
8
pass,
which
was
critical.
I've
repeated
this
so
many
times.
I
see
it
in
my
sleep
and
you'll
see
the
benefit
from
that
as
we
go
through
these
as
we
go
through
these
numbers.
So
I
thank
you.
I
want
to
remind
you
of
the
cycle.
H
The
actuaries
are
using
june
30th
2021
data,
so
we're
starting
with
fiscal
2021.
If
you
will
we're
presenting
to
you
in
november,
the
grs
provided
that
valuation
to
us
at
the
last
day
of
october
you're
getting
it
in
november
statutes.
Our
boards
have
already
reviewed
them
in
november
and
they'll
vote
on
in
december
and
they'll
take
effect.
The
new
rates
will
take
effect
july
1
of
2022,
so
it'll
be
fiscal
and
for
the
k,
it'll
be
fiscal,
23
and
24
for
the
c
it'll
be
fiscal
23..
H
So
it's
kind
of
a
funny
cycle,
but
that's
the
that's
the
way
it
worked.
I
encourage
any
of
you
to
call
me
with
any
questions.
You
have
we're
going
to
get
into
some
complicated
things
and
we're
going
to
get
into
some
handouts
where
I
can't
cover
everything.
My
number
is
502.
H
And
please
call
me
if
you've
got
if
you
have
questions
as
as
a
follow-up.
So
let's
start
with
the
good
news
20
to
21
to
25
percent
returns.
The
21
was
the
state,
the
25
as
the
k
as
the
cu9
has
and
and
all
of
the
essentially
all
the
insurance
plans.
So
we
better
beat
our
five
and
a
quarter
rate
for
k9
has
in
the
state
police
pensions
and
we
beat
six
and
a
quarter
for
the
other
eight
plans.
H
We
got
800
902
million
more
than
we
expected.
So
if
you
said
all
right,
five
and
a
quarter
six
and
a
quarter,
what
are
we
going
to
earn?
We
earned
that
plus
another
902
million
dollars
and
556
of
it's
for
the
pension
and
and
I'm
talking
about
k9
has
now
556
of
it's
for
the
pension
and
336
for
the
insurance.
H
As
you
know,
we
don't
take.
We
take
20
percent
of
that
each
year
for
the
next
five
years,
so
we'll
only
see
20.
The
impact
of
20
of
that
will
see
the
impact
of
the
other
80
over
the
next
four
years
and
and
it's
layered.
So
we
actually
have
five
experience.
Tranches,
if
you
will
right
now,
this
is
a
big
one,
the
most
recent
one
and
there
are
much
much
smaller
ones
that
will
go
off
over
time.
But
so
it's
not
we're
not
quite
gaining
20
percent
of
of
a
902
million.
H
This
is
a
grs
government
and
I
would
echo
it
it's
imperative
that
we
need
to
maintain
or
increase
the
contribution.
Effort
for
k-9
has
it's
actually
it's
just
over
three
billion
dollars
in
assets.
Now
I
remember
when
it
was
1.9
and
I
remember
we
were
paying
out
a
billion
in
in
distributions
and
benefits,
and
people
were
saying
well
you're
going
to
go
broke
in
two
years.
H
Well,
we're
not
going
to
go
broke
in
two
years
because
we're
getting
contributions
and
we're
getting
greater
contributions,
but
nonetheless
we're
paying
out
a
billion
dollars
on
a
three
billion
dollar
fund
contribution
rate
for
2023
is
going
to
be
1.129
million,
so
we'll
be
in.
We
will
be
expected
to
be
in
positive
cash
flow
by
about
100
million
dollars.
H
Here's
the
the
problem
that
we've
had
that
we've
solved
largely
not
entirely,
but
the
declining
active
membership
count
in
the
k-9
has
plan
in
fiscal
21.
It
was
down
4.8
percent
over
the
last
10
years.
It's
averaged
4.3,
so
it
didn't
let
up
yet
it,
but
it
didn't
have
the
impact.
It's
not
going
to
have
the
impact
on
us
that
it
would
have
had
in
the
past.
A
No,
the
the
well
the
membership
count
yeah.
H
H
Hundred
or
I'm
here
yeah,
I'm
glad
you
reminded
me
there
there
is
an
incentive.
I
guess
it
can't
be
anything
more
than
it's
funny,
but
to
get
the
workforce
up
to
60
on
payroll
for
the
next
two
years
and
then
up
to
80
percent
and
the
the
penalty
for
that
is
you'll
lose
those
agencies
that
get
subsidies
from
the
state
will
not
get
the
subsidies,
so
they
don't
have
to
get
there,
but
they're
strongly
incented
to
do
that.
Yeah.
H
Thank
you
for
reminding
me
and
again,
there's
not
a
disincentive
to
hire
it'll
be
normal
cost
only,
which
is
up
a
little
less
than
10
percent.
Now
that
big
liability
is
frozen,
so
here
are
the
new
contribution
rates.
Let
me
walk
across
to
pension
insurance,
both
add
up
to
previously
10.10.
I
think
that's
stuck
in
a
lot
of
people's
minds.
H
The
2021
val
says
it's
going
to
be
9.97
down
modestly,
and
across
the
board
they're
coming
down
33
to
31
146
to
140..
We
don't
calculate
a
rate
for
k-9
housing.
The
longer
we
calculate
a
dollar
amount,
and
so
the
amortization
of
the
pension
is
going
to
go
from
920
million
down
to
906
and
the
insurance
is
going
to
go
from
103
down
to
88..
H
H
Let
me
we've
pretty
well
hit
the
rates.
Let
me
drop
to
the
bottom
of
this
page.
The
the
liability
going
from
2020
to
2021
k9
has
declines
from
16
349
to
16
321.
the
asset,
the
actual
asset
value
has
risen,
so
we're
going
for
an
unfunded
liability
of
14026
to
13
585.
H
we're
going
from
14.2
percent
to
16.8,
and
they
I
I
repeat
this
all
the
time
this
is
like
paying
off
a
mortgage
each
year.
Early
on
biggest
part
goes.
The
interest.
Smallest
part
goes
to
the
principal,
but
it
begins
to
get
larger
each
and
every
year
you
may
have
seen
a
number
of
18.5
in
the
media.
That's
the
gasby
number
gatsby
looks
at
market
value,
it
doesn't
phase
in
gains
and
losses
like
the
actuaries
do.
So,
if
you
look
at
the
purely
on
a
market
value
basis,
we're
at
18.5.
H
State
police
cost
goes
from
1
to
27,
to
1
126
on
pensions,
on
insurance,
18
down
to
14..
The
total
cost
goes
from
757
or
the
unfunded
goes
from
7
57
to
7
30..
So
we've
gone
from
28
1
to
30.7.
H
H
If
we
get
all
the
assumptions
and
you
can
see
down
below
the
contributions
continue
about
flat
for
the
next
28
years
and
then
the
unfunded,
the
amortization
cost
goes
to
zero
in
2049
the
normal
cost
grad
graduates
down
again,
it's
9.99
it'll
graduate
down
to
something
below
five
percent
in
the
year
2049..
H
So
the
discussion
has
happened
in
the
past
and
we're
happy
to
have
it
sometime
in
the
future
about
do
you
use
at
some
point
in
time?
Do
you
start
to
do
what's
called
the
glide
path,
and
that
is
begin
to
reduce
the
amortization
cost
before
2049,
but
carry
it
out
longer
than
2049,
but
we're
a
long
way
from
being
in
a
funded
position
where
we
can
do
that
quite
a
long
ways.
H
H
It
doesn't
matter
much
because
the
we've
locked
in
on
that
unfunded
liability,
so
this
is
non
has
this
is
looking
at
changing
the
discount
rate
from
five
and
a
quarter
to
four
and
a
quarter
or
up
to
six
and
a
quarter
for
retirement
and
down
one
from
six
and
a
quarter
to
five
and
a
quarter
for
insurance.
In
the
the
c
plans
and
k
has
and
I'll
call
your
attention
to.
H
If
you
go
down
under
the
retirement
four
lines
down:
funded
ratio,
there's
the
impact
on
the
funded
ratio.
If
the
discount
rate
is
above
or
below
what
our
expectation
is
so
it
it
would
be,
it
no
longer
be
16
a
to
be
14
9.
If
we
earn
100
basis
points
less
it'd
be
18
7.
If
we
earn
100
basis
points
more,
the
normal
cost
goes
up
to
113
or
goes
down
to
5.4.
That's
for
pensions.
H
H
This
is
changes
in
the
inflation
rate.
Inflation
rate
also
drives
the
discount
rate,
and
it
drives
the
payroll
growth
to
some
extent
and
again,
the
the
impacts
are
relatively
modest.
If
you
wanted
to
extrapolate,
you
could
take.
If
you
went
back
to
the
one
percent
interest
assumption
and
you
wanted
to
make
it
two
or
three,
you
can
essentially
double
or
triple
the
impact
of
that.
H
H
H
H
25
return
assumed
rate
six
and
a
quarter.
They
produce
an
additional
2.5
billion
in
assets
over
and
above
the
assumed
rate,
almost
1.8
billion
in
pensions
and
over
700
million
insurance.
