June 2016 - Texas Pension Review Board

June 2016 - Texas Pension Review Board

Texas Pension Review Board
House Pensions Committee
June 13, 2016
Systems Overview
Governance
Houston Firefighters’ Relief
& Retirement Fund (HFRRF)
• Article 6243e.2(1), Vernon’s Texas Civil Statutes
Houston Municipal
Employees Pension System
(HMEPS)
• Article 6243h, Vernon’s Texas Civil Statutes
Houston Police Officers’
Pension System (HPOPS)
• Article 6243g-4, Vernon’s Texas Civil Statutes
• No Meet & Confer
• Meet & Confer
• Meet & Confer
2
Systems Overview
Key Plan Provisions
HFRRF
HMEPS
HPOPS
Benefit Types
Service retirement,
disability, and death
benefits
Service retirement, disability,
and death benefits
Service retirement, disability,
and death benefits
Benefit Tiers
No
Yes, includes a contributory
group (Group A) and two
noncontributory groups
(Groups B and D)
Yes, includes two
contributory groups
DROP Available
Yes (all members)
Yes (members hired prior to
1/1/2008)
Yes (members hired prior to
10/09/2004)
COLA
Yes, automatic COLA for
all members
Yes, automatic COLA for
Groups A & B
Yes, automatic COLA for all
members
Social Security
Participation
No
Yes
No
3
Systems Overview
Current Actuarial Snapshots
Amortization Discount
Period
Rate
Membership
Contribution
Date of
Plan Name Valuation
AVA
AAL
UAAL
Funded
Ratio
HFRRF
7/1/2013
$3.4 B
$3.9 B
$0.5 B
86.56%
30 years
8.50%
3,788
2,790
9.00%
23.90%
HMEPS*
7/1/2015
$2.5 B
$4.7 B
$2.2B
54.19%
32 years
8.00%
11,827
10,023
2.76%
27.36%
HPOPS**
7/1/2015
$4.5 B
$5.7 B
$1.2B
79.75%
23 years
8.00%
5,261
3,698
9.41%
30.28%
Active
Annuitant Member Employer
* Group A contributes 5%; Group B and D are non-contributory.
** Members hired before 10/9/2004 pay 9.00%. Employees hired on or after 10/9/2004 pay 10.25%.
Key:
AVA - Actuarial Value of Assets
AAL - Actuarial Accrued Liability
UAAL - Unfunded Actuarial Accrued Liability
4
Funding Trends
HFRRF
Funding Trends
Funded Ratio, Assets, Liabilities and Year over Year Growth
Valuation Date
7/1/2008
7/1/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
Funded Ratio
95.60%
95.40%
93.39%
90.56%
86.95%
86.56%
30
30
30
30
30
30
UAAL (in millions)
$135.40
$147.50
$220.63
$335.92
$489.64
$532.65
AVA (in millions)
$2,945.09
$3,062.17
$3,116.85
$3,222.29
$3,263.27
$3,430.44
AVA Growth (YoY)
11.83%
3.98%
1.79%
3.38%
1.27%
5.12%
AAL (in millions)
$3,080.49
$3,209.67
$3,337.47
$3,558.21
$3,752.91
$3,963.08
AAL Growth (YoY)
6.51%
4.19%
3.98%
6.61%
5.47%
5.60%
Amortization Period (years)
5
Funding Trends
HMEPS
Funding Trends
Funded Ratio, Assets, Liabilities and Year over Year Growth
Valuation Date
7/1/2010
7/1/2011
7/1/2012
7/1/2013
7/1/2014
7/1/2015
Funded Ra ti o
62.58%
61.44%
59.09%
57.70%
58.07%
54.19%
29
30
30
35
33
32
UAAL (i n mi l l i ons )
$1,359.33
$1,461.52
$1,622.74
$1,747.00
$1,798.06
$2,183.21
AVA (i n mi l l i ons )
$2,273.14
$2,328.80
$2,344.13
$2,382.59
$2,490.52
$2,582.51
AVA Growth (YoY)
-0.49%
2.45%
0.66%
1.64%
4.53%
3.69%
AAL (i n mi l l i ons )
$3,632.47
$3,790.33
$3,966.86
$4,129.58
$4,288.58
$4,765.72
AAL Growth (YoY)
5.25%
4.35%
4.66%
4.10%
3.85%
11.13%
Amorti za ti on Peri od (yea rs )
6
Funding Trends
HPOPS
7
Asset-Liabilities Trends
8
Contribution Trends
*HFRRF did not provide an actuarially recommended contribution for 2005 or 2016.
9
Contribution Trends
*No actuarially recommended contribution was provided for 2005.
10
Contribution Trends
11
Contribution Trends
12
Funded Ratio Trends
* HFRRF did not perform an actuarial valuation for 2003, 2014 or 2015.
13
Funded Ratio Trends
* HFRRF did not perform an actuarial valuation for 2003, 2014 or 2015.
14
Demographic Trends
15
Cash Flow Trends
16
Cash Flow Trends
17
Investment Returns
18
Investment Returns
*HFRRF did not provide a 30-year net return calculation because their net returns are only available since 1999.
19
Asset Allocations
20
Asset Allocations
21
GASB Pronouncements
2015 GASB 67 Reported Information
System
HPOPS
HFRRF
HMEPS
Total Pension Liability (TPL)
$6,992,784,000
$4,455,341,000
$4,531,179,075
Fiduciary Net Position
$4,304,523,000
$3,877,651,000
$2,456,543,559
Net Pension Liability (NPL)
$2,688,261,000
$577,690,000
$2,074,635,516
Funded Ratio
61.56%
87.03%
54.21%
Long-Term Expected
Rate of Return
8.00%
8.50%
8.50%
TPL Discount Rate (Blended)
7.08%
8.50%
8.50%
NPL at Discount Rate – 1%
$3,576,952,000
$989,465,000
$2,554,070,253
NPL at Discount Rate + 1%
$1,971,192,000
$235,835,000
$1,667,683,770
Municipal Bond Rate
3.80%
N/A
N/A
Money-Weighted
Rate of Return
0.80%
1.28%
3.50%
DROP Balance
$921,438,000
$1,096,051,646
$452,200,000
22