Financial condition of plan

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Is MOSERS currently under-funded? Are the current obligations greater than the resources available? Does this threaten the payment of future benefits?
The most important message for MOSERS members is that promised benefits are secure. According to the June 30, 2009, report from the System’s actuary, MOSERS has a funding ratio of 83%, based on the actuarial value of assets. The board, as required by law, certified the actuarially determined contribution rate that is necessary to cover the current liabilities of the plan administered by the system and move the system toward 100% funding over a period of future years.
The September 17th meeting of the MOSERS Board of Trustees received a certain amount of media coverage. We think that was due to the board’s scheduled vote regarding the state’s contribution rate that the general assembly will be requested to fund in the FY11 budget, which begins July 1, 2010. Each September the board certifies the state’s contribution rate that will become effective the following July. The rate certified this year was 13.81% of payroll for the fiscal year that starts July 1, 2010. That is up 1.06% from our current rate of 12.75%, and translates to an increase of approximately $20 million. While it is normal for the contribution rate to fluctuate from year to year, this was a larger change than would normally be expected but then the financial markets over the last year have not behaved as would normally be expected either.
Perhaps the most important takeaway from the most recent report of the system’s actuary is the conclusion which reads as follows:
Based on the results of the June 30, 2009 regular annual actuarial valuation, it is our opinion that the Missouri State Employees Retirement System continues to be in sound financial condition in accordance with actuarial principles of level percent-of-payroll financing.Given the recent tumultuous economic conditions and concerns about the effect on the state budget, we expect that there will continue to be news reports, as well as rumors and concerns circulating about the effect of these issues on the retirement system. We encourage you to visit the MOSERS website frequently to stay informed of issues and decisions that impact your retirement system.
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