H
H
the
hazardous
system,
again
modest
declines
from
43
to
42
and
from
8
to
six
plus
in
the
insurance
funded
ratios.
In
all
the
plans
going
up
down
at
the
bottom
row,
the
scene
on
the
c
non
has
is
now
over
fifty
percent
of
fifty
one.
Eight.
This
insurance
is
85
4..
H
I've
commented
on
this
frequently
but
nationally.
If
you
look
at
the
numbers
of
85
percent
in
the
k-9
has
insurance
and
84
in
the
hazardous
insurance.
Those
are
those
are
almost
off
the
chart.
We
are
in
really
great
shape
with
a
fair
amount
of
money
compared
to
other
systems.
It's
the
pensions
that
continue
to
be
the
problem.
H
Cost
in
aggregate
the
contribution
goes
down
from
733
to
691
and,
and
the
c
goes
from
301
to
293,
so
they're
going
to
get
relief,
the
employers
are
going
to
get
relief
and
we're
now
out
of
the
phase
in
the
phase
in
is
done
and
we
have
no
more
phase
in
so
phase.
The
phase
in
is
still
a
slightly
negative
on
the
cash
flow
situation,
but
it's
it
will
be
over
in
fiscal
22..
H
G
H
Record
year
I
mentioned
that
worries
range
from
21
7
to
25
7..
All
10
plans
exceeded
their
benchmark,
so
we
we
create
a
benchmark
for
a
plan
which
says
all
right.
If
we
invested
in
the
target
asset
allocation,
for
example,
18.75
and
u.s
equities-
and
we
earned
the
index,
what
would
we
have
earned?
H
And
then
we
say
what
did
we
really
earn
and
the
difference
is
done
if
we
overweight
or
underweight
a
particular
asset
category
did
that
was
that
a
good
decision
did
it
add
money,
and
if
we
select
the
proper
securities
of
the
managers
that
would
be
beat
the
index.
Did
that
happen
or
did
they
underperform?
H
When
you
aggregate
it,
we
added
something
over
one
percent
to
the
return,
but
about
to
the
assets
about
200
million
dollars
and
value
added.
It
won't
always
be
that
way.
They're
going
to
be
times
when
we're
out
of
doing
things
that
are
out
of
favor,
but
we
added
about
200
million
dollars
net
cash
flow
for
the
total
krs
plan.
All
the
plans
was
positive.
Could
you
add
up
all
the
plans,
positive
cash
flow
and
it
was
only
24
million
negative
for
the
total
of
the
cers
so
and
that'll
be
gone.
H
That
should
be
gone
next
year
as
when
the
phase
in
is
complete.
H
Returns,
we're
laid
out
by
all
five
plans.
This
is
a
fiscal
year
to
date.
Is
a
june
30
year
we're
talking
about
the
whole
year,
so
the
fiscal
year
and
one
year
are
the
same.
Assets
are
in
the
left
column,
but
I
say
I'm
envious
of
beau's
ability
to
earn
returns
quickly
in
the
30
percent.
If
you
saw
us
earning
returns
last
year
in
the
30
percent,
you
ought
to
be
concerned,
we'd
be
taking
a
lot
more
risk
than
this.
These
plans
are.
H
But
three
five
ten-year
numbers
or
the
lowest
of
the
accumulative
is
a
20-year
number
which
includes
2009
and
2000
in
that
period
of
time,
but
even
there
we
got
six
and
a
half
percent,
but
the
key
is
looking
forward
and
we
continue
to
see
forecasts
of
investment
returns,
particularly
after
fiscal
2021
that
are
not
robust.
H
The
outlook
going
forward
continues
to
be
relatively
modest
by
investment
managers
and
consultants.
H
Yeah
well,
it'll,
be,
if
the
more
we
get
the
funded
status.
I
know
it'll
help
the
I
I
mentioned.
The
the
outlook
has
not
changed
much.
In
fact,
after
the
after
the
fiscal
21,
when
people
were
earning,
I
mean
some
endowments
are
earning
40
and
50.
The
outlook
is
not
any
better,
it's
probably
worse
because
we're
starting
at
a
higher
point.
H
So
will
we
every
year
we
go
out
and
and
grs
helps
us
gather
outlooks
for
people
and
they
have
varying
time
frames.
We
tend
to
rely
most
on
a
10-year
time
frame,
but
we're
not
seeing
people
raise
their
expectations.
C
Well,
mr
chairman,
I
think
you
you
pretty
much
asked
what
I
was
going
to
talk
about
changing
the
assumed
rate
of
return,
as
as,
of
course,
I
you
don't
want
to
do
a
knee
jerk
reaction
when
we
have
one
good
year
to
change
it,
but-
and
I
guess
what
most
people
would
I
don't
know
if
they,
I
fully
understand
it-
that
the
lower
the
assume
rate
of
return,
the
higher
our
contribution
is
so
if
you
raise
that
contribution
back
up
it
would
look.
The
general
assembly
would
would
make
a
lower
contribution
right
now.
C
The
tender
moment
we're
in
and
with
our
k-9
has
is
that
we
probably
need
to
continue
to
make
that
contribution.
We're
pretty
much
a
pay-as-you-go
plan
right
now
we
are
putting
in
more
than
we're
paying
out
and
that's
a
good
thing.
Yeah.
It
kind
of
gives
us
a
practice
if
we
ever
had
to
go
there,
we're
we're
already
doing
it.
C
C
So
we
are
in
a
a
much
better
place
than
we've
been
we're
not
in
a
good
place,
but
we're
much
better
than
where
we
have
been
yeah.
H
Representative
duplicity,
if
you
look
at
the
sensitivity
analysis,
if
we
went
from
five
and
a
quarter
six
and
a
quarter
pensions
and
the
nine
has
canine
has
the
normal
cost
would
go
down
from
782
to
541..
That's
that's
roughly
25
million
that
that
cost
would
go
down
by
about
25
million.
That's
the
impact
of
that
one.
That's
not
that's
a
reasonable
amount
of
money,
but
in
the
scheme
of
23
billion
it's
not
a
lot
in
terms
of
the
assets,
but
you
you
know
we're
constantly.
Looking
at,
I
I'll
tell
you.
H
I
think
that
flying
the
ointment
is
inflation,
what's
going
to
happen
with
inflation,
and
we
still
have
it
to
two
schools
of
thought
and
I'm
not
you
know.
I
have
a
bachelor's
in
economics,
but
I'm
in
an
organization
to
weigh
in
on
what
the
inflation's
going
to
be,
but
in
the
in
the
interim
inflation's
going
to
be
if
inflation
rises,
it's
going
to
be
detrimental.
H
Bond
prices
are
going
to
go
down,
it's
probably
bad
for
the
market,
longer
term,
we'll
have
higher
interest
rates
and
therefore
we
have
more
justification
to
have
a
higher
assumption.
H
H
Insurance
pretty
much
the
same,
we're
mid,
twenties
and
insurance
is
a
six
and
a
quarter
rate
and
it's
a
portfolio.
It's
a
little
more
aggressive
than
the
k
cash
flow.
I
said
all
the
systems
are
positive,
except
the
c
is
still
phasing
in
drop
down
to
the
well.
The
green.
H
The
green
line
has
contributions
going
in
at
a
billion
275
versus
a
billion
eighty-three.
That's
a
largely
result
of
separation,
cessation
payment
that
we
received
in
excess
of
170
million
of
pensions
and
something
more
much
less
insurance,
we're
paying
out
a
billion
dollars
in
benefits.
So
we
had
a
net
contribution
to
245
million,
but
that's
been
inflated
by
the
cessation
payment,
but
we're
still
a
year
ago
we
were
60.
Without
that
we
were
sick,
60
million
dollars,
positive
kind
of
going
across
that
line
to
grow.
H
Two-Thirds
of
the
way
down
all
c9
has
has
gone
from
a
negative
to
positive.
H
No
I'm
sorry,
it's
gone
from
16
to
16,
five
and
and
state
police
is
six
eight
to
six
six,
so
they're
stable.
H
H
F
H
And
that's
that
I
have
september
30,
but
I
can
summarize
that
in
about
two
seconds
yeah
september
30,
our
returns
were
between
seven
tenths
of
a
percent
and
about
one
and
a
half
depending
on
the
plan.
So
I
think
the
good
news
there
is
if
we
continue
that
for
the
year
we're
going
to
come
up
a
little
short
of
the
assumptions,
but
the
good
news
is,
we
didn't
give
haven't
given
anything
back
yet
I'm
worried
about
the
25
being
followed
by
a
a
negative
10
or
something
it
hasn't
happened.
D
Thank
you,
mr
chairman,
and
and
thank
you
dave
again
for
the
numbers
and
there's
a
lot
here.
I
think
a
lot
of
us
up
here
have
seen
some
numbers
over
the
years
that
aren't
that
we
don't
smile
or
have
us.
We
have
a
lot
more
questions
or
concerns
and
frowns
and
fur
brows,
and
all
that
a
question
I
guess
I
have
it's
really
kind
of
a
request
is
to
to
maybe
look
into.
It
seems
like
I've
got
on
the
on
the
nazara
site,
recently:
national
association
of
state
retirement
administrators.
D
I
think-
and
this
goes
back
to
what
chair
duplicity
was
talking
about
with
related
to
increasing
our
amount
from
five
and
a
quarter
to
six
and
a
quarter,
and
they
have
they
issue
regular
reports,
I
believe,
on
the
trends
or
at
least
part
of
the
report,
we'll
talk
about
trends
in
that
investment
return
and
be
interesting
to
see.
If
that
tren,
the
trend
has
been
to
lower
investment
returns
over
time,
and
it
has
gone
from.
D
You
know
eight
to
seven
and
a
half-
I
I
think,
maybe
even
approaching
seven
and
a
quarter
and
seven
percent.
So,
as
those
trends
have
gone,
that
way,
will
they
stabilize
at
something
a
little
bit
lower
or
not,
and
and
just
maybe
you
can
talk
to
us
about
that
next
time,.
H
Yeah,
I
could
comment
briefly
now.
If
you
want-
and
I
and
a
grs
probably
could
comment
on
it
too
yeah.
I
think
the
the
median
is
going
to
be
below
seven
and
how
much
further
it
goes.
But
it's
the
mode
is
probably
a
little
over
seven.
The
media,
the
the
mean,
is
probably
a
little
less
than
seven,
but
seven
percent
has
kind
of
gotten
to
be
the
number,
but
it's
of
the
last
30
changes.
30,
I'm
going
down
nobody's
going
up.
Nobody
that
I'm
aware
of
so.
H
At
some
point
I
tell
you,
I
talked
to
a
lot
of
the
executive
directors
say
I
wish
we
were
where
you
are,
because
we'd
be
in
a
lot
better
shape.
If
we
had
done
that,
but
grs
you
want
to
comment
anything.
B
I
think
a
lot
of
the
comments
that
I've
made
have
been
really
good.
I
mean
there's,
there's
no
doubt
that
our
investment
return,
assumption
is
certainly
below
the
median
of
the
peers,
but
k9
has
is
certainly
a
unique
in
a
unique
situation.
B
I
think
a
lot
of
the
comments
have
been
really
good,
that
the
trend
associated
with
investment
return
assumptions
across
the
nation
is
definitely
downward
and
that
is
directly
associated.
What
mr
eager
was
saying
about
investment
consultants,
they're,
really
just
not
projecting
the
same
expected
returns
that
you
know
they
did
10
years
ago.
The
trend
about
those
expected
returns
continued
to
be
lower
year
after
year,
which
is
why
we
are
you
know
our
recommendation
has
been
to
keep
the
assumption
where
it's
at.
B
We
certainly
look
at
that
assumption
each
year
and
then
also
looking
at
k9
has
and
the
cash
flow
it's
very
important
to
continue
to
maintain
our
current
contributions.
We
understand
that
the
contributions
are
high
and
budget-wise.
It
is
hard
not
just
for
the
state,
but
also
you
know
the
employers
out
there,
whose
contributions
changed
dramatically
under
house
bill
8,
but
it
is
really
important
to
maintain
those.
So
we
keep
both
a
positive
cash
flow
and
really
to
help
maintain
the
increase
in
our
funded
ratio.
A
Jenny
and
I'd
just
like
to
throw
in
while
we
have
the
x,
where
he's
on
the
line,
you
would
testify
that
you
know
using
a
different
valuation
or
some
assumption
would
yield
about
25
million,
which
isn't
a
whole
lot
of
money
in
the
scheme
of
things.
But
I
think
that
only
looks
at
your
normal
costs.
A
Yeah,
so
if
you
could
just
if
the
actuaries
could
just
let
us
know
what
that,
if
we
were
to
have
a
an
assumption,
change
that
was
more
in
line
with
what
we're
seeing
in
a
20
or
10
or
7
30
year
actual,
you
know
what
that
would
look
like
instead
of
the
25
million,
that
was
testified
earlier
for
the
normal
cost.
Would
it
be
for
everything.
H
B
So
unfortunately,
I
don't
have
this
the
executive
branch
numbers
in
front
of
me,
but
on
a
combined
basis,
the
amortization
costs
would
go
from
the
994
to
about
1077
million.
B
So
that
would
be
the
rejection
you're
seeing
and
I
think
our
concern
with
the
cash
flow
is,
you
know
we're
currently
at
benefit
payments
about
1
billion
and,
under
the
current
assumption,
our
contributions,
our
required
contributions,
are
about
1.1
billion.
B
Danny
did
you
have
another
comment.
I
saw
you
jump
on
yeah
I've.
I've
got
the
exhibit
up,
and
it's
in
your
it's
in
your
packet,
the
the
the
rate
would
go
down.
The
amortization
cost
would
go
down
from
994
million
to
be
921
million.
That's
from
the
system
combined
they've
noted
the
the
change
in
the
you.
B
Cost
rate,
and-
and
you
know
I
just
reiterate
what
janie
said
this
is
you
know
when
you
make
an
assumption,
change,
you're,
you're,
now,
building
in
inherently
more
risk,
because
there's
no
guarantee
that
you're
going
to
get
the
six
and
a
quarter
versus
the
five
and
a
quarter.
You
know
there's
less
probability
for
that,
and
then
you
know
in
terms
of
the
assumption
process,
the
assumption
making
process.
B
We've
had
many
discussions
with
kppa
about
this,
and
it's
really
driven
by
investment
policy
first.
So
it's
it's!
That's
where
the
assumption
is
is
kind
of
the
driver,
the
or
that's
the
first
starting
point.
So
it
would
really
be
all
right.
What
is
the
investment
policy?
And
then,
let's
find,
let's
find
an
appropriate
return
assumption
based
on
that
investment
policy,
not
not
the
other
way
around.
H
Yeah,
why
don't
we
come
back
to
you
with
a
document
but
you're
you're
right,
the
the
normal
cost
will
go
down
two
and
a
half.
That's
the
24
25!
That's
for
everybody!
The
unfunded
liability
goes
from
13
billion,
six
to
11
billion
nine
and
the
amortization
that
we'll
have
to
fee
we'll
have
to
make
a
calculation
on
that.
That's
the
big
one.
That's
needs
to
be
worked
out.
A
B
B
I
don't
think
anybody
expected.
I
think
if
you
were
going
to
go
in
and
go
to
any
anybody
across
the
country,
investment,
professional,
actuary,
otherwise
say
model
model
out
what
what
we
would
expect
if
we're
going
to
get
a
pandemic,
and
I
don't
think
this
would
be
the
outcome
that
would
that
would
show
up
on
anybody's.
You
know
notes
or
our
bases,
so
it's
been,
it's
definitely
welcomed
it's
great
and
the
challenge
is
is
when
you
have
10-year
treasuries
at
1.5,
30-year
treasuries
below
three.
B
That
makes
it
hard
to
get
get
those
higher
returns,
and
that's
why
the
investment
professionals
keep
lowering
their
expectations.
It
starts
with
bond
yields,
you're
not
you're,
not
all
invested
in
bond
yields,
but
that's
that's
kind
of
your
starting
point:
you're
trying
to
earn
risk
or
risk
premium
on
that
when
you
invest
in
equities
real
estate,
private
equity,
other
other
alternatives.
So
that's
that's
the
forward-looking
challenge
that
mystery.
Your
noted
noted
about.
A
And
I
think
it's
duly
noted,
but
I
know
as
long
as
I've
sat
on
this
board,
I've
always
heard
that
in
the
future
doesn't
look
good
and
that's
why
we're
at
five
and
a
quarter
but
every
year
the
future
has
proved
to
be
very
good,
and
I
I
I
think
I
re
recall
that
it
was
said
that,
just
when
the
fund
reaches
3
billion,
we
could
then
look
at
changing
some
of
those
assumptions,
but
we've
hit
that
three
billion
dollars
and
we're
still
not
considering
that
it
doesn't
sound
like
yeah.
A
B
That's
a
valid
point
that
that
is
a
point
and
and
hopefully
with
all
the
information
would
show
that
that
we're
we're
not
in
that
position
we're
just
you're
you're
net
cash
flow
positive.
You
have
three
billion,
but
it's
a
it's
more
than
a
14
billion
dollar
liability,
the
liabilities
closer
to
19
billion.
A
Perhaps
it
would
be
helpful,
and
I
and
I'll
stop
here,
but
perhaps
it
would
be
helpful
if,
if
this
board
and
and
and
the
general
assembly
and
state
for
that
matter,
had
had
a
goal
that
we
were
working
towards.
That
said,
you
know
if
we
got
to
x
number
of
dollars
or
we
got
to
a
certain
funded
liability
funded.
A
H
H
F
Personally,
I
don't
think
the
goal
posts
are
being
moved.
The
goal
post
in
my
mind,
has
always
been
north
of
80
funded
and
we
know
we're
near
that,
and
so
I
would
caution
the
body
against
overly
optimistic
actions
22
years
ago.
I
think
this
body
did
some
things
that
it
shouldn't
have
done
and
we're
paying
the
price
for
it
now.
So
I
would
just
say.
A
Caution
and
again
duly
noted,
well
said,
and
don't
necessarily
disagree
representative
miller
at
all,
but
I
do
think
it's
a
conversation
worth
having
that
that
that
this
body
knows
what
what
the
end
game
looks
like
and
what
you
know
is
it
80
funder
that
we
actually
back
off
and
have
an
assumption
rate,
that's
more
in
line
with
what
we're
seeing
or
or
is
there
some
other
number,
but
I
think,
instead
of
us
having
our
our
own
opinions,
there
ought
to
be
some
things
that
are
sent
to
this
group.
A
H
Absolutely
grs
has
said
repeatedly
and
we
agree.
These
assumptions
may
ought
to
be
in
little
bites,
not
in
big
bites,
and
we
waited
so
long
to
take
a
big
bite.
It
hurt
big
time,
and
so,
if,
if
we
do
move
on
the
upside,
we'll
probably
do,
I
would
suspect,
we'll
be
doing
it
in
smaller
increments
and
maybe
faster
than
we
would
have
otherwise.
H
Anything
you
did,
you
want
to
speak
to
the
housekeeping
bill.
A
H
And
I
don't
think
aaron
I
have
aaron
serrat
there
executive
director
benefits
on
the
line.
I
don't
know
that
there's
a
lot
of
what's
going
to
happen
in
the
housekeeping
bill
is
just
going
to
be
clean
up
from
house
bill
9
and
our
staff
member
legal
staff
member
who's.
Doing
that
is
on
off
on
maternity
leave,
we'll
be
back
shortly.
B
No,
I
don't
have
anything
much
additional.
I
just
we
had
several
significant
bills
passed
last
session
house
bill,
8
house
bill:
nine,
of
course,
the
cers
separation
and
senate
bill
169,
which
was
the
enhanced
benefits
for
the
total
and
permanent
in
line
of
duty
and
certain
duty
related
incidences,
so
those
bills
bills
of
those
magnitude.
Once
we
get
in
and
start
implementing,
everything
sometimes
requires
some
cleanup.
So
that's
it's
just
general
cleanup
for
most
of
that
stuff.
Most
of
those
fields
and
some
other
general
cleanup
that
we're
asking
for,
but
nothing.
A
All
righty
last
and
certainly
not
least,
in
fact,
last
and
the
largest,
would
be
the
trs
and
bo
if
you
would
come
introduce
yourself
for
the
record.
Thank
you
for
coming.
E
E
Okay,
there
we
go.
Thank
you
again.
I've
been
asked
today
to
discuss
investment
returns
for
the
fiscal
year
and
most
recent
quarter
end
cash
flow
update
for
the
fiscal
year
and
most
recent
quarter
year
end
the
recent
annual
actuarial
evaluation,
that's
been
completed
by
our
actuaries
for
the
fiscal
year,
end
june,
30th
2021,
and
also
the
budget
request
for
the
upcoming
budget
biennium
and
with
that
we'll
start
with
the
investment
performance.
E
E
Next
to
the
word
net
you'll
see
five
point:
four:
seven
percent:
that's
the
net
return
for
the
quarter
for
that
quarter,
ending
june
30th
that
was
has
in
the
top
51
percent
in
the
country
compared
to
the
larger
public
pension
plans
and
I'll
just
keep
on
going
29.5
9
for
the
year
we're
in
the
top
22
percent
13.02
for
the
three-year
top
seven
percent
12.91
for
the
five-year
top
three
percent
10.05
percent
for
the
10-year
top
4
percent
7.35.
E
This
is
for
the
health
of
this.
This
chart
shows
the
health
insurance
trust
returns
as
of
june
30th.
You
know
fiscal
year,
2021.
same
thing,
I'll
focus
on
the
net.
We
don't
have
comparative
data
for
the
health
insurance
trust,
but
for
the
quarter,
the
returns
for
6.25
percent
the
one
year.
Thirty
one
point:
one:
three
percent
three
year,
twelve
point:
five:
two
percent
five
year,
12.07
percent
and
ten
year,
eight
point
two
two
percent
same
thing
for
the
retirement
three
trusts,
but
this
is
for
the
most
recent
quarter,
end
september,
30th
2021.
E
So
just
moving
up
three
months
from
the
previous
slide
and
again,
the
lower
right
hand
left
hand
corner
net
for
the
quarter
was
negative:
0.29
percent
private
equity,
outperformed
public
equity
and
we
have
a
lower
exposure
to
private
equity
due
to
public
equity.
You
know
for
this
period
for
all
periods,
but
for
this
period
we
saw
private
equity
outperform
public.
E
We
were
in
the
top
84
percent
for
this
quarter,
it
wasn't
being
the
top
84
percent.
That's
not
really
a
function
of
any
active
investment
strategies.
It's
just
the
way
the
markets
played
out
for
the
quarter.
Favoring
private
equity
over
public
equity
and
our
lower
exposure
to
private
equity
for
the
one
year,
21.32
percent
return
with
that
quarter.
End
september,
30th
top
58
percent
I'll
just
keep
on
moving
three
year.
E
It's
11.8
percent
return,
top
12
percent
in
the
nation
five
year,
11.87
percent
top
seven
percent
in
the
nation
ten
year,
11.18
top
seven
percent
in
the
nation
20
years
point
six
three
percent
and
don't
have
a
pair
of
data,
of
course,
and
thirty
year,
eight
point
four
two
percent,
and
so
of
course
you
know
all
those
time
periods
those
four
year,
time
periods,
not
the
quarter
of
course,
but
those
beat
not
only
our
most
recent
assumption,
7.1
percent,
but
also
the
older
7.5
percent,
return
assumption.
E
So
again
those
returns
beat
the
now
7.1
percent
return
assumption
and
and
even
the
the
8
assumption
that
we
had
before
cash
flow.
This
is
cash
flow
for
the
retirement
annuity
trust,
and
this
is
for
the
fiscal
year
end
and
again,
with
these
cash
flow
statements.
You
can
divide
this
slide
into
three
portions:
the
top
third
cash
inflow,
the
middle
third
cash
outflow
bottom.
Third,
the
results
of
the
cash
inflows
and
outflows
and
other
things
that
are
happening
that
I'll
always
point
out.
So
we'll
look
at
the
top
line
cash
inflows.
E
We
see
that
member
contributions
from
fy
2020,
which
is
the
column
to
the
far
right
increased
from
324
million
seven
hundred
thousand
slightly
to
327
million
eight
hundred
thousand
employer
contributions
also
increased
from
one
billion
one
hundred
thirty,
four
thousand
three
hundred
thousand
one
billion
one
hundred
and
thirty
four
million
three
hundred
thousand
to
one
billion
one
hundred
forty
seven
million
dollars
investment
income
dropped
for
that
period
from
370
million
800
000
to
257
million
600
000
low
interest
rates
are
a
large
part
of
this.
E
E
829
million
800
thousand
to
one
billion
seven
hundred
thirty,
two
million
four
hundred
thousand
next-
is
cash
outflows
we
saw
and
the
biggest
part
of
that
always
is
going
to
be
the
benefits
that
we
pay
out
to
our
retirees
and
you
can
see
increase
from
2
billion,
195
million
700
000
to
2
billion
260
million
600
000
administrative
expense.
E
You
know
not
really
it's
a
very
small
thing
in
the
big
scheme
of
things,
but
it
increased
from
12
million
200
000
to
12
million
600
000,
so
total
cash
outflows,
2
billion
207
million
900
000
fiscal
year,
20
increasing
to
2
billion
273
million
200
000
in
fiscal
year
21.,
and
just
looking
at
the
cash
inflows
and
cash
outflows
from
those
two
top
thirds
of
the
slide.
E
You
will
see
that
cash
flow
increased
from
a
negative
378
million
one
hundred
thousand
and
twenty
to
a
negative
five
hundred
and
forty
million
eight
hundred
thousand
and
twenty
one.
I
have
a
slide
here
in
a
moment
that
I
will
share
that
comes
from
our
evaluation,
will
help
put
that
in
perspective.
The
negative
cash
flow
perspective.
E
This
is
the
really
important
line.
The
next
one,
the
investment
gains
or
losses,
realized
or
unrealized,
so
that's
increase
in
value
of
the
assets
of
the
system
or
sales
of
assets
that
we
had.
You
know
when
they
were
valued
high
and
we
could
sell
those
and
harvest
those
gains.
So
we
had
investment
gains
or
losses
of
723
million
200
000
in
fiscal
year,
20.
of
course
tremendous
year
for
everybody
in
the
markets,
five
increased
to
5
billion,
759
million
300
000
in
fiscal
year
21.,
so
a
big
change
and
I'll.
E
Just
now,
the
the
numbers
in
the
center
column.
At
the
beginning
of
the
fiscal
year
going
to
the
end
of
the
fiscal
year,
we
started
out
the
year
with
20
billion
717
million
dollars
in
the
retirement
annuity,
trust
and
wound
up
the
end
of
the
period
25
billion
935
million
800
thousand
dollars.
A
Let
me
stop
you
for
a
minute
bo.
Co-Chair
higdon
has
a
comment.
C
And
you
probably
know
you
probably
know
what
it's
going
to
be
about
the
negative
cash
flow,
and
I
know
I
know
we
you,
you
know
that
you
continually
tell
it
continually
say
that
that's
that's
a
healthy
number,
but
I'm
just
always
concerned
about
that
number,
and
especially
with
a
in
a
system.
That's
we're
close
to
60
percent
funded,
but
I
I
know
that's
just
I
just
I
just
wanted
to
I
didn't.
I
didn't
want
you
to
think
I
was
asleep
up
here
and
I
didn't
notice.
A
Well,
while
we're
stopped,
if
we
could
representative
miller,
would
like
to.
F
E
I
think
a
lot
of
that
is
just
a
lot.
That's
going
to
be
fixed
income
bonds,
and
you
know
interest
rates
you
know
were
very
low
for
that
year.
So
I
think
that's
a
lot
of
what
we're
seeing
with
that
particular
line.
A
What
would
a
system
of
trs
size
a
typical
administrative
expense
b?
Are
you
are?
Are
you
pretty
well
in
line
with
other
states
or
what
is
a
typical
percent
expense
for
a
system,
your
size.
E
We
are
actually
much
lower
than
other
states.
This
ppob
did
no.
No,
it
was
a
program
review,
an
investigation
said
a
study
and
it's
it's
the
study's
a
little
old.
It
was
done
in
early.
I
think
2012
2013
and
it
looked
at
a
couple
years
prior
to
be
fair,
but
it
compared
trs,
administrative
expenses
and
investment
expenses
with
other
pension
plans
across
the
nation.
There
was
a
graph
and
the
investment.
The
ministry
of
expenses
were
by
very
low,
extremely
low.
E
The
median
was
here
and
the
trs
was
the
very
bottom
of
the
graph,
so
we're
among
the
lowest
in
the
nation
and
that
hasn't
changed
from
when
that
study
was
done
by
program
review
investigations
committee
to
today
we're
still
among
the
lowest
cost
system
in
the
country,
particularly
for
applying
the
ministers,
not
just
a
pension,
but
a
medical
insurance
side
as
well.
So
we
work
hard
to
keep
those
costs
down.
A
And
does
this
show
our
investment
costs,
including
any
payouts
to
investors.
E
This
well,
the
administrative
expense
is
going
to
show.
No
that's
investment.
Cost
is
outside
of
that.
So.
E
E
I
think,
for
the
purposes
of
this
slide,
which
is
a
little
different,
somehow
we
report
everything
because
typically
we're
splitting
out
administrative
expense
and
investment
expenses,
two
different
expense
items,
that's
proper
accounting,
but
I
think
we
combine
it
in
this
one.
I
think
that's,
I
think
it's
reflected
in
both
an
administrative
expense.
Okay,.
E
Goodyear
over
five
billion
dollar
gain
in
assets
for
the
retirement
annuity,
trust,
health,
insurance,
trust
same
format,
and
this
is
also
for
the
fiscal
year
end,
so
cash
inflows
member
contributions
were
somewhat
less
according
to
slide
192
8
to
1876
million
dollars.
Some
of
that
could
be
timing.
You
know
with
this
as
contributions
come
in
and
are
reported
and
audited
and
reconciled
employer
contributions
up
very
slightly
184.6
million
versus
last
year
versus
184.9
million
this
year.
E
Maybe
some
coveted
issues
too
over
the
year,
you
know
possibly
affecting
some
of
these
numbers
recovery
income,
which
is
rebates
and
subsidies
rebates
from
pharmaceutical
companies,
subsidies
from
federal
government
that
we
collect.
We
saw
those
increase
from
100.4
million
in
2020
to
120.8
million
in
2021.
E
investment
income.
Same
kind
of
stories
we
saw
with
the
retirement
annuity
trust
a
decline
from
13.2
million
dollars
and
20
to
3.7
million
dollars
and
21
outflows
in
the
middle
section,
the
benefit
payments,
305.6
million
paid
out
and
20
310.9
million
paid
out
in
21
slight
decline.
Administrative
expense
here
this
is
just
for
health
insurance,
the
health
insurance
portion
of
administrative
expense,
so
decline
from
2
million
to
1.7
million
and
then
total
cash
outflows.
E
cash
flows.
The
next
line
cash
flow
improved
even
a
little
better
183.4
million
and
20..
It
rose
somewhat
to
184.4
million
and
21
and
investment
gains
and
losses
again
same
story
as
on
the
previous
slide,
the
retirement
trust
19.3
million
for
20
and
just
great
year,
almost
half
a
billion
dollars
and
21
at
499.5
million.
A
I
appreciate
your
speediness
but
representative
higdon.
I
was
trying
to
look
for
a
good
place
to
stop.
Had
a
question.
Yes,
sir.
C
C
Yeah
that
flight
that
slide-
yes,
184
million
positive
cash
flow.
C
We
we
we
hear
from
time
to
time
about
the
the
legislator,
the
general
assembly,
our
contribution
that
it's
you
know,
typically,
maybe
more
than
what's
actually
needed.
Can
you
comment
on
that
and
and
and
it's
I
guess,
how
it
affects
the
cash
flow.
E
Okay,
so
with
shared
responsibility,
you
know
active
members
phased
into
paying
additional
three
percent
of
their
paycheck
towards
the
health
insurance
trust
hadn't
been
doing
that
before
school
districts
match
that
contribution
and
other
players
did
the
same
thing.
University
rates
were
a
little
bit
lower
because
their
retirees
retire
later.
You
know,
like
age
62,
I
think
on
average,
so
they
got
a
little
bit
less
of
a
payment
because
we're
paying
health
insurance
less
and
then
for
retired
teachers
under
the
age
of
65
began
paying
towards
the
kentucky
employees.
E
Health
plan
premium
amount
equal
to
the
part
b
amount
of
that
is
paid
to
medicare
for
retirees
65
and
over,
and
the
commonwealth
agreed
to
pay
the
amount
of
the
kehp
premium
less.
What
the
retirees
pay
so
is
that
medicare
part
b
premium
amount
plus
just
whatever
the
cost
of
the
plan
is.
You
know,
like
maybe
40
a
month,
so
they're
paying
almost
200
a
month
very
roughly
average
and
the
commonwealth
is
paying
out
500
a
month
towards
that
premium.
E
E
We've
been
also
very
lucky
that
these
federal
subsidies,
which
pay
most
of
the
cost
of
our
65
and
over
health
insurance
costs
and
those
are
really
underappreciated
what
those
federal
subsidies
do
to
help
pay
for
those
costs.
They
do
pay
most
of
it,
that
those
have
remained
in
place
since
2010
and
I'll
just
name
one
medicare
advantage.
That
was
something
everybody
thought
it
was
going
to
last
a
few
more
years
in
2010.
You
know
we
had.
E
E
The
budget
did
not
provide
funding
from
the
state
for
this.
The
current
fiscal
year,
okay
for
the
health
insurance,
but
you
can
see
we
are
still
growing.
We
are
growing
strongly.
You
know
with
the
health
insurance
trust.
The
bottom
line
shows
that,
and
it
doesn't
include
the
current
fiscal
year,
but
it's
from
fiscal
year
20
to
21.
We
went
from
1.616
billion
dollars
in
that
health,
insurance
trust
to
2.3
billion
dollars.
E
Tremendous
and
we're
going
to
continue
to
see
that
growth,
and
we
anticipate
that
this
health
insurance
trust
fund.
You
know
looking
right
now
and
knock
on
wood,
that
medical
insurance,
inflation
and
those
federal
subsidies.
Don't
change
we're
looking
at
having
this
health
insurance
trust,
100
funded.
You
know
in
a
few
short
years
you
know
maybe
as
early
as
2028,
so
I
mean
we're
we're
making
great
progress
here
and
that's
something
that
everybody
all
teachers
can
be
feel
really
really
reassured
about
where
we
are
the
health
of
the
health
insurance
trust.
E
So
again,
you
know
we
had
a
gain
in
this
health
insurance
trust
fund
from
the
beginning
of
the
fiscal
year,
end
of
fiscal
year
of
of
almost
700
million
dollars
and
again
this
was
a
pay-as-you-go
benefit
before
2010.
There's,
hardly
any
money
in
here
just
enough
to
pay
a
few
months
worth
of
premiums.
So
great
great
news.
E
These
are
the
same
slides
for
the
retirement
annuity
trusts
and
the
pension
I
mean
for
the
health
insurance
trust,
except
for
just
like
before
this
is
for
the
the
quarter
year
in
the
the
period
ending
for
the
most
recent
quarter
september,
30th,
2020.,
so
again
same
format,
retirement
annuity,
trust,
member
contributions
and
again
I
think
this
is
a
timing
thing.
There
could
possibly
be
a
covet
thing
as
well,
because
we
did
see
some
decline
in
membership.
E
I
think
largely
because
substitute
teachers
weren't
as
much
use
during
the
covet
year
as
in
prior
years,
we
see
a
decline
in
member
contributions
from
74.9
million
to
70.8
million
employer
contributions.
We
see
an
increase
against
some
of
this.
I
think
really
is
timing:
271.6
million
to
82.8
million
between
the
two
years;
investment
income
same
story
as
before:
69.4
million
dollars
and
21
declined
to
49.3
million
dollars
in
2022,
so
total
cash
inflows,
comparing
those
two
periods,
slight
decline
from
415.9
million
2021
to
402.9
million.
E
Most
recently,
the
most
recent
quarter
ended
period
benefit
payments,
went
up
slightly
from
565.2
million
to
583.8
million
administrative
expense,
3
million
to
3.1
million
for
the
quarter,
outflows
568.2
million
to
586.9
million,
and
then
we
see
the
cash
flow,
it's
negative.
It
increased
from
152.3
million
for
the
quarter,
21
to
from
152.3
million
to
184
million.
In
the
most
recent
quarter
ending
september
30th
investment
gains
or
losses
over
the
period
we
had
a
gain
in
21
of
1.265
billion
dollars.
E
We
had
a
loss,
you
know
for
this
quarter,
137.3
million
dollars.
So
that's
for
the
period
ending
june
30th.
So
you
know
it's
a
as
a
quarter.
It's
a
short
period
of
time
I
can
tell
you
october,
was
better
october.
Just
on
equity
investments
alone.
We
saw
a
three
percent
return
that
doesn't
include
any
of
the
private
equity
side.
So
we
have
returned
the
private
equity
side.
It
will
be
better
than
three
percent,
so
you
know
just
one
more
month
later
we're
seeing
you
know
a
change.
E
So
these
short-term
numbers
are
not
maybe
as
helpful
as
the
longer
term
numbers,
or
they
really
aren't
as
helpful.
E
So
anyway,
bottom
line
lower
left-hand
corner
that
that
middle
column,
the
numbers
we
saw
that
the
assets
the
beginning
of
the
fiscal
year
for
the
retirement
houthi
trust-
and
this
is
again
just
going
through
the
rootmasters
quarter,
with
25.935
million
billion
dollars
at
the
start,
25.614
billion
dollars
at
the
end
of
that
quarter,
ending
period,
health
insurance,
trust
same
thing
quarter
in
numbers
we
saw
member
contributions,
decrease
from
45.5
million
dollars
and
21
for
the
quarter
in
period,
a
decrease
to
43.4
million
employer
contributions
same
thing
and
again
I
think
some
of
this
is
timing
and
reporting,
but
44.9
million
to
32.4
million
recovery
income.
E
Again,
that's
rebates
and
subsidies.
Federal
subsidies
increase
from
21.6
million
dollars
to
twenty
two
point:
seven
million
dollars,
investment
income,
same
story.
We
had
two
point:
three
million
dollars:
twenty
one:
a
negative,
seven
hundred
thousand
dollars
and
twenty
two
so
total
cash
inflows,
114.3
million
and
21
compared
with
97.8
million
and
22.
E
benefit
payments,
refunds,
78.9
million
and
21.
64,
69.4
million
and
22
and
those
are
total
cash
outflows.
Then
we
have
net
net
cash
flow.
We
saw
35.4
million
dollars,
positive
cash
flow
and
21
slight
reduction
at
28.4
million
positive
cash
flow
fiscal
year
to
date
for
the
quarter
at
28.4
million
and
investment
gains
losses,
dollars,
104.7
21,
12.7
million
dollars
from
22.
E
plan
assets
in
the
health
insurance
trust
for
the
quarter
ending
period,
2.3
billion
dollars
at
the
beginning
of
the
fiscal
year
period,
2.341
billion
dollars
at
the
end
of
that
period.
E
Okay,
these
are
the
actuarial
evaluations,
so
every
year
the
trs
actuary
performs
evaluation.
You
know
they
look
at
what
they
expected
to
happen.
What
happened
and
I've
got
some
slides,
that'll
help.
You
know,
explain
that
process
a
little
more
what
they
do,
but
this
is
done
every
year
by
the
actuary
and
then
as
a
result
of
the
evaluations.
E
That's
when
we
get
you
know
the
report
on
changes
in
funded
status,
for
example,
changes
in
liabilities,
changes
in
assets,
so
the
top
line
here,
the
top
box
is
the
retirement
annuity
trust
and
the
bottom
box
is
the
health
insurance
trust
and
I'm
going
to
focus
on
the
percentages
at
the
right,
but
again
certainly
happy
to
answer
any
questions
about
any
of
these
numbers.
But
I
do
want
to
note
before
doing
this,
that
this
annual
evaluation
is
the
first
valuation.
E
That's
going
to
reflect
the
assumption,
changes
from
that
recent
five-year
experience
study
that
we've
talked
about
in
in
past
ppob
sessions.
So
this
is
the
first
time
we're
going
to
see
the
impact
of
lowering
that
assumed
rate
of
return
from
seven
and
a
half
percent
to
seven
point.
One
percent
for
the
pension
from
eight
percent
to
seven
point
one
percent
for
health,
insurance,
trust
and
also
those
mortality
tables.
You
know
teacher-specific
mortality
tables
and
generational
mortality
tables
where
actuaries
now
assume
that
a
25-year-old
is
going
to
live
longer
than
a
65-year-old.
E
So
it's
a
one-time
thing
you're
not
going
to
see
mortality
tables
change
that
much
ever
again
because
of
what
they
did,
but
it
made
changes
and
those
changes
were
somewhat
offset
by
the
great
return
we
had.
You
know
that
the
29
return
that
I
talked
about
you
know
so
they're
somewhat
offset,
but
because
that
return,
that
great
return
is
averaged
in
over
five
years.
You
don't
see
the
full
impact
of
that
great
year,
all
at
once.
It's
phased
in
over
five
years
so
again,
going
to
the
far
right
column
at
the
top.
E
You
can
see
that
the
funded
ratio
for
the
retirement
annuity
trust
as
of
june
30th
2020,
was
58.4
as
of
june
30th
2021.
As
a
result
of
that
mix
of
assumption
changes.
Well
the
assumption
changes.
It
declined
to
57.2
percent,
not
quite
as
much
as
it
could
have,
but
for
the
great
return
year
and
then
using
one-fifth
of
the
value
of
that
going
to
the
bottom
box
again
far
right,
column,
health,
insurance,
trust.
A
C
Thank
you
bo.
I
get,
I
guess
you
know,
that's
really
difficult,
it's
clear
as
mud
when
you
look
at
this,
how
you
we
have
the
best
year,
one
of
our
best
years
ever
and
then
then
our
funded
ratio
drops
and
of
course,
as
you,
you
know,
explain
that
it's
due
to
those
assumptions,
but
you
know
our
unfunded,
our
liabilities.
C
E
Not
entirely,
but
almost
entirely
okay
over
over
three
billion
dollars
of
that
are
the
primary
assumption.
Changes
that
drive
that
reducing
the
assumed
rate
of
return
and
the
mortality
tables,
the
assumed
rate
returns
a
little
bit
more
impactful,
but
not
much
than
the
mortality
tables.
Those
were
two
big
big
changes
and
that's
those
are
the
primary
drivers
in
the
increase
in
liabilities,
and
you
can
see
the
assets
did
increase
not
to
reflect
the
over
the
5.2
billion
dollars
in
additional
market
value
increase
we
saw,
but
we
were
recognizing
one-fifth
of
that
market
value
increase.
C
C
So
it's
like,
I
said
it's
clear
as
mud,
sometimes
when
you,
when
you're,
when
you're
looking
at
this
and
scratching
your
head
how'd
that
happen.
E
If
it's
a
function
of
those
two
things,
it's
right,
the
smoothing
the
five
year,
smoothing
of
the
investment
returns
and
those
assumption
changes.
If
we
use
market
value
as
opposed
to
the
five-year
smoothing,
the
funded
ratio
for
retirement
tuition,
trust
would
have
declined
slightly
from
58.4
to
57.2.
It
would
have
increased
significantly.
C
I
guess
this
is
the
opposite
when
that
that
doesn't
make
our
our
huge
gains.
Look
as
good,
because
we
we
have
the
smoothing,
and
so
I
I
don't
I
don't
know
if
smoothing
is,
is
that
good
of
a
I
guess,
accounting,
I
won't
say,
gimmick
but
a
accounting
procedure
to
use,
but
it
does
have
its
drawbacks.
E
It
it
helps
provide
consistency
and
budget
requests
by
smoothing
the
five
years,
and
we
have
a
great
slide
it's.
I
can't
wait
to
develop,
but
I'm
happy
to
show
that
show
it
shows.
Actual
market
value
market
returns.
Okay,
it's
a
it's
a
chart
and
they're.
You
know
they're
going
up
and
then
it
shows
the
effect
of
the
five-year
smoothing,
and
you
know
the
market
gains
kind
of
go
up
and
down
like
this
so
june,
30th
2009
was
not
a
realistic
picture
of
what
the
markets
were
going
to
be
long
term.
E
You
know
it
was
so
negative
june.
30Th
2021
is
not
a
realistic
picture
of
what
the
markets
are
going
to
be
long
term,
but
when
we
smooth
those
spikes,
those
peaks
and
valleys,
you
get
a
trend
and
the
five
year
smoothing
it's
right
in
the
middle
of
those
all
the
way
over
all
those
years.
It's
right
it
falls
right
in
the
middle.
So
it's
it's
a
very
good
method
of
of
trying
to
provide
consistency
and
budgets
that
still
follows
the
direction
of
the
markets.
E
C
E
Okay-
let's
see
this
was
also
in
the
actual
evaluation
and
just
some
highlights
there.
The
top
bullet
point
trs
once
again
received
100
percent
of
the
actually
determined
employer
contribution
or
adec
for
the
retirement
annuity
great
news.
It
helps
with
our
investments.
It
helps
with
negative
cash
flow.
It's
it
is
a
again
that's
a
sea
change
for
trs
when
we
started
receiving
the
full,
a
deck
and
we've
been
receiving
now.
The
very
full
eight
are
very,
very
close.
E
You
know
like
99
97
for
fiscal
year,
17
18,
but
if
this
is
the
sixth
consecutive
year
so
game
changer,
then
the
third
bullet
point
there.
This
is
develop
our
actuary
and
it's
a
measure
of
negative
cash
flow
by
as
percentage
so
cash
flow
is
negative
at
3.79
percent
compared
to
assets
for
2021,
and
then
you
have
the
most
more
recent
years,
just
below
that
for
2020
negative
cash
flow,
3.68
2019,
3.48
percent,
2018
3.63.
E
We
were
getting
closer
to
we're
getting
in
danger
of
we're
over
five
percent,
getting
close
to
six
percent
very
quickly,
bef
in
2016
and
before
when
we
weren't
getting
additional
funding
we're
getting
now.
So
that
is
having
a
huge
impact
on
on
cash
flow
and
again
we're
very,
very
thankful
for
that.
E
The
actuary
also
does
this.
Every
valuation
is
a
gains
loss
statement
and
they
look
at
what
they
thought
was
going
to
happen
for
the
coming
year
and
what
actually
happened
and
what
they
thought
would
happen
based
on
the
assumptions
and
they
performed
this-
and
we've
been
doing
this
for
many
years
now,
but
you'll
see
this
is
a
snapshot
on
the
right
hand,
side
you're,
going
to
see
gains
actuarial
gains,
okay
and,
on
the
left
hand,
side
actuarial
losses.
So
two
of
those
bars
stand
out
immediately
the
one
at
the
top.
E
We
had
a
gain
of
1
billion,
996
million
500
000
on
investment
returns;
okay,
because
we
recognized
one-fifth
of
that
5.2
billion
dollars
that
we
had
in
returns
so
great
gain
there
and
then
down
at
the
bottom.
You
see,
of
course,
those
assumptions
changes
that
we
talked
about
and
those
assumption
changes
added
3
billion,
60
million
dollars
in
liabilities.
E
E
A
Request
so
bo,
are
you
using
the
same
five-year
smoothing
on
on
the
assumption
changes
that
you
are
on
the
returns.
E
Yes,
sir,
yes
or
so
it's,
oh!
No!
No!
No!
No!
I'm
sorry
on
the
the
assumption
changes.
No!
They
are
recognized
immediately.
E
So
you
know
going
from
seven
and
a
half
to
seven
percent
7.1,
that's
recognized
immediately
and
the
mortality
tables
teachers
living
longer.
That's
recognized
immediately.
What
trs
is
doing
is
the
contribution
requests
that
we
are
making
on
those
changes
and
substance
are
not
being
recognized
immediately.
We
are
going
to
phase
in
those
contribution.
Budget
requests
over
a
five
year
period
and
kind
of
smooth
in
you
know
that
5.2
billion
dollar
gain
that
we
got
for
2021.
E
er
so
but
the
assumption
changes
they're
all
here.
That's
that
3.06
billion
dollars
and
again
mortality.
What
they
do
with
mortality
will
never
happen.
You'll
never
see
a
mortality
change
like
that
ever
again,.
E
Budget
request-
and
so
let
me
this
is
for
the
upcoming
budget.
On
the
left
hand,
side,
you
see
a
description
of
what
the
budget
request
is
for
those
middle
two
columns
with
numbers
are
what
we
actually
received
last
fiscal
year
in
the
current
fiscal
year,
so
the
last
budgets.
E
You
know
I'm
not
going
to
cover
those
because
those
are
already
set,
but
I
will
focus
on
the
two
columns
to
the
immediate
right
and
those
are
the
budget
requests
for
the
upcoming
biennium
and
I'll
just
focus
on
a
few
lines,
maybe
for
time,
but
the
second
row:
that's
health
insurance
funding,
it's
shaded
in
gray,
there
you'll
see
the
requested
amount
for
fiscal
year.
E
23
will
be
71.2
million
dollars
for
24
it'll,
be
77.7
million
dollars
for
health
insurance
going
on
down
below
the
box
numbers
you'll
see
a
line
for
amortized
payments,
you'll
see
something
in
the
amount
of
99.2
million
for
fiscal
year
23
and
84.8
million
dollars,
or
fiscal
year.
24
those
amortized
payments
sometimes
referred
to
as
the
green
box
dollars.
Those
represent
certain
benefit
adjustments
that
the
commonwealth
has
provided
in
the
past
like
sick
leave.
E
Some
old
supplemental
cost
of
living
adjustments
that
were
provided
that
go
back
to
2008,
but
that's
the
last
one,
but
because
they're
being
paid
on
a
20-year
amortized
basis.
We
still
have
amortized
payments
being
made
on
these
benefit
adjustments,
because
that's
what
these
this
reflects.
It
reflects
that
certain
benefits
were
paid,
not
lump
sum
like
sick
leave
or
those
old
calls,
but
they
were
paid
on
unamortized
bases
and
eventually
those
amortized
bases
became
over
a
20-year
period.
E
So
you
do
see
it
decreasing
because
we're
starting
to
pay
off
some
of
those
old
additional
supplemental
costs
of
living
adjustments,
and
you
will
continue
to
see
that
and
eventually
all
those
old
coals
will
be
gone
and
the
only
thing
reflected
on
this
line
will
be
the
cost
the
amortized
cost
of
sick
leave
immediately
below.
That
is
what
we
would
ask
for
sick
leave
if
we
didn't
want
to
amortize
it,
but
just
pay
it
in
full.
E
The
next
line
is
the
additional
employer
contribution
required,
629.4
million
and
23
646.5
million
and
24.
and
again.
This
is
the
additional
funding
that
we
need
to
implement
the
funding
plan
to
pay
off
that
legacy,
unfunded
liability
and
we
have
about
22.9
years
left
in
that
amortization
period.
As
of
the
end
of
this
most
recent
fiscal
year
and
again,
you
know
that
legacy
infinite
liability
has
paid
off
it's
going
to
be
a
great
day,
because
then
the
cost
of
the
commonwealth
for
trs
will
be
a
little
bit
less
than
social
security.
E
In
fact
we're
getting
more
than
we
need.
You
know
just
to
put
aside
to
pay
benefits
for
teachers
as
they
ever
every
year.
You
know
with
just
a
fixed
contribution,
so
the
fixed
contribution
amount
can
even
go
down
after
we
get
to
100
funded
so
that
box
below
that.
Okay,
let
me
go
just
go
straight
down
to
the
trs
budget,
actual
requested
the
description
on
the
left
in
that
box.
E
But
ultimately,
that's
a
kde
budget
request
and
you'll
see
the
seek:
ask
is
438.7
million
in
fiscal
year
23
and
448.5
million
in
fiscal
year
24.
and
the
box
below
that
represents
the
boxes
below
those
two
numbers
represent.
All
the
dollars
are
going
to
go
directly
to
trs
or
requested
for
trs
for
the
next
two
fiscal
years
in
the
upcoming
biennium
and
that's
the
1.28
9
billion
dollars
for
fiscal
year,
23
1.301
billion
dollars
for
fiscal
year
24.
E
and
we
always
add
the
very
bottom
line
just
to
because
this
is
in
our
budget.
It's
just
reflected
in
our
budget
and
you'll
see
states
expenditure
for
debt
service,
okay.
So
what
that
reflects
that
reflects
when
shared
responsibility
came
about
and
some
contributions
have
been
reallocated
from
pension
to
medical
insurance.
You
know
to
keep
to
pay
those
costs.
The
commonwealth
issued
a
467
million
dollar
bond
in
august
of
2010
to
repay.
E
If
you
will
in
full
the
trs
pension
fund
for
those
contributions
that
have
been
reallocated
to
the
health,
insurance
trust
and
then,
additionally,
they
issued
a
bond
of
269
million
dollars
in
2011
and
152
million
dollars
in
2013
for
transitional
funding
for
health
insurance
costs,
because
active
teachers
in
school
districts
didn't
start
paying
that
additional
three
percent
in
2010
all
at
once.
They
phased
in
from
july
1st
2010
to
july,
first
2015,
okay,
so
the
state
issued
three
bonds
and
this
represents
the
debt
service
on
those
bonds.
E
C
Thank
you,
mr
chairman.
I
I
guess
we
we
need
to
have
some
sort
of
celebration,
but
those
shared
responsibility,
bonds
being
paid
off.
That's
that's!
That's
good
news.
C
A
couple
questions,
mr
chairman:
if
you
don't
mind,
I
know
the
hours
late
and
but
on
the
the
state's
portion
of
shared
responsibility,
71
million
and
77
million
up
there
at
the
top
and
that's
up
from
61
million
and
and
21..
I'm.
E
Yes,
let's
be
glad
to
some
of
these
numbers
like
for
the
21
number.
Okay,
the
budget
requests
are
based
on.
You
know
a
fiscal
year,
it
hasn't
happened
yet
so
we
have
to
project
how
many
people
are
going
to
be
on
health
insurance.
You
know
how
many
you
know
premiums
are
we
going
to
be
paid?
What
are
those
cost
of
premiums
going
to
be
for
the
kehp?
E
What's
going
to
be
the
cost
of
the
premiums
for
the
medical?
You
know
eligible
health
plan,
you
know
for
the
65
and
over
group,
so
we're
projecting
that
and
there's
always
an
over
under
so
for
this
for
fiscal
year,
21
you
that
61.7
million
dollars
that
would
represent
a
reduction
because
there
you
know
we're.
We
were
got
more
than
we
needed
in
20
fiscal
year
20..
So
now
we
would
give
this.
You
know
state
an
offset
for
21,
and
we
do
that.
You
know
with
each
budget,
so
health
insurance
is
more
likely.
E
C
Okay
and
the
mr
chairman,
if
you
don't
mind
the
amortized
payments
that
that
are
steadily
decreasing,
what's
included
in
that
in
those.
E
The
only
thing
that
is
left
of
23
and
24
now
is
health
insurance
and
those
old
additional
cost
of
living
adjustments.
There's
a
statutory,
fixed,
statutory
cola
of
1.5
for
retired
teachers
and
back
when
you
know
budgets
had
a
little
bit
better.
You
know
back
in
the
day,
trs
would
occasionally
request
additional
funding.
You
know
to
provide
something
above
the
1.5
percent
back
when
inflation
was
a
little
higher.
You
know
to
keep
pace
with
inflation,
and
additional
funding
was
provided
some
years
if
it
wasn't
provided.
The
additional
cola
was
not
provided.
E
We'd
never
provide
a
cola
without
the
additional
funding
to
pay
for
it,
but
some
additional
funding
was
provided
the
last
year.
That
happened
was
2008,
but
because
these
are
20-year
amortized
periods,
you
know
there's
still
some
payments
left
in
those
colds,
but
every
year
a
cola
payment
for
that
supplemental
cola
rolls
off.
So
it
decreases
just
because
of
the
coal
is
rolling
off.
E
C
That's
great
to
see
that
number
and-
and
I
would
certainly
that'd
be
my
recommendation-
that
we
pay
that
yearly
going
forward,
so
we're
not
accumulating
that
that
we're
paying
for
those
over
20
years-
one
other.
I
guess
comment
and-
and
you
know
back
in
in
2016
when
we
paid
the
full
arc,
it
was
500
million
in
each
year
and
it
looks
like
now
we're.
Actually
the
arc
is
looks
like
for
24
770
million
a
year,
quite
a
bit
of
increase
in
in
in
six
years.
C
E
Now
that
that
770
million
is
going
to
reflect
the
green
box
dollars
and
and
the
sick
leave.
C
E
C
E
So
with
those
changes
and
assumptions
you
know
the
assumed
rate
of
return
and
mortality
tables,
we
recognize
those
immediately
but
we're
phasing
in
the
increased
contributions
over
five
years.
So
you
will
see
inc
increases
more
like
this
over
the
next
five
years
and
at
that
point
they
will
level
off
a
little
bit
more
because
we
won't
be
building
in
budget
requests
based
on
those
assumption,
changes,
they'll
be
done,
and
at
that
point
the
increase
will
largely
just
be
a
factor
of
payroll
growth.
You
know
that's
what
we'll
be
requesting.
E
I
mean
there'll,
be
changes
with
you
know,
experienced
studies,
and
you
know,
and
the
annual
evaluations
but
they'll,
be
more
modest,
you'll,
see
something
closer
to
payroll
growth
and,
of
course,
we
part
of
the
assumption.
Change
has
lowered
payroll
growth
from
three
and
a
half
percent
to
2.75
percent.
So
when
you
do
that,
you
know
you
flatten
that
those
increase
future
budget
requests
somewhat,
because
you
move
away
from
level
percentage
of
payroll
funding.
E
You
move
you're
still
doing
that
level
percentage
apparel
funding,
but
you
move
closer
to
something
like
level
dollar.
You
know
where
payroll
growth
doesn't
matter
and
pay.
You
know
budget
requests,
don't
increase
with
payroll
growth,
so
long
story,
short
you're,
going
to
see
increases
for
five
years.
More
like
this
and
then
after
five
years
you'll
see
increases.
There
are
more
along
payroll
growth
at
2.75,
okay,.
A
Bro,
I
think
we're
going
to
let
you
go
okay,
maybe
we'll
let
you
switch
the
order
next.
Next
time
get
you
go,
go
first,
okay,
thank.
A
And,
and
you
are
free
to
go,
if
you,
if
we
don't
have
any
more
questions,
representative
miller
would
like
to
discuss
a
couple
pre-filed
bills
that
he
has
for
us.
F
In
thank
you,
mr
chairman,
and
in
each
case,
hope
that
these
are
included
in
the
ppob's
year-end
recommendation
to
the
full
body
in
terms
of
bills
that
they
would
support
the
the
one
coming
right
on
right
behind
the
actuarial
discussions
that
that
we've
just
had
house
bill
or
a
br40
or
341
rather
would
take.
This
assumption
changes
these
valuation
changes.
F
F
You
would
do
that
every
two
years,
consistent
with
the
biennium,
so
that
we're
not
every
five
years
getting
whipsawed
and
which
again,
as
you've
just
heard,
has
a
pretty
good
impact
on
those
those
valuations
or
the
amount
we're
asked
to
pay
in
terms
of
employer
contributions.
Mr
chairman
I'll
ask
if
there's
any
questions
otherwise
I'll
go
on
to
the
the
other
one
saying:
none:
okay
and
the
and
the
last
one
is
br
40..
F
Now
this
is
something
that
the
ppob
probably
would
not
take
a
position
on,
but
it
is
a
bill
that
has
cures
an
issue
several
years
ago,
as
you
for
those
of
you
that
have
been
here
a
while
know.
We
put
in
some
spiking
measures
prevent
spiking
and
they
had
several
exceptions
that
that,
where
you
wouldn't
have
that
penalty,
that's
discussed
in
krs,
6,
61,
5
98,
for
example,
which
is
in
one
of
the
plans.
Each
of
the
plans
has
a
spiking
provision.
F
The
one
of
the
exceptions
is
state
of
emergency.
If
the
head
of
the
local
government
declares
an
emergency
and
say
your
police
have
to
work
a
lot
of
mandatory
overtime,
which
they
have
no
choice
over,
whether
they
have
to
work
it
or
not,
that
it
would
take
that
into
consideration.
F
Well
the
what
happened
in
metro
louisville
last
year
after
the
after
the
unrest
related
to
george
floyd
and
the
tragic
killing
of
brianna
taylor,
lmpd
was
working
massive
amounts
of
overtime
and
because
the
mayor
did
a
state
of
emergency,
but
the
governor
did
not
do
a
state
of
emergency.
F
It
did
not
trigger
this
spiking
exception,
but
if
you
recall
the
governor
actually
sent
in
the
national
guard,
so
obviously
it
was
a
big
deal,
and
so
this
changes
the
law
to
say
that
if
a
local
ceo
of
a
governor
government
declares
a
state
of
emergency
and
the
governor
either
has
a
declares
it
a
state
emergency
or
sends
in
the
national
guard.
Then
this
spiking
provision
would
not
hurt
these
people
that
are
have
no
choice
in
whether
they're
going
to
work
this
overtime,
so
it.
F
A
Thank
you,
representative
miller.
I
do
think
it
has
a
lot
of
merit
in
representative
tipton
thank.
B
You,
mr
senator
miller,
would
this
be
retroactive
to
the
events
of
last
summer.
F
And
it
would
be
retroactive
to
may
30th,
which
is
when
the
governor
sent
in
the
national
guard.
It
followed
thank
you
for
bringing
that
up
representative,
and
it
would
make
it
retroactive
to
that,
because
there's
a
lot
of
people
have
been
retired,
that
have
retired
in
the
last
14
months
that
got
hurt
in
their
retirement
because
of
this
provision.
So
thank
you
so.
F
A
A
All
right
sure,
representative,
graham
use
your
mic,
please
for
those
who
retired.
This
would
would
correct
that.
Yes,.
E
H
A
D
Yes-
and
I
also
support
it,
but
just
to
for
further
clarification,
so
if
the
governor
calls
or
yeah
if
there's
an
emergency
exists
and
it
causes
overtime
for
any
employees
and
there's
a
spiking
provision,
an
anti-spike
provision
that
would
kick
into
effect,
but
this
would
prevent
it
because
of
this
an
exception
that
still
all
exists
for
all
the
other
employees.
This
is
a
particular
one
that
could
arise
if
the
mayor
calls
one